Navigating the Controversy: Passport Applications, SSN's, and the Tax Reform Act of 1986

Aug 19 / Dynamo Jakk
In 1986, the Tax Reform Act brought about a controversial provision that required passport applicants to divulge their Social Security Numbers (SSNs) and foreign residency details to the IRS. This requirement aimed to identify potential tax evaders living abroad. Amidst privacy concerns, attorney Stephen Kruger stepped forward in 1992 with a compelling constitutional challenge to this provision. Today, three decades later, Kruger's arguments continue to hold relevance as we grapple with the delicate balance between privacy, liberty, and tax enforcement in our increasingly digital world.

Kruger's contention centered on the assertion that the passport disclosure mandate infringed upon the Bill of Attainder Clause, singling out passport applicants for tax-related punitive actions based on past behavior. He further argued that it forced self-incrimination by compelling applicants to provide information that could be used against them in tax-related prosecutions. Additionally, he invoked the right to international travel, claiming that mandatory SSN disclosure imposed an unrelated condition for obtaining passports. 

Kruger's objections against the requirement's constitutionality encompassed multiple grounds:

  1. Violation of the Bill of Attainder Clause, which targets passport applicants for tax enforcement.

  2. Compulsion of self-incriminating information related to tax filing status.

  3. Impingement on the constitutional right to travel abroad.

  4. Absence of rational connection between passport issuance and tax obligations.

  5. Exceeding federal authority by legislating on a problem that lacks substantial existence.

Despite the lasting relevance of Kruger's arguments, modern courts would probably uphold the disclosure law, citing established precedent. This was evident in Nixon v. Administrator of General Services (1977), where it was determined that a law is considered unconstitutional as a bill of attainder only if it imposes punishment without a judicial trial. The court's decision indicated that the mandatory SSN disclosure requirement doesn't inherently qualify as punishment; rather, it functions to aid legitimate tax enforcement.

For a violation of Section 7 of the Privacy Act of 1974 to occur, an agency must not only request an individual's disclosure of their social security number but also deprive the individual of a "right, benefit, or privilege" due to their refusal to provide the SSN. For example, in El-Bey v. N.C. Bd. of Nursing, No. 1:09CV753, 2009 WL 5220166, at *2 (M.D.N.C. Dec. 31, 2009), this requirement was evident. 

This underscores the nuanced considerations surrounding the mandatory disclosure of SSNs and the interplay of legal standards in cases such as these. 

Kruger's appeal to the constitutional right to international travel demands serious consideration. Imposing restrictions on or deterring foreign travel significantly infringes upon individual liberty. In Kent v. Dulles (1958), the Court ruled that passports couldn't be denied based on political beliefs or affiliations. Nevertheless, under current law, if SSN disclosure is rationally linked to a valid public purpose like tax enforcement, it's likely to be upheld. 

Evolution of the Social Security Number (SSN)

The Historical Transformation

The Social Security Number (SSN), originally introduced to track contributions to the Social Security system, has evolved over time to encompass a broader role. It was initially rooted as an identifier within government records. The concept of a numerical identification system for Federal employees was initially conceptualized by the Civil Service Commission, with the SSN serving as the identifying marker. This concept was subsequently endorsed by Executive Order 9393, issued by President Franklin Roosevelt, leading to the expanded functionality of the SSN. 

When you sign up for a benefit such as Social Security, you are signing a contract because all franchises are contracts between the grantor and the grantee. All those assigned Social Security Numbers are federal “employees”. For the proof, I refer you to the Privacy Act, 5 U.S.C. §552a. This is also confirmed by the regulation which authorizes issuance of the number at 20 C.F.R. §422.104. That section falls under Title 20 of the Code of Federal Regulations, which is entitled “Employee’s Benefits”. The “employee” they are talking about is that defined in 26 CFR §31.3401(c)-1. 

