CIC Servs., LLC v. IRS

Summary

A suit to enjoin IRS Notice 2016–66 does not trigger the Anti-Injunction Act even though a violation of the Notice may result in a tax penalty.

Text

PRELIMINARY PRINT 
Volume 593 U. S. Part 1 
Pages 209–229 
OFFICIAL REPORTS 
OF 
THE SUPREME COURT 
May 17, 2021 
REBECCA A. WOMELDORF 
reporter of decisions 
Page Proof Pending Publication
NOTICE: This preliminary print is subject to formal revision before 
the bound volume is published. Users are requested to notify the Reporter 
of Decisions, Supreme Court of the United States, Washington, D.C. 20543, 
[email protected], of any typographical or other formal errors.

Page Proof Pending Publication
OCTOBER TERM, 2020 209 
Syllabus 
CIC SERVICES, LLC v. INTERNAL REVENUE 
SERVICE et al. 
certiorari to the united states court of appeals for 
the sixth circuit 
No. 19–930. Argued December 1, 2020—Decided May 17, 2021 
Internal Revenue Service (IRS) Notice 2016–66 requires taxpayers and 
“material advisors” like petitioner CIC to report information about cer-
tain insurance agreements called micro-captive transactions. The con-
sequences for noncompliance include both civil tax penalties and crimi-
nal prosecution. Prior to the Notice's frst reporting deadline, CIC fled 
a complaint challenging the Notice as invalid under the Administrative 
Procedure Act and asking the District Court to grant injunctive relief 
setting the Notice aside. The District Court dismissed the action as 
barred by the Anti-Injunction Act, which generally requires those con-
testing a tax's validity to pay the tax prior to fling a legal challenge. 
A divided panel of the Sixth Circuit affrmed. 
Held: A suit to enjoin Notice 2016–66 does not trigger the Anti-Injunction 
Act even though a violation of the Notice may result in a tax penalty. 
Pp. 216–226. 
(a) The Anti-Injunction Act, 26 U. S. C. § 7421(a), provides that “no 
suit for the purpose of restraining the assessment or collection of any 
tax shall be maintained in any court by any person.” Absent the tax 
penalty, this case would be easy: the Anti-Injunction Act would pose no 
barrier. A suit to enjoin a requirement to report information is not an 
action to restrain the “assessment or collection” of a tax, even if the 
information will help the IRS collect future tax revenue. See Direct 
Marketing Assn. v. Brohl, 575 U. S. 1, 9–10. The addition of a tax pen-
alty complicates matters, but it does not ultimately change the answer. 
Under the AntiInjunction Act, a “suit['s] purpose” depends on the ac-
tion's objective purpose, i. e., the relief the suit requests. Alexander v. 
“Americans United” Inc., 416 U. S. 752, 761. And CIC's complaint 
seeks to set aside the Notice itself, not the tax penalty that may follow 
the Notice's breach. The Government insists that no real difference 
exists between a suit to invalidate the Notice and one to preclude the 
tax penalty. But three aspects of the regulatory scheme here refute 
the idea that this is a tax action in disguise. First, the Notice imposes 
affrmative reporting obligations, inficting costs separate and apart 
from the statutory tax penalty. Second, it is hard to characterize CIC's 
suit as one to enjoin a tax when CIC stands nowhere near the cusp of

Page Proof Pending Publication
210 CIC SERVS., LLC v. IRS 
Syllabus 
tax liability; to owe any tax, CIC would have to frst violate the Notice, 
the IRS would then have to fnd noncompliance, and the IRS would then 
have to exercise its discretion to levy a tax penalty. Third, the 
presence of criminal penalties forces CIC to bring an action in just this 
form, with the requested relief framed in just this manner. The 
Government's proposed alternative procedure—having a party like CIC 
disobey the Notice and pay the resulting tax penalty before bringing a 
suit for a refund—would risk criminal punishment. All of these 
facts, taken together, show that CIC's suit targets the Notice, not the 
downstream tax penalty. Thus, the AntiInjunction Act imposes no bar. 
Pp. 216–223. 
(b) Allowing CIC's suit to proceed will not open the foodgates to pre-
enforcement tax litigation. When taxpayers challenge ordinary taxes, 
assessed on earning income, or selling stock, or entering into a business 
transaction, the underlying activity is legal, and the sole target for an 
injunction is the command to pay a tax. In that scenario, the Anti-
Injunction Act will always bar pre-enforcement review. And the analy-
sis is the same for a challenge to a so-called regulatory tax—that is, a 
tax designed mainly to infuence private conduct, rather than to raise 
revenue. The Anti-Injunction Act draws no distinction between regu-
latory and revenue-raising tax laws, Bob Jones Univ. v. Simon, 416 U. S. 
725, 743, and the Anti-Injunction Act kicks in even if a plaintiff 's true 
objection is to a regulatory tax's regulatory effect. By contrast, CIC's 
suit targets neither a regulatory tax nor a revenue-raising one; CIC's 
action challenges a reporting mandate separate from any tax. Because 
the IRS chose to address its concern about micro-captive agreements 
by imposing a reporting requirement rather than a tax, suits to en-
join that requirement fall outside the Anti-Injunction Act's domain. 
Pp. 223–224. 
925 F. 3d 247, reversed and remanded. 
Kagan, J., delivered the opinion for a unanimous Court. Sotomayor, 
J., post , p. 226, and K avanaugh, J ., post , p. 227, filed concurring 
opinions. 
Cameron T. Norris argued the cause for petitioner. With 
him on the briefs were Patrick Strawbridge, Bryan Weir, 
Adam R. Webber, and Kenneth A. Lazarus. 
Jonathan C. Bond argued the cause for respondents. 
With him on the brief were Acting Solicitor General Wall, 
Principal Deputy Assistant Attorney General Zuckerman,

