By Craig Clough

Law360 (June 17, 2021, 9:41 PM EDT ) The Internal Revenue Service told a Maryland federal court on Wednesday that the final remaining plaintiff in a proposed class action of married couples who lost out on COVID-19 stimulus checks because of their immigration status is making flawed arguments since her ineligibility for the check doesn't interfere with any of her constitutional rights.

In its reply brief to plaintiff Juana Rueda's opposition to its renewed motion to dismiss, the government said she failed to state a claim that her ineligibility for a $500 stimulus check based on her son's age interferes with her right to marriage, free speech or association.

Rueda's argument that the government created a "separate and unequal" status due to her not receiving a stimulus check over her son having turned 17 since the suit began is on shaky ground, the government said.

"Here, the combined effect of the provisions of [Section 6428 of the tax code] does not substantially burden Rueda's ability to enter into marriage or significantly impact the decisions, benefits, and obligations of marriage," the government said. "Rueda plainly is not placed into 'an unstable position of being in a second-tier marriage' simply on account of her ineligibility for part of a tax credit."

Because Rueda's husband uses an Individual Taxpayer Identification Number — an identifier used by foreign nationals who lack U.S. work authorization or, in some cases, lawful immigration status — they were ineligible for the advance refund of the Coronavirus Aid, Relief and Economic Security, or CARES, Act passed during the Trump administration.

Congress authorized the stimulus checks, aimed to help Americans reeling from the economic downturn caused by the novel coronavirus pandemic, when it passed the CARES Act in March 2020. But with the exception of military families, under Internal Revenue Code Section 6428(g)(1)(B), the act required both spouses to have Social Security numbers, which are given to U.S. citizens and foreigners with work authorization.

As a result, people with tax processing numbers known as Individual Taxpayer Identification Numbers — which could include foreign residents here without authorization as well as foreigners living here legally who don't have permission to work — and their otherwise eligible American spouses were excluded from the relief.

Rueda and other married couples who said they were denied checks brought the suit against the federal government in April 2020, arguing that by denying stimulus checks to these U.S. citizens, the federal government violated their constitutional rights to due process and free speech by penalizing them for marrying people with Social Security numbers and then "expressing" that marriage by filing taxes jointly.

But Rueda, an Ohio resident, declined to join more than a dozen other U.S. citizens and their immigrant spouses who voluntarily dropped their claims against the U.S. Treasury Department and the IRS in April citing amendments to the CARES Act.

For the other couples in the class, the CARES Act amendments that former President Donald Trump signed into law in December resolved their discrimination claims, according to their motion for voluntary dismissal earlier this year. The amended act no longer requires both spouses to have provided valid Social Security numbers on joint tax filings to receive stimulus funds.

However, Rueda said those changes were not enough to rectify the financial injury that the original CARES Act caused her family.

Last year, but for her husband's immigration status, Rueda's family would have qualified for $2,400, plus an additional $500 for each of their three children, based on their 2019 tax returns. Since then, one of her children has turned 17, making him too old to qualify for the $500 benefit as assessed based on their 2020 return.

Rueda pushed back earlier this month against the IRS' renewed call to toss her case, saying that her complaint centers on the "separate and unequal" frameworks that the IRS applied to determine which couples qualified for advance tax refunds before the first round of stimulus checks went out last year.

"Defendants mischaracterize plaintiff Rueda's lawsuit as seeking to restrain the assessment and collection of income taxes," she told a Maryland federal court.

Rueda restated her argument, previously affirmed by the court in August, that the suit does not challenge her family's tax bill, which would be barred under the Anti-Injunction Act and Declaratory Judgment Act, as the IRS asserted last month.

The IRS reasserted those arguments among others in its reply brief Wednesday, and said the court lacks jurisdiction because the relief requested by Rueda would restrain the assessment or collection of tax.

"She is mistaken when she argues that equitable relief would not restrain the assessment or collection of her taxes, since Rueda seeks a finding that the Constitution requires the IRS issue to her an additional $500 tax refund," the government said.

The government also said there is no unequal treatment of Rueda's marriage because she "is treated the same as any eligible individual who has a child 17 years of age or older — no matter whether she is married or to whom she is married."

Counsel for Rueda and the government did not immediately respond to requests for comment Thursday.

Rueda is represented by Robert P. Newman of the Law Office of Robert P. Newman PC, and Thomas A. Saenz, Belinda Escobosa Helzer, Andres Holguin-Flores, Nina Perales, Fátima Menéndez, Samantha Serna and Andrea Senteno of the Mexican American Legal Defense and Educational Fund.

The government is represented by Christopher James Williamson, Jordan A Konig and Nishant Kumar of the U.S. Department of Justice's Tax Division.

The case is Juana Rueda et al. v. Janet Yellen et al., case number 1:20-cv-01102, in the U.S. District Court for the District of Maryland.

--Additional reporting by Jennifer Doherty, Dylan Moroses and Suzanne Monyak. Editing by Michael Watanabe.

For a reprint of this article, please contact reprints@law360.com.