Having a Social Security Number also creates a “presumption” that you are domiciled in the “United States”, which is defined in the I.R.C. as the “District of Columbia” in 26 U.S.C. §7701(a)(9) and (a)(10). Therefore, if someone asks you for a Social Security Number on any form or application, indirectly they are asking you two questions. If you give them a number you are answering YES to both of these questions. 1) Are you a federal “employee” on official business? And 2) Is your domicile in the District of Columbia? 

The federal government has no jurisdiction within a state to control behavior of private employees, and therefore the only type of “employee” they can be referring to in the context of Social Security Numbers is public employees who work for the federal government.

IRS also has a code word or “word of art” that they use to describe this employment relationship. It is called a “trade or business”, which is defined in 26 U.S.C. §7701(a)(26) as “the functions of a public office”. A “trade or business” is the main thing that is taxable under subtitle A of the Internal Revenue Code. To supply an SSN is to admit that you are a federal “employee” who is engaged in a taxable activity. Any bank account which has the number attached also effectively becomes property of the federal government, because the number, which is government property, can only be used in the execution of the official duties of a federal “employee” in the furtherance of a “public purpose”. To use public property for any other purpose is illegal under 18 U.S.C. §208.

In the realm of U.S. Government, there exists a crucial distinction when it comes to withholding and domicile. It's essential to be aware that only individuals serving in elected or appointed positions within the government are subject to withholding. This distinction is clearly outlined in two specific sections of the United States Code: [5 U.S.C. §552a(a)(2)] and [26 U.S.C. §7701(a)(26)].

Public officers, who hold official positions, play a significant role in this context. They possess a domicile within the STATUTORY "State," which is a term with specific legal implications. However, it's crucial to note that this domicile within the STATUTORY "State" is applicable only during their official duties, as specified in 4 U.S.C. §72. Once off duty, their domicile shifts outside the boundaries of the STATUTORY "State."

Unveiling the Concealed Nature of Government Laws

Unraveling the Corporate Veil

All laws created by government corporations are private corporate regulations called public law, statutes, codes, and ordinances to conceal their true nature. Yes, judges and lawyers know this... but will hide it in their argument if silence promotes their cause of action.

Since these government bodies are not SOVEREIGN, they cannot promulgate or enforce CRIMINAL LAWS; they can only create and enforce CIVIL LAWS, which are duty bound to comply with the LAW of CONTRACTS. The Law of Contracts requires signed written agreements and complete transparency! Did you ever agree to be arrested and tried under any of their corporate statutes? For that matter, did you ever agree to contract with them by agreeing to be sued for violating their corporate regulations?

Enforcement of these corporate statutes by local, state, and federal law enforcement officers are unlawful actions being committed against the SOVEREIGN people and these officers can be held personally liable for their actions. [Bond v. U.S., 529 U.S. 334 - 2000]


Whereas defined pursuant to Supreme Court Annotated Statute: Clearfield Trust Co. v. United States 318 U.S. 363-371 1942:

"Governments descend to the level of a mere private corporation, and take on the characteristics of a mere private citizen . . . where private corporate commercial paper [Federal Reserve Notes] and securities [checks] is concerned . . . For purposes of suit, such corporations and individuals are regarded as entities entirely separate from government."

What the Clearfield Doctrine is saying is that when private commercial paper is used by corporate government, then government loses its sovereignty status and becomes no different than a mere private corporation.

As such, government then becomes bound by the rules and laws that govern private corporations which means that if they intend to compel an individual to some specific performance based upon its corporate statutes or corporation rules, then the government, like any private corporation, must be the holder-in-due-course of a contract or other commercial agreement between it and the one upon who demands for specific performance are made.

And further, the government must be willing to enter the contract or commercial agreement into evidence before trying to get the court to enforce its demands, called statutes.

