Multiple federal tax cases continue to make their way to the U.S. Supreme Court, and it has certainly been interesting to monitor changes and updates to the Court’s docket. I previously wrote a blog on the oral arguments held on January 12, 2022, in Boechler, P.C. v. Comm’r[1] that addressed whether the time limit in Section 6330(d)(1) is a jurisdictional requirement for Tax Court petitions. See CDP Proceedings—Is the Time Limit in Section 6330(d)(1) a Jurisdictional Requirement for Tax Court Petitions?. Even Freeman Law is awaiting the Court’s decision on its Petition for Writ of Certiorari in Rivero v. Fidelity Invs., Inc.[2] Last week, however, the Supreme Court denied certiorari for three tax cases described in more detail below.

Supreme Court Tax Case Denials

On February 22, 2022, the U.S. Supreme Court granted two petitions for a writ of certiorari. At that same time, it denied a multitude of other petitions, including three pertinent tax cases: (1) Maehr v. United States Dep’t of State; (2) Montero v. United States; and (3) Harris v. Comm’r of Internal Revenue.

1. Maehr v. United States Dep’t of State[3]

Jeffrey T. Maehr, represented by Polsinelli PC in Denver, Colorado, filed a lawsuit against the U.S. Department of State in the U.S. District Court for the District of Colorado. Mr. Maehr claimed, in part, that the Department of State violated his right to due process by revoking his passport before the issue of whether he had a seriously delinquent tax debt had been resolved.

The United States, represented by E. Carmen Ramirez, filed a motion to dismiss. The district court granted the motion to dismiss, finding that Section 7345 of the Code was constitutional as applied to Mr. Maehr.

Mr. Maehr appealed the district court’s decision to the Tenth Circuit Court of Appeals. The Tenth Circuit affirmed the district court’s decision, holding:

• • On issue of first impression, waiver of sovereign immunity could be applied to claim that Department of State acted unconstitutionally by revoking citizen’s passport;
  • Article IV Privileges and Immunities Clause and Privileges or Immunities Clause of the Fourteenth Amendment did not apply to federal government and did not protect any right to international travel; and
  • Restricting international travel of taxpayer who was seriously delinquent in paying his taxes by revoking his passport was rationally based on legitimate government interest.

Mr. Maehr appealed the Tenth Circuit’s decision, but the Supreme Court denied Mr. Maehr’s petition for writ of certiorari.

For access to Mr. Maehr’s petition for writ of certiorari, click here.

2. Montero v. United States[4]

Adolfo S. Montero, a resident of Pflugerville, Texas, proceeding pro se, filed a lawsuit against the Internal Revenue Service in the U.S. District Court for the Western District of Texas. Mr. Montero sought various forms of relief, including refunds of federal taxes withheld and damages against the IRS.

The United States, represented by Curtis Smith, filed a motion to dismiss. The district court granted the motion to dismiss, finding that Mr. Montero (1) failed to exhaust all administrative remedies available to him, and (2) failed to pay his taxes before filing suit. Mr. Montero subsequently filed a motion for reconsideration, which the district court denied.

Mr. Montero appealed the district court’s decision to the Fifth Circuit Court of Appeals. The Fifth Circuit—not amused by Mr. Montero’s argument that he was not a “taxpayer” and, therefore, the prerequisites for filing a refund suit did not apply to him—affirmed the district court’s decision. Mr. Montero appealed the Fifth Circuit’s decision, but the Supreme Court denied Mr. Montero’s petition for writ of certiorari.

For access to Mr. Montero’s petition for writ of certiorari, click here.

3. Harris v. Comm’r of Internal Revenue[5]

Joshua Harris, a resident of South Ozone Park, New York, proceeding pro se, challenged a notice of deficiency issued by the IRS in U.S. Tax Court. The IRS conceded certain deductions to which Mr. Harris was entitled to, but Mr. Harris failed to appear for trial. The Tax Court dismissed the case and entered judgment in favor of the IRS in the amount on the notice.

Mr. Harris appealed the Tax Court’s decision to the Second Circuit Court of Appeals. The Second Circuit affirmed the Tax Court’s decision, except that the Tax Court should redetermine Mr. Harris’ deficiencies and penalties in light of the IRS’s pretrial concessions. On remand, the Tax Court redetermined Mr. Harris’ deficiencies and penalties, and Mr. Harris appealed again.

The Second Circuit found Mr. Harris’ second appeal to be without merit, holding, in part, that the Tax Court did not err in its factual findings or legal conclusions. Mr. Harris, attempting to raise new arguments for the first time on appeal, was denied. Mr. Harris appealed the Second Circuit’s decision, but the Supreme Court denied Mr. Harris’ petition for writ of certiorari.

For access to Mr. Harris’ petition for writ of certiorari, click here.

Conclusion

Perhaps the most interesting case of those describe above is Maehr v. United States Dep’t of State. The legal developments related to Section 7345 are particularly notable, as the law allows the State Department to deny or revoke a taxpayer’s passport once the IRS certifies that the taxpayer has a “seriously delinquent tax debt.” This case is also notable since the Tenth Circuit was the first appellate court to address the constitutionality of Section 7345. Maehr will certainly not be the last time a constitutional challenge to Section 7345 reaches the Supreme Court. Further, notwithstanding the recent string of denials of tax cases, the Court still has other tax cases that it might consider, and we hope Rivero is one of them.

[1] Boechler, P.C. v. Comm’r, 967 F.3d 760 (8th Cir. 2020), cert. granted, 142 S. Ct. 55 (2021).

[2] Rivero v. Fidelity Invs., Inc., 1 F.4th 340 (5th Cir. 2021), petition for cert. pending.

[3] Maehr v. United States Dep’t of State, 5 F.4th 1100 (10th Cir. 2021), cert. denied sub nom. Maehr v. Dep’t of State, No. 21-912, 2022 WL 515963 (U.S. Feb. 22, 2022).

[4] Montero v. United States, No. 21-50237, 2021 WL 4314057 (5th Cir. 2021), cert. denied, No. 21-925, 2022 WL 516004 (U.S. Feb. 22, 2022).

[5] Harris v. Comm’r of Internal Revenue, 837 F. App’x 839 (2d Cir. 2021), cert. denied sub nom. Harris v. CIR, No. 21-1035, 2022 WL 516027 (U.S. Feb. 22, 2022)

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