The Economic Impact Payments of the CARES Act (Stimulus Payments) went to a lot of people. Even I got one. It was not everybody though. There was an income phaseout, of course, but that’s not all. Among the people excluded were those who did not have a valid social security number (SSN). One reason you might not have a social security number is that you are undocumented. If you nonetheless are here and make money you still have a tax filing obligation. IRS issues an Individual Taxpayer Identification Number (ITIN) to people in that situation.
SSN And ITIN – One Of These Things Is Not Like The Other
The CARES Act did not treat an ITIN as being equivalent to a SSN. In the case of a joint return, one spouse having an SSN did not cut it, although that was later changed. Initially there had to be one for both of them. The initial EIP was $1,200 per adult plus $500 per child. The effect of all this is that children who are American citizens were cut out of the stimulus if one or both of their parents were undocumented.
The Institute for Constitutional Advocacy and Protection at Georgetown Law filed a class action lawsuit on behalf of a number of the children, who are designated by initials. The lead plaintiff is R.V. The argument is that the SSN rule in CARES discriminates against American citizen children because of their parents undocumented status, treating them as second class citizens. The complaint notes that the CARES Act is an outlier in denying benefits to citizen children because of their parent’s status. The complaint argues that there is a violation of the Fifth Amendment’s due process clause.
Opinion
Judge Paul W. Grimm of the United States District Court of Maryland, an Obama appointee, issued an opinion in R.V. et al v. Steven L. Mnuchin et al. Since the parties largely agree on the material facts – The parents do not have social security numbers and the kids do. And at least one of the parents, N.R., would be qualified for a CARES Act Credit including the $500 for her qualifying child if she were a permanent resident with work authorization or a US citizen. – it comes down to three legal issues.
Do the children have standing to challenge the constitutionality of IRS Code Section 6248 ? What level of constitutional scrutiny applies to the challenged CARES Act provision ? Using the appropriate standard does the SSN requirement past constitutional muster ?
Judge Grimm ruled that the children do have standing. The standard of review is “rational basis” rater than “strict scrutiny”. And that the restrictions in the CARES Act do have a rational basis. In other words, the children had the right to bring the case, but they still lose.
Standing
Standing was an issue, because the credit goes to parents and is tied to their tax returns. Generally speaking you don’t have the right to sue about other people’s taxes. The Government argued that the children missed out on one of the elements of standing – having suffered an injury in fact. Dependent children, regardless of the status of their parents, were not, themselves, getting credits. So R.V. was no worse off than any other kid.
Judge Grimm did not buy that. He ruled that the unequal treatment of children of undocumented immigrants due their parents’ alienage is injurious unto itself. The Government does not challenge that the treatment is traceable to government action and could be redressed. That’s enough for standing.
Unfortunately for the children, standing, while important is just table stakes. It is not a winning hand.
Extreme Deference
Judge Grimm quotes a 1976 Supreme Court decision – Matthews V. Diaz – , which concerned which noncitizens could enroll in Medicare,
For reasons long recognized as valid, the responsibility for regulating the relationship between the United States and our alien visitors has been committed to the political branches of the Federal Government. Since decisions in these matters may implicate our relations with foreign powers, and since a wide variety of classifications must be defined in the light of changing political and economic circumstances, such decisions are frequently of a character more appropriate to either the Legislature or the Executive than to the Judiciary
He notes that it is clear that Congress has no constitutional duty to provide all non-citizens with the same benefits it provides to citizens. The Matthews precedent holds that it is “unquestionably reasonable” to make a non-citizen’s eligibility depend on the character of his or her residence in the United States. Congress chose having a SSN and that is the type of congressional judgement that courts have been “especially reluctant to question”.
Judge Grimm’s bottom line is that provision is subject to rational basis review and that the statute satisfies that highly deferential standard.
What Is Next ?
The Institute has not updated its website on the case to reflect the opinion. I heard from Leslie Book of Procedurally Taxing who is among the attorneys representing the children. He had non comment other than to indicate that they are assessing next steps at this point.
Originally published on Forbes.com.
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