Cite as: 593 U. S. 209 (2021) 211 
Opinion of the Court 
Deputy Solicitor General Stewart, Ellen Page DelSole, and 
Bethany B. Hauser.* 
Justice Kagan delivered the opinion of the Court. 
The Anti-Injunction Act, 26 U. S. C. § 7421(a), bars any 
“suit for the purpose of restraining the assessment or collec-
tion of any tax.” The question here is whether the Act pro-
hibits a suit seeking to set aside an information-reporting 
requirement that is backed by both civil tax penalties and 
criminal penalties. We hold that the Act does not preclude 
the suit. 
I 
Americans have never had much enthusiasm for paying 
taxes. The Nation's frst income taxes—adopted to fnance 
the Civil War—met with considerable (one might even say 
“taxing”) legal resistance. See Hickman & Kerska, Restor-
ing the Lost Anti-Injunction Act, 103 Va. L. Rev. 1683, 1723– 
1725 (2017). Some taxpayers, alleging the taxes illegal, 
*Briefs of amici curiae urging reversal were fled for the Americans for 
Prosperity Foundation by R. James Valvo III and Michael Pepson; for 
the Center for Taxpayer Rights by Carlton M. Smith and Meagan Horn; 
for the Chamber of Commerce of the United States of America by Yaakov 
M. Roth, Michael A. Carvin, and Robert Luther III; for the Institute for 
Free Speech by Allen Dickerson, Tyler Martinez, and Zac Morgan; for 
the National Federation of Independent Business Small Business Legal 
Center et al. by Joseph B. Judkins, A. Duane Webber, George M. Clarke, 
Daniel A. Rosen, and Joshua Odintz; for the National Taxpayers Union 
Foundation by Jospeh D. Henchman; and for Patrick J. Smith by Patrick 
J. Smith, pro se. 
Briefs of amici curiae urging affrmance were fled for Former Govern-
ment Offcials by Jonathan E. Taylor; and for Bryan T. Camp by Brian T. 
Camp, pro se. 
Briefs of amici curiae were fled for the Alabama Captive Insurance 
Association, Inc. et al. by K. Scott Hamilton and William Young Webb; 
for the American College of Tax Counsel by David W. Foster and Ar-
mando Gomez; for the Partnership for Conservation by Nicole M. Elliott; 
and for Kristin E. Hickman by Kristin E. Hickman, pro se. 
Page Proof Pending Publication

212 CIC SERVS., LLC v. IRS 
Opinion of the Court 
sought to enjoin collection efforts. And some courts granted 
the requested relief. See, e. g., Roback v. Taylor, 20 F. Cas. 
852, 854 (No. 11,877) (CC SD Ohio 1866); Bank for Savings 
v. Collector, 3 Wall. 495 (1866). Those rulings disrupted the 
fow of revenue to the Federal Government. As one late-
19th century treatise writer described the problem, “improv-
ident employment of the writ of injunction” threatened to 
“seriously embarrass” tax-dependent “operations of the gov-
ernment.” T. Cooley, Law of Taxation 536–537 (2d ed. 1886). 
Congress responded by enacting the Anti-Injunction Act. 
See Act of Mar. 2, 1867, § 10, 14 Stat. 475. In its current 
form (differing little from the original), the Act provides: 
“[N]o suit for the purpose of restraining the assessment or 
collection of any tax shall be maintained in any court by any 
person.” 26 U. S. C. § 7421(a). The Act, we have stated, 
“protects the [Federal] Government's ability to collect a con-
sistent stream of revenue, by barring litigation to enjoin or 
otherwise obstruct the collection of taxes.” National Fed-
eration of Independent Business v. Sebelius, 567 U. S. 519, 
543 (2012) (NFIB ). Because of the Act, a person can typi-
cally challenge a federal tax only after he pays it, by suing 
for a refund. See ibid. 
In an ordinary Anti-Injunction Act case, that short primer 
on the statute would naturally bring us to a description of 
the tax under dispute. But describing the tax implicated 
here will have to wait. For that tax—the thing that raises 
the Anti-Injunction Act question—comes into play only at 
the back end of a complex information-reporting scheme. 
The reporting scheme itself is where we must begin. 
As every taxpayer knows, the Internal Revenue Service 
(IRS) has broad power to require the submission of tax-
related information that it believes helpful in assessing and 
collecting taxes. See § 6011(a). Those reporting rules may 
apply not just to taxpayers but also to “material advisors”— 
individuals or entities that earn income from providing tax-
Page Proof Pending Publication