This case is very important because it is a 1942 case that was decided after the UNITED STATES CORPORATION COMPANY filed its "CERTIFICATE OF INCORPORATION" in the State of Florida (July 15, 1925). And it was decided AFTER the 'corporate government' agreed to use the currency of the private corporation, the FEDERAL RESERVE. The private currency, the Federal Reserve Note, is still in use today.

Understanding the intricate connection between allegiance and the issuance of passports

The right of citizens to journey abroad has persisted since ancient Roman times. In the Magna Carta's Chapter II, a provision was established granting all free individuals the right to depart the realm during peaceful periods. This measure effectively curtailed the king's ability to confine his adversaries within the nation's borders.

In the United States, the exclusive power to issue passports was vested in the Secretary of State through the Act of Congress on August 18, 1856. This marked the inaugural legislative measure concerning passports in the nation's history.

Prior to the instances of Kent v. Dulles and Dayton v. Dulles, the State Department derived the authority for regulating passport issuance from a 1952 Act of Congress, which was invoked by a Presidential proclamation on January 17, 1953. This proclamation empowered the Secretary of State to establish regulations that prohibited passport issuance to Communist Party members and mandated that passport applicants respond under oath to inquiries concerning their current or prior affiliation with the Communist Party.

Writing for the 5-4 majority, Justice Douglas avoided ruling on whether legislation denying passports would be constitutional. Rather, he found that existing law did not authorize the government to deny passports on political grounds. Still, Kent was a landmark case as the first to recognize a legal right to international travel. This freedom had become increasingly meaningful for everyday Americans in the post-war era. While not deciding the scope of congressional power over passports, Kent affirmed that the right to travel abroad is an important civil liberty.

In this particular case, the Court ruled that the right to travel internationally is protected by the Fifth Amendment's due process clause. The Justices found that existing presidential orders did not authorize the Secretary of State to deny passports solely based on Communist Party membership or association. As a result, the government could not force the petitioner to submit a non-communist affidavit as a condition for getting a passport. The Court limited permissible reasons for passport denial to longstanding grounds like criminal activity or lack of allegiance to the United States. Mere association with communists or their beliefs was insufficient to infringe the constitutionally-safeguarded right to travel abroad.

The dissenting Justices disagreed, arguing that the Immigration and Nationality Act of 1952 empowered the Secretary to withhold passports from security threats. In their view, when passing the law, Congress expected the executive branch would use its longstanding discretion to deny passports when U.S. interests were jeopardized. Since the statute only applied during war or emergencies, the minority contended that the Secretary's discretion must be evaluated in light of wartime needs. The dissenters believed communist associations posed enough danger to warrant passport denial, even without explicit congressional authorization.

Since passports had been denied in the past for security concerns even before the 1952 Act made them obligatory during war and emergencies, the dissent maintained this implied Congress wanted the Secretary to keep using discretionary denial for those reasons.

These landmark cases establish international travel as a "liberty" safeguarded by the Fifth Amendment, which states no one shall be deprived of liberty without "due process of law." However, the precise boundaries of permissible restrictions remain unclear. The Fifth Amendment's Due Process Clause provides no specifics on what process is "due." It simply requires that any limitation of the right to travel abroad must follow lawful procedures consistent with due process principles.

In recent decades, courts have grown more skeptical of the State Department's broad claim of discretionary authority to restrict passports. This unchecked power originated when passports were optional for foreign travel, unlike today. As early as 1897, the Supreme Court's expansive definition of liberty in Allgeyer v. Louisiana included the right to cross international borders. While cases like Crandall v. Nevada, Edwards v. California, and Williams v. Fears focused on interstate travel, their principles upholding fundamental rights logically extend to international travel. However, federal courts have affirmed the Secretary's discretion to deny passports where citizenship status is uncertain. Despite increasing judicial scrutiny, the State Department continues justifying passport restrictions based on decades-old reasoning about executive power. But legal precedent suggests greater constraints on that authority are necessary to protect modern travel rights.

