Notwithstanding any other provision of law, not later than 30 days after the close of each calendar quarter, the Secretary shall publish in the Federal Register the name of each individual losing United States citizenship (within the meaning of section 877 (a) or 877A) with respect to whom the Secretary receives information under the preceding sentence during such quarter.
Notices to be printed in the Federal Register for 30 July 2014 have just been placed on public inspection, but the Quarterly Publication of Individuals Who Have Chosen to Expatriate is not among them. This means that for the eighth quarter in a row, the list of certain expatriates will not be published in a timely fashion as required by 26 USC § 6039G(d).
Defenders of the poor beleaguered Secretary of the Treasury will claim that he already approved the list for publication, and it’s someone else’s fault that it failed to actually get published on time, and that he hasn’t broken the law. But applicable case law shows quite clearly that when a statute requires publication of a notice, mere agency approval or placement on public inspection is not enough to meet the requirement of the law.
And since the IRS is so concerned that about international reporting requirements these days, shouldn’t they be enforcing 6039G(d) just as strictly as they enforce its neighbour, 6038D?
Promulgation, filing, publication, and time limits
The Secretary of the Treasury has never been taken to court over late expat honour rolls — I haven’t been so mean and vindictive as to dob him in on a Form 211, otherwise I’m sure the IRS’ fearless Criminal Investigations Division folks would fly right back from London and Hong Kong to DC to have a chat with him. However, more important plaintiffs have sued government officers over other, higher-stakes stuff in the Federal Register, and the government has occasionally responded by arguing that the suits should be thrown out because some 30 or 60-day deadline allegedly started running on the date of filing rather than the date of publication.
There’s limited support for the government’s position in 44 USC § 1507, a fairly old provision of law which has survived intact ever since it was created by the Federal Register Act of 1935, with only minor changes in wording since then:
Unless otherwise specifically provided by statute, filing of a document, required or authorized to be published by section 1505 of this title, except in cases where notice by publication is insufficient in law, is sufficient to give notice of the contents of the document to a person subject to or affected by it.
However, the “unless otherwise specifically provided by statute” part is often fatal to the government’s arguments, because statutes almost always require publication, not mere filing. Rowell v. Andrus, 631 F.2d 699 (1980), turned on this point:
… the Government argues that even if the 30 day deferred effective date provision of § 553 is construed as applying to final rules, the regulation in question here was filed with the Office of the Federal Register on December 30, 1976; that this was over 30 days prior to the February 1, 1977, effective date; and that such date of filing for publication with the Federal Register office commenced the 30 day waiting period. Consequently the Government says that the time period prescribed by § 553(d) was satisfied in any event.
It is true that 44 U.S.C. § 1507 states that the filing of a document with the Office of the Federal Register is sufficient to give notice of its contents. However, we feel that another part of § 1507 is the key to the answer here … [t]he “unless otherwise” language of § 1507 leads us to 5 U.S.C. §§ 552(a)(1) and 553(d) which require publication 30 days before the effective date, as opposed to mere filing with the office. The common meaning of the word should apply, there being no statutory definition. Clearly “publication” in the Federal Register requires more than mere “filing.”
Both of those sections cited in Rowell are part of the Administrative Procedure Act (APA). The first one, 5 USC § 552(a)(1), requires each agency to publish its regulations in the Federal Register, and goes on to require that:
Except to the extent that a person has actual and timely notice of the terms thereof, a person may not in any manner be required to resort to, or be adversely affected by, a matter required to be published in the Federal Register and not so published. For the purpose of this paragraph, matter reasonably available to the class of persons affected thereby is deemed published in the Federal Register when incorporated by reference therein with the approval of the Director of the Federal Register.
The second one, 5 USC § 553(d), states that “[t]he required publication or service of a substantive rule shall be made not less than 30 days before its effective date”. And so the court decided that since the APA uses words like “published”, the regulations could only come into effect 30 days after the date of publication, not 30 days after the date of filing.