Page Proof Pending Publication
Cite as: 593 U. S. 209 (2021) 213 
Opinion of the Court 
payers with certain kinds of “aid, assistance, or advice.” 
§ 6111(b)(1)(A); see § 6111(a). This case starts with require-
ments that taxpayers and material advisors provide detailed 
information about what the Internal Revenue Code calls 
“reportable transaction[s].” § 6707A(c)(1). The Code de-
scribes those transactions simply as ones that “hav[e] a po-
tential for tax avoidance or evasion.” Ibid. Rather than 
give further specifcs, the Code delegates to the Secretary of 
the Treasury, acting through the IRS, the task of identifying 
particular transactions with the requisite risk of tax abuse. 
See §§ 6011, 6707A(c)(1). 
Using that authority, the IRS determined that so-called 
micro-captive transactions must be reported because of their 
potential for tax evasion. A micro-captive transaction is 
typically an insurance agreement between a parent company 
and a “captive” insurer under its control. The Code pro-
vides the parties to such an agreement with tax advantages. 
The insured party can deduct its premium payments as busi-
ness expenses. See § 162(a). And the insurer can exclude 
up to $2.2 million of those premiums from its own taxable 
income, under a tax break for small insurance companies. 
See § 831(b). The result is that the money does not get 
taxed at all. That much, for better or worse, is a congres-
sional choice. But no tax beneft should accrue if the money 
is not really for insurance—if the insurance contract is a 
sham, which the affliated companies have entered into only 
to escape tax liability. And according to the IRS, some 
micro-captive transactions are of that kind. So the IRS is-
sued Notice 2016–66 identifying certain micro-captive agree-
ments as reportable transactions. See 2016–47 Cum. Bull. 
745. That Notice compels taxpayers and material advisors 
associated with such an agreement to (among other things) 
“describe the transaction in suffcient detail for the IRS to 
be able to understand [its] tax structure.” Id., at 748. 
With that information, the IRS can check for facts—like cov-

214 CIC SERVS., LLC v. IRS 
Opinion of the Court 
erage for an “implausible risk” or premiums that “signif-
cantly exceed” prevailing rates—suggesting that the tax-
payer is not entitled to the tax beneft it claims. Id., at 
745–746. 
Noncompliance with Notice 2016–66 subjects a taxpayer 
or material advisor to stiff penalties—at last bringing us to 
the tax involved in this case, as well as to non-tax criminal 
consequences. By statutory provision, all failures to supply 
required information on reportable transactions, including 
the micro-captive transactions specifed in the Notice, are 
punishable by civil monetary penalties—$50,000 for advisors 
and up to that amount (depending on the amount of tax gain 
realized) for taxpayers. See §§ 6707(b), 6707A(b). In addi-
tion, an advisor may incur a daily $10,000 penalty for failing 
to furnish, on request, a list of the people it advised on a 
reportable transaction. See §§ 6708(a), 6112(a). And criti-
cally here, all those penalties are “deemed” to be “tax[es]” 
for purposes of the Code—including the Anti-Injunction Act. 
§ 6671(a). So, again, the civil penalties for violating Notice 
2016–66 are tax penalties, and must be treated as such. But 
no sooner do we fnd the tax appended to the Notice's report-
ing scheme than we encounter something else. Under the 
Code, any person who “willfully” breaches an IRS reporting 
requirement is also subject to criminal penalties. § 7203. 
Such a violation is a misdemeanor, punishable by fnes and 
up to one year in prison. And, unsurprisingly, that criminal 
liability is not “deemed” a tax. 
This suit challenges the lawfulness of Notice 2016–66. 
The petitioner is CIC Services, a material advisor to taxpay-
ers participating in microcaptive transactions. It brought 
this action before the Notice's frst reporting date, rather 
than after a reporting violation, let alone payment of penalty. 
(As far as we know, CIC has still not committed a violation, 
instead complying with the Notice while pressing this suit.) 
CIC's complaint mainly asserts that the IRS violated the 
Administrative Procedure Act (APA) by issuing the Notice 
Page Proof Pending Publication

Page Proof Pending Publication
Cite as: 593 U. S. 209 (2021) 215 
Opinion of the Court 
without notice-and-comment procedures. The complaint 
also alleges that the Notice is arbitrary and capricious under 
the APA because it imposes new reporting requirements 
without proven need. So the complaint asks the court to 
“set[ ] aside IRS Notice 2016–66”—more specifcally, to “en-
join the enforcement of Notice 2016–66 as an unlawful IRS 
rule” and to “declar[e] that Notice 2016–66 is unlawful.” 
Complaint in No. 17–CV–110 (ED Tenn., Mar. 27, 2017), Doc. 
1, pp. 2, 16 (Complaint). 
But the suit has not yet proceeded to the merits. The 
Government moved to dismiss the action based on the Anti-
Injunction Act, arguing that CIC's “requested relief would 
prevent the IRS from assessing a tax penalty against mate-
rial advisors” that disregard the Notice's reporting require-
ments. Motion to Dismiss in No. 17–cv–110 (ED Tenn., May 
30, 2017), Doc. 25–1, p. 9. In the Government's view, the 
way for CIC to bring its claims is to disobey the Notice and 
then sue for a refund of any resulting tax penalty. The Dis-
trict Court agreed. It reasoned that CIC's suit sought “to 
restrain the IRS's assessment or collection” of the tax pen-
alty that could be imposed for noncompliance. 2017 WL 
5015510, *4 (ED Tenn., Nov. 2, 2017). The Court of Appeals 
for the Sixth Circuit affrmed in a divided decision. Accord-
ing to the majority, CIC's suit would “restrain (indeed elimi-
nate)” the tax penalty by “invalidat[ing] the Notice, which is 
[that tax's] entire basis.” 925 F. 3d 247, 255 (2019). Judge 
Nalbandian dissented. “[T]his is not,” he wrote, “a dispute 
over taxes”: “[A] suit to enjoin the enforcement of a report-
ing requirement is not” one to restrain a tax's collection. 
Id., at 259–260. Under the majority's view, the dissent also 
objected, CIC could challenge the reporting scheme only by 
“violat[ing] the law” and risking “criminal prosecution.” 
Id., at 263. The Sixth Circuit denied a petition for rehearing 
en banc, over a dissent from seven judges. 
We granted certiorari, 590 U. S. ––– (2020), and now 
reverse.