Grasping the complex link between allegiance and passport issuance is crucial. The statute 22 U.S.C. §212 stresses that passports can only be granted to those owing allegiance to the United States, regardless of formal citizenship. This law emphasizes allegiance as a key passport requirement separate from citizenship status. Notably absent is any mandate to furnish a social security number. Further highlighting allegiance's central role. Additionally,

The distinction between statutory "U.S. citizens" and "nationals" under federal law holds relevance to the concept of allegiance. As delineated in statutes such as 8 U.S.C. §1452, 8 U.S.C. §1101(a)(21), or 8 U.S.C. §1101(a)(22)(B), individuals born within the United States can possess allegiance without necessarily holding the status of statutory "U.S. citizens." They are categorized as "nationals" under federal law. This underscores that allegiance transcends statutory citizenship, extending to broader national status.

Precedent also supports the connection between passports, identity, and allegiance. In Haig v. Agee (453 U.S. 280, 1981), the Supreme Court underscored passports as travel control documents that affirm identity and allegiance to the United States. A passport serves as evidence of both identity and commitment to the nation, reinforcing the role of allegiance in passport issuance.

Ultimately, courts face a balancing act between national security and the freedom to travel abroad. One potential standard, suggested in Shachtman v. Dulles, is whether the passport denial has a reasonable connection to foreign affairs. For now, Kent relied on due process to avoid this weighing.

Some language in Shachtman seemed to acknowledge a inherent right to travel. But courts won't fully recognize this freedom without grounding it in specific constitutional provisions. Legal historians debate whether such a right existed under common law.

The cases so far indicate that unrestrained travel is intrinsically protected by the Fifth Amendment's liberty clause, which guards against denial without due process.

In sum, a constitutional right to travel internationally clearly exists and courts are willing to uphold it. Yet in this era of heightened global tensions, some worry unfettered travel could harm national security and foreign policy goals, outweighing personal freedom.

As with other conflicts between individual and societal interests, a balancing test is needed. For many citizens, travel abroad is a valued right - economically, educationally, socially. Typically, these personal rights also serve the collective good.

In the Cold War context, maintaining an open passport policy demonstrates democratic principles of liberty. This could even bolster security more than restrictive policies of questionable efficacy. While national security is paramount, curtailing travel freedom requires proof that restrictions directly advance security.

Navigating Passports and Privacy in the Digital Era

With the dawn of the digital age, safeguarding privacy and travel freedoms necessitates revisiting these concerns. Passports serve as both travel documents and identification tools, with a database of SSNs, addresses, and travels potentially enabling extensive surveillance. Furthermore, passports are now essential for nearly all foreign air travel, amplifying Kruger's apprehensions about a "national identity card."

While the constitutionality might hold, it remains crucial to establish robust safeguards to thwart the potential misuse of gathered SSNs. The storage of sensitive personal information within government databases raises concerns about the improper exposure of data. Reassessing the rationale behind mandatory SSN disclosure is imperative, particularly in light of present-day circumstances. Passports must steer clear of transforming into instruments for broad-scale tracking or aiding unrelated surveillance.

Underlining this context, 22 U.S.C. §212 underscores that passports are exclusively issued to individuals who possess allegiance to the United States, irrespective of their citizenship status. This statute underscores the primary criterion of allegiance in the passport issuance process.

Kruger concludes by asserting that fundamental values such as privacy and individual freedom are the cornerstones of American democracy. Sacrificing these values for tax enforcement or security undermines our ideals. Thirty years later, his caution against uncritical expansion of disclosure requirements remains relevant. Continually striking the right balance between individual rights and governmental authority becomes imperative as technology grants unprecedented scrutiny. Kruger's article offers valuable insights into harmonizing privacy, travel liberty, and legitimate tax collection in an evolving digital era.
“True freedom is not merely the absence of chains; it's the unyielding spirit that soars beyond constraints, dances amidst uncertainty, and dares to explore the boundless horizons of possibility.”
- dynamo jakk

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