In the late 1980s and early 1990s there were at least two more cases involving disputes over date of filing vs. publication: National Grain & Feed Association v. Occupational Health and Safety Administration, 845 F.2d 345 (1988) and Sea Watch International v. Mosbacher, 762 F.Supp. 370 (1991). In both of those, the government argued that the plaintiffs’ petitions against regulations were time-barred (each case involved different statutes: 29 USC § 655(f) and 16 USC § 1855(d), respectively) because the petitions came more than X days after the regulations were filed with the Federal Register, and the government claimed that the date of filing should be regarded as the date of “promulgation”.
And in both cases, the DC courts rejected that argument because the petitions came within X days of the actual publication in the Federal Register. (Regardless, 26 USC § 6039G(d) does not use the word “promulgate” anyway, so even the long-rejected argument that “filing” = “promulgation” could not excuse the government’s lateness.)
Just to make things confusing, different agencies have different rules on when a notice should be regarded as “promulgated”, “released”, or some other such vague term. The FCC, for example, provides in 47 CFR 1.4(b) that two documents actually published on the same day in the Federal Register can be considered to have different dates of “public notice” if one is part of a rule-making proceeding while the other is not. Naturally, there have been lawsuits about this too, such as Adams Telcom v. Federal Communications Commission, 997 F.2d 955 (1993). But, as mentioned above, the “expat honour roll” statute uses the plain old word “publish” and not other unclear synonyms like “promulgate”, so cases like this FCC one aren’t relevant anyway.
And of course, none of the above cases show the slightest concern for the date which the authoring agency itself puts on the notice (for example 23 April for the previous quarter’s list of ex-citizens, which was not published until 2 May) — that date is legally irrelevant, and could not possibly constitute “publication”, since the notice certainly was not available to the public on that date.
Who cares when some stupid notice gets printed?
There’s another difference, of course: the Quarterly Publication of Individuals Who Have Chosen to Expatriate does not consist of regulations. It is a meaningless, error-filled list of names (with the occasional street address, village, job title, or corporation thrown in for good measure). The inclusion or exclusion of a name has absolutely no legal implication, notwithstanding long-dead proposals to use the list to enforce the Reed Amendment. (The IRS could have required, for example, that banks subject to FATCA check the Quarterly Publication if customers previously known to have U.S. citizenship later claim that they’ve given it up — but the IRS did not, presumably because they’re just as aware as the rest of us that the Quarterly Publication is garbage.)
So it’s doubtful that there is even any “person subject to or affected by” the Quarterly Publication for purposes of 44 USC § 1507. In simpler terms, no one can actually demonstrate harm when this law is broken. Even if the actual expatriates included (or not included) could argue that they are “affected”, it’s not clear what relief a court might grant them.
But that doesn’t mean the law should go unenforced, right? No one can actually demonstrate harm when U.S. Persons outside of the U.S. fail to fill out Washington’s endless, incomprehensible paperwork on their local-government-approved bank, retirement, disability, and health savings accounts which the IRS treats as if they were offshore tax avoidance instruments. But Jack Lew and John Koskinen are off on a pointlessly costly, legally-dubious worldwide crusade to enforce 26 USC § 6038D and similar provisions of law which demand all that paperwork. And before that crusade, there were the equally meaningless FBARs that “U.S. Persons in Un-American Countries” are required to file with the Financial Crimes Enforcement Network — which had to arrive in Detroit by the 30 June due date, not be postmarked by that due date, at least until they made us switch to their ridiculous e-filing system.
Ever since all of us here at the Isaac Brock Society started arguing against FATCA, FBAR, Form 8621, and the rest of the citizenship-based taxation mess that the U.S. imposes on its emigrants, government officials and Homeland “tax justice” crusaders and their loyal enablers have been calling us “tax evaders” and “anti-tax zealots” — even when we owe no tax — because we fail to fill out all this meaningless paperwork, or argue that it should be abolished.
So I simply ask that the IRS be held to the same standard as us — required to comply with pointless, incomprehensible procedural minutiae, while facing life-altering fines, ejection from banks, attacks on honour & dignity & privacy, and inability to live a normal life like all of your neighbours. After all, the law is the law, right?