216 CIC SERVS., LLC v. IRS 
Opinion of the Court 
II 
A 
The issue here, most concretely stated, is whether the 
Anti-Injunction Act bars CIC's suit complaining that Notice 
2016–66's reporting requirements violate the APA. Once 
again, the Anti-Injunction Act provides, with exceptions not 
relevant here, that “no suit for the purpose of restraining the 
assessment or collection of any tax shall be maintained in 
any court by any person.” § 7421(a). If CIC's suit is not 
for that purpose, it can go forward. If the suit is for that 
purpose, it must be dismissed. In that event, CIC could 
contest the legality of the reporting rules only by violating 
them and suing for a refund of a later tax penalty. 
If that downstream tax penalty did not exist, this case 
would be a cinch: The Anti-Injunction Act would not apply 
and the suit could proceed. A reporting requirement is not 
a tax; and a suit brought to set aside such a rule is not one 
to enjoin a tax's assessment or collection. That is so even 
if the reporting rule will help the IRS bring in future tax 
revenue—here, by identifying sham insurance transactions. 
See supra, at 213–214. We said as much in Direct Market-
ing Assn. v. Brohl, 575 U. S. 1 (2015).
1 In that case, out-of-
state retailers wanted to invalidate a Colorado law requiring 
them to report to the State's Department of Revenue any 
sale to a state resident on which they had not collected tax. 
We allowed the suit to proceed, explaining that a suit about 
reporting requirements is not about the “assessment” or 
“collection” of taxes. Id., at 9–10. “Information gather-
ing,” we stated, is “a phase of tax administration procedure 
that occurs before assessment [or] collection.” Id., at 8. 
1 Direct Marketing construed the Tax Injunction Act—a statute, “mod-
eled on the Anti-Injunction Act,” that limits injunctive relief against state 
tax collection. 575 U. S., at 8. This Court has “assume[d] that words 
used in both Acts,” such as “assessment” and “collection,” are “generally 
used in the same way.” Ibid. 
Page Proof Pending Publication

Cite as: 593 U. S. 209 (2021) 217 
Opinion of the Court 
And it did not matter that the reporting requirements would 
“facilitate collection of taxes”—there, by identifying resi-
dents who owed sales taxes. Id., at 12. The statute's limit 
on injunctions, we said, is “not keyed to all activities that 
may improve a State's ability to assess and collect taxes.” 
Id., at 11. It is instead “keyed to the acts of assessment 
[and] collection themselves.” Id., at 12. That means a suit 
directed at ordinary reporting duties can go forward, unim-
peded by the Anti-Injunction Act. On this much, even the 
Government agrees. See Brief for Respondents 27. 
The complication here is that Notice 2016–66's reporting 
obligations (unlike those in Direct Marketing) are backed up 
by a statutory tax penalty. As earlier described, the Code 
provides that a taxpayer who violates a demand for informa-
tion about a reportable transaction—including those speci-
fed in the Notice—is subject to civil monetary penalties. 
See supra, at 214. And the Code “deem[s]” those civil pen-
alties to be “tax[es]” as the Anti-Injunction Act uses that 
term. § 6671(a); see NFIB, 567 U. S., at 544 (“Congress can, 
of course,” direct that a penalty “be treated as a tax for 
purposes of the AntiInjunction Act”). The question thus be-
comes whether that added tax penalty changes the analysis. 
Does its presence—as a sanction for fouting the Notice— 
mean that CIC's suit is, as the Anti-Injunction Act provides, 
“for the purpose of restraining the assessment or collection 
of any tax”? 
In considering a “suit['s] purpose,” we inquire not into a 
taxpayer's subjective motive, but into the action's objective 
aim—essentially, the relief the suit requests. The parties 
agree on that interpretation, as both consistent with the 
Act's ordinary meaning and necessary for the Act's adminis-
tration. See Brief for Respondents 40; Reply Brief 4; Tr. of 
Oral Arg. 15, 34. The purpose of a measure is “the end or 
aim to which [it] is directed.” N. Webster, An American 
Dictionary of the English Language (rev. ed. 1844); see Web-
ster's Third New International Dictionary 1847 (1976). And 
Page Proof Pending Publication

