Donald Dewees v. United States

The Convention between Canada and the United States of America with Respect to Taxes on Income and Capital (“the Convention”) allows no meaningful review prior to the assessment and collection of a non-resident U.S. citizen’s tax liability. The Petitioner Donald Dewees, a Canadian resident, was forced to pay his contested U.S. tax debt due to Canadian withholding and collection activity pursuant to Article 26A of the Convention. Also, while the D.C. Circuit Court below acknowledged that Dewees has standing to claim an equal protection violation, it upheld the IRS’ refusal to allow him enter its Streamlined Filing Compliance Procedures (SFCP). Lack of access to the SFCP arbitrarily cost Dewees $120,000 in assessed maximum tax penalties for late filings of Form 5471, even where the IRS admitted Dewees’ owed no tax. Therefore, the Questions Presented are:

1. Did the lack of a meaningful review of the assessment and collection of a tax under the Convention violate Dewees’ right to due process?

2. Did the IRS’ arbitrary refusal to allow Dewees’ to enter the SFCP violate his equal protection rights, where other non-resident taxpayers allowed into the program avoid late-filing penalties?

3. Were the civil fines assessed and collected against Dewees for late filings of Form 5471 excessive under the Eighth Amendment, especially where the IRS acknowledged Dewees owed no tax?