218 CIC SERVS., LLC v. IRS 
Opinion of the Court 
in this context, that aim is not best assessed by probing an 
individual taxpayer's innermost reasons for suing. Down 
that path lies too much potential for circumventing the Act. 
Instead, this Court has looked to the face of the taxpayer's 
complaint. See, e. g., Bob Jones Univ. v. Simon, 416 U. S. 
725, 738 (1974). We have asked about what the Government 
here calls “the substance of the suit”—the claims brought 
and injuries alleged—to determine the suit's object. Brief 
for Respondents 40. And most especially, we have looked 
to the “relief requested”—the thing sought to be enjoined. 
Alexander v. “Americans United” Inc., 416 U. S. 752, 761 
(1974); see Bob Jones, 416 U. S., at 732 (“[A] suit seeking 
[injunctive] relief ” against a tax “falls squarely within the 
literal scope of the Act”). The Anti-Injunction Act kicks in 
when the target of a requested injunction is a tax obliga-
tion—or stated in the Act's language, when that injunction 
runs against the “collection or assessment of [a] tax.” 
It is in characterizing the purpose of CIC's suit that the 
parties' disagreement emerges. Recall that CIC's complaint 
avers that Notice 2016–66 violates the APA. See supra, at 
214–215. And the complaint describes the relief requested 
as “setting aside IRS Notice 2016–66,” “enjoin[ing] the en-
forcement of Notice 2016–66 as an unlawful IRS rule,” and 
“declaring that Notice 2016–66 is unlawful.” Complaint 2, 
16. According to CIC, all of that reveals the suit's aim as 
invalidating the Notice and thereby eliminating its onerous 
reporting requirements—not as blocking the downstream 
tax penalty that may sanction the Notice's breach. See 
Reply Brief 6. By contrast, the Government contends that 
the suit's purpose is to stop the collection of the tax itself. 
See Brief for Respondents 12. In making that claim, the 
Government picks up on the word “enforcement” in CIC's 
request for relief: Because the Notice is enforced through tax 
penalties, the Government claims, “enjoin[ing] the [Notice's] 
enforcement,” as CIC wants, means preventing the IRS from 
collecting taxes. Id., at 23, 37–38. And even putting aside 
Page Proof Pending Publication

Cite as: 593 U. S. 209 (2021) 219 
Opinion of the Court 
that word, the Government insists that there is no real dif-
ference between a suit to invalidate the Notice and one to 
preclude the tax penalty. See id., at 38; Tr. of Oral Arg. 54– 
56. Avoiding the burdens of compliance with the Notice and 
avoiding the tax that sanctions noncompliance, the Govern-
ment asserts, are “two sides of the same coin.” Brief for 
Respondents 37. The Government thus suggests that by 
framing this suit as an attack on the Notice, CIC is trying to 
“eva[de] the Anti-Injunction Act through artful pleading.” 
Id., at 38. 
To begin with, we agree with CIC's reading of its com-
plaint. The complaint contests the legality of Notice 2016– 
66, not of the statutory tax penalty that serves as one way 
to enforce it. CIC alleges that the Notice is procedurally 
and substantively fawed; it brings no legal claim against the 
separate statutory tax. And CIC's complaint asks for in-
junctive relief from the Notice's reporting rules, not from 
any impending or eventual tax obligation. Contra the Gov-
ernment's view, a request in an APA action to “enjoin the 
enforcement” of an IRS reporting rule is most naturally un-
derstood as a request to “set aside” that rule (as the com-
plaint elsewhere says), not to block the application of a pen-
alty that might be imposed for some yet-to-happen violation. 
5 U. S. C. § 706; Complaint 2, 9, 16. Indeed, CIC's complaint 
barely mentions that penalty. The complaint, and particu-
larly its request for relief, sets out this suit's purpose as en-
joining the Notice. 
And we reject the Government's argument that an injunc-
tion against the Notice is the same as one against the tax 
penalty—just “two sides of the same coin.” Brief for Re-
spondents 37. If that view were right, of course, no amount 
of artful pleading would avail: CIC's suit targeting the No-
tice would then in fact target the tax, and the Anti-
Injunction Act would apply. But the Government's take is 
wrong. Three aspects of the regulatory scheme here, taken 
in combination, refute the idea that this is a tax action in 
Page Proof Pending Publication

Page Proof Pending Publication
220 CIC SERVS., LLC v. IRS 
Opinion of the Court 
disguise. They show that in addressing Notice 2016–66, this 
suit (and any resulting injunction) addresses something 
other than the tax penalty helping to back it up. 
First, the Notice imposes affrmative reporting obliga-
tions, inficting costs separate and apart from the statutory 
tax penalty. As described earlier, the Notice levies no tax. 
Rather, it compels taxpayers and their material advisors to 
collect and submit detailed information about micro-captive 
transactions and their participants. See supra, at 213–214. 
And obeying that mandate is likely to involve signifcant 
time and expense. Here, for example, CIC estimates that it 
will have to spend “hundreds of hours of labor and in excess 
of $60,000 per year” to comply with the Notice. See Com-
plaint ¶40. Costs of that kind may well exceed, or even 
dwarf, the tax penalties for a violation. So in bringing this 
suit, CIC challenges a regulatory mandate that (1) is not a 
tax and (2) entails compliance costs whose amount is not tied 
to, and often goes beyond, any tax. Simply stated, this suit 
attempts to get out from under the (non-tax) burdens of a 
(non-tax) reporting obligation. Of course, if the suit suc-
ceeds, CIC will never have to worry about the tax penalty; 
once the reporting duty disappears, the sanction becomes ir-
relevant. But that is the suit's after-effect, not its sub-
stance. The suit still targets the reporting mandates—the 
independently onerous reporting mandates—of the Notice 
itself. 
Second and relatedly, the Notice's reporting rule and the 
statutory tax penalty are several steps removed from each 
other. Consider what has to happen before CIC owes taxes 
to the IRS. To start, CIC has to withhold required informa-
tion about a micro-captive transaction that the Notice covers. 
(And note, for whatever it is worth, that CIC disclaims any 
intent to do so while the Notice remains the law. See Brief 
for Petitioner 29.) Next, the IRS must determine (often no 
small matter) that a violation of the Notice has in fact 
occurred. And fnally, the IRS must make the—entirely 
discretionary—decision to impose a tax penalty. See

Page Proof Pending Publication
Cite as: 593 U. S. 209 (2021) 221 
Opinion of the Court 
§ 6707A(d). If and only if all those things occur does tax 
liability attach. That threefold contingency matters in as-
sessing whether the Anti-Injunction Act applies. Even the 
Government concedes that when there is “too attenuated a 
chain of connection” between an upstream duty and a “down-
stream tax,” a court should not view a suit challenging the 
duty as aiming to “restrain the assessment or collection of a 
tax.” Tr. of Oral Arg. 38–39.
2 That principle favors CIC 
here. CIC stands nowhere near the cusp of tax liability: 
Between the upstream Notice and the downstream tax, the 
river runs long. So it is again hard to characterize this suit's 
purpose as enjoining a tax. 
Third, violation of the Notice is punishable not only by a 
tax, but by separate criminal penalties. As noted above, 
any “[w]illful failure” to comply with the Notice's reporting 
rules can lead to as much as a year in prison. § 7203; see 
supra, at 214. That fact clinches the case for treating a suit 
brought to set aside the Notice as different from one brought 
to restrain its back-up tax. For the existence of criminal 
penalties explains why an entity like CIC must bring an ac-
tion in just this form, framing its requested relief in just this 
2 The Government's own example proves our point. Environmental 
Protection Agency (EPA) regulations governing the resale of diesel fuel 
are enforced in part through a penalty that Congress has deemed a tax, 
in just the way it has the penalty here. See §§ 6720A(a), 6671(a). The 
Government concedes that “a court might well conclude” that a suit to 
enjoin the enforcement of the EPA regulations is “not one `for the purpose 
of restraining' tax assessment or collection, even if ” a ruling for the plain-
tiff would “have an eventual downstream impact on the IRS's collection 
of the [tax] penalty.” Brief for Respondents 44. But that example is no 
different from this case, save that here the IRS, not the EPA, administers 
the regulatory mandate. And that one variance should not matter. As 
explained above, an IRS reporting requirement absent a tax penalty no 
more triggers the Anti-Injunction Act than an EPA rule does. See Direct 
Marketing Assn. v. Brohl, 575 U. S. 1, 11–12 (2015); supra, at 216–217. So 
adding an identical tax penalty to each of those regulatory schemes should 
affect the Anti-Injunction Act analysis in the same way—which is to say, 
not at all.

222 CIC SERVS., LLC v. IRS 
Opinion of the Court 
way. Recall what the Government would have such a party 
do: disobey the Notice, pay a resulting tax penalty, and then 
bring a refund suit. See Brief for Respondents 16–17; 
supra, at 215. That approach—not the Anti-Injunction 
Act's familiar pay-now-sue-later procedure, but one with law-
breaking at the start—subjects the party to criminal punish-
ment.
3 And that is not the kind of thing an ordinary person 
risks, even to contest the most burdensome regulation. So 
the criminal penalties here practically necessitate a pre-
enforcement, rather than a refund, suit—if there is to be a 
suit at all. And so too, those penalties necessitate a suit 
aimed at eliminating the Notice, rather than the statutory 
tax penalty. Only an injunction against the Notice gives the 
taxpayer or advisor what it wants: relief from the obligation 
to report transactions. An injunction against the tax pen-
alty would not do so. Because such an injunction would 
leave both the reporting duty and the criminal penalty un-
touched, the taxpayer or advisor would still have to accede 
to the Notice's demands on pain of prison time. Small won-
der that CIC's complaint asks for an injunction against the 
Notice, not one against the tax penalty helping to enforce it. 
Contrary to the Government's assertion, those injunctions 
are not two sides of one coin. 
3 The Government suggests that criminal liability would not attach to a 
taxpayer or advisor who refuses to comply with the Notice out of a “good 
faith” objection to its validity. Brief for Respondents 46. It is easy to 
see why the Government wishes that were true: In none of our Anti-
Injunction Act cases has postponing a taxpayer's suit until after payment 
exposed him to criminal penalties—because in no other case has that ap-
proach required a taxpayer to break a law in the frst instance. But this 
Court's precedent precludes the Government's effort to erase the criminal 
penalties from this case. We have held in no uncertain terms that “a 
defendant's views about the validity” of a tax provision—even if held “in 
good faith”—do not “negate[ ] willfulness or provide[ ] a defense to crimi-
nal prosecution.” Cheek v. United States, 498 U. S. 192, 204, 206 (1991). 
So in failing to report transactions as the Notice requires, an advisor like 
CIC would risk criminal punishment. 
Page Proof Pending Publication

Cite as: 593 U. S. 209 (2021) 223 
Opinion of the Court 
For all these reasons, the purpose of CIC's suit is not 
to “restrain[ ] the assessment or collection of [a] tax.” 
§ 7421(a). The complaint, and particularly the relief sought, 
targets the Notice's reporting rule, asking that it be set aside 
as a violation of the APA. And nothing in that request 
smacks of artful pleading. To the contrary. That the No-
tice imposes an affrmative duty independent of the tax, en-
tailing its own substantial costs; that the Notice and tax may 
remain forever divorced, depending on both CIC's and the 
IRS's choices; that not only the tax but also criminal penal-
ties backstop the Notice—these facts, when combined, 
readily explain why CIC's suit targets the upstream report-
ing mandate, not the downstream tax. And because that is 
the suit's aim, the Anti-Injunction Act imposes no bar. 
B 
The Government worries that a ruling for CIC will enfee-
ble the Anti-Injunction Act. If CIC can bring this suit now, 
the Government claims, a wave of pre-enforcement actions 
will follow. Canny plaintiffs will assert non-tax reasons (in-
cluding objections to regulatory demands) for contesting the 
imposition of taxes. See Brief for Respondents 32, 38. 
And in that way, taxpayers will obtain just what the Anti-
Injunction Act is meant to foreclose—orders “preemptively 
shield[ing]” their activities or transactions from “tax conse-
quences.” Id., at 219–223. More and more, the Govern-
ment warns, tax litigation will shift from refund actions to 
pre-enforcement suits. And the IRS's ability to assess and 
collect taxes will decline in proportion. 
The Government, however, much overstates the possible 
consequences of today's ruling. As we have explained, this 
suit falls outside the Anti-Injunction Act because the injunc-
tion it requests does not run against a tax at all. See supra, 
at 219–223. The suit contests, and seeks relief from, a sepa-
rate legal mandate; the tax appears on the scene—as crimi-
nal penalties do too—only to sanction that mandate's viola-
Page Proof Pending Publication

224 CIC SERVS., LLC v. IRS 
Opinion of the Court 
tion. Or as Judge Nalbandian put the point below: “[T]his 
is not a dispute over taxes.” 925 F. 3d, at 259; see supra, at 
215. By contrast, the kind of case the Government invokes 
in making its foodgates claim is a confict over taxes, 
whether on earning income, or selling stock, or entering into 
a business transaction. In such a case, the legal rule at 
issue is a tax provision. The tax does not backstop the vio-
lation of another law that independently prohibits or com-
mands an action. Instead, the tax imposes a cost on per-
fectly legal behavior. So there is no target for an injunction 
other than the command to pay the tax; there is no non-
tax legal obligation to restrain. Given that fact, the Anti-
Injunction Act bars pre-enforcement review, prohibiting a 
taxpayer from bringing (as the Government fears) a “pre-
emptive[ ]” suit to foreclose tax liability. Brief for Respond-
ents 13. And it does so always—whatever the taxpayer's 
subjective reason for contesting the tax at issue. If the dis-
pute is about a tax rule—as it is in the run-of-the-mine suits 
the Government raises—the sole recourse is to pay the tax 
and seek a refund. 
That is just as true when the tax in question is a so-called 
regulatory tax—that is, a tax designed mainly to infuence 
private conduct, rather than to raise revenue. This Court 
has long since “abandoned the view that brightline distinc-
tions exist between regulatory and revenueraising taxes.” 
Bob Jones, 416 U. S., at 743, n. 17; see id., at 741, n. 12; Son-
zinsky v. United States, 300 U. S. 506, 513 (1937) (“Every tax 
is in some measure regulatory”). And for just as long, we 
have rejected the view that regulatory tax cases have a spe-
cial pass from the Anti-Injunction Act. A century ago, the 
Court in Bailey v. George, 259 U. S. 16 (1922), held that the 
Act barred a pre-enforcement suit challenging a tax intended 
to discourage the (then lawful) use of child labor. Some 50 
years later, the Court in Bob Jones and Americans United 
similarly held that the Act barred preenforcement suits chal-
Page Proof Pending Publication

Page Proof Pending Publication
Cite as: 593 U. S. 209 (2021) 225 
Opinion of the Court 
lenging IRS decisions to revoke the tax-exempt status of 
entities that had engaged in, respectively, discriminatory 
conduct and lobbying activity—conduct that was legal but 
disfavored for tax purposes. See 416 U. S., at 735; 416 U. S., 
at 755. In doing so, the Court made clear that the plaintiffs' 
reasons for suing did not matter: It was, for example, irrele-
vant that Bob Jones University objected to the IRS's “at-
tempt to regulate the admissions policies of private universi-
ties.” 416 U. S., at 739. Nor did it matter that the tax 
ruling was in truth an effort to change those policies. 
Regardless of those facts, the suits sought to prevent the 
levying of taxes, and so could not go forward. The Anti-
Injunction Act, we said then and say again now, draws no 
distinction between regulatory and revenue-raising tax 
rules. It applies whenever a suit calls for enjoining the 
IRS's assessment and collection of taxes—of whatever kind. 
What sets this suit apart is that it no more targets a regu-
latory tax than a revenue-raising one. One last time: CIC's 
action challenges, in both its substantive allegations and its 
request for an injunction, a regulatory mandate—a reporting 
requirement—separate from any tax. Or said otherwise, 
the suit targets not a regulatory tax, but instead a regulation 
that is not a tax. Here, the tax functions, alongside criminal 
penalties, only as a sanction for noncompliance with the 
reporting obligation. Had Congress, or the IRS acting 
through a delegation, imposed a tax on micro-captive trans-
actions themselves—and had CIC then brought a pre-
enforcement suit to prevent the IRS from applying that 
tax—the Anti-Injunction Act would have kicked in. Then, 
CIC would have had to pay the tax and seek a refund. But 
Congress and the IRS chose a different path. They imposed 
a non-tax, reporting obligation to address their concerns 
about micro-captive agreements. And by that choice, they 
took suits to enjoin their regulatory response outside the 
Anti-Injunction Act's domain.

226 CIC SERVS., LLC v. IRS 
Sotomayor, J., concurring 
III 
CIC's suit aims to enjoin a standalone reporting require-
ment, whose violation may result in both tax penalties and 
criminal punishment. That is not a suit “for the purpose of 
restraining the [IRS's] assessment or collection” of a tax, and 
so does not trigger the AntiInjunction Act. We reverse the 
judgment below and remand the case for further proceedings 
consistent with this opinion. 
It is so ordered. 
Justice Sotomayor, concurring. 
I concur because I agree that CIC Services, a material 
advisor to taxpayers engaged in micro-captive transactions, 
does not bring this suit “for the purpose of restraining the 
assessment or collection of any tax,” 26 U. S. C. § 7421(a), but 
rather for the purpose of avoiding the regulatory burdens 
imposed by Notice 2016–66 (Notice). The three factors 
identifed by the majority, taken in combination, show that 
this suit falls outside the ambit of the Anti-Injunction Act 
(AIA): The Notice imposes substantial compliance costs that 
are unconnected to (and possibly far greater than) CIC Serv-
ices' potential tax liability; the causal chain connecting the 
Notice's reporting requirement to any tax is attenuated; and 
the Notice is enforced by criminal as well as tax penalties. 
See ante, at 219–223. 
I write separately to highlight that the answer might be 
different if CIC Services were a taxpayer instead of a tax 
advisor. Taxpayers who are subject to reporting require-
ments backed by tax penalties face a choice: (1) provide in-
formation about their own fnances to the Internal Revenue 
Service (IRS), which may in turn use that information to 
calculate the taxpayers' liability more accurately, or (2) re-
fuse to provide such information and pay a noncompliance 
penalty, which Congress has deemed a tax. For a given tax-
payer, then, a tax on noncompliance may operate as a rough 
substitute for the tax liability she has evaded by withholding 
Page Proof Pending Publication

Cite as: 593 U. S. 209 (2021) 227 
Kavanaugh, J., concurring 
required information. Moreover, compared with their tax 
advisors, taxpayers may incur less expense in collecting and 
reporting their own fnancial information. Such informa-
tion, after all, is about those taxpayers' own activities and is 
likely to be in their possession. Hence, while it will often 
be correct to conclude that a tax advisor challenging an IRS 
reporting requirement is not doing so “for the purpose of 
restraining” a tax on noncompliance, the analysis may be 
different when it comes to taxpayers. 
This case provides no occasion for the Court to inquire into 
the full quantity or variety of IRS reporting requirements 
that are backed by tax penalties, nor to predetermine 
whether the AIA would allow hypothetical taxpayers to 
challenge those requirements in court. Whether such suits 
may proceed will depend on a context-specifc inquiry into 
“the relief the suit requests” and the “aspects of the regula-
tory scheme” at issue. Ante, at 217, 219. On that under-
standing, I concur. 
Justice Kavanaugh, concurring. 
I join the Court's opinion in full. I write separately to 
underscore what remains (and does not remain) of Alexander 
v. “Americans United” Inc., 416 U. S. 752 (1974), and Bob 
Jones Univ. v. Simon, 416 U. S. 725 (1974), in the wake of 
the Court's decision today. 
In Americans United and Bob Jones, this Court adopted 
a straightforward and broad rule for determining whether a 
pre-enforcement suit is barred by the Anti-Injunction Act. 
Under that rule, if a pre-enforcement suit would “necessarily 
preclude” the assessment or collection of a tax, that suit is 
barred by the Act and the taxpayer needs to bring a refund 
suit after paying the tax. Bob Jones, 416 U. S., at 732; see 
also Americans United, 416 U. S., at 760–761. In other 
words, Americans United and Bob Jones instruct courts to 
look to the effects of a suit. And if a pre-enforcement suit 
would have the effect of preventing the assessment or 
Page Proof Pending Publication

Page Proof Pending Publication
228 CIC SERVS., LLC v. IRS 
Kavanaugh, J., concurring 
collection of a tax, then that suit is barred by the Anti-
Injunction Act. 
Many courts have taken Americans United and Bob Jones 
at their word. And the Sixth Circuit did so here. In this 
case, CIC challenged a regulation that was backed by tax 
penalties—more specifcally, penalties that the Tax Code la-
bels as “taxes” for purposes of the Anti-Injunction Act. See 
26 U. S. C. § 6671(a). Because invalidating the regulation at 
issue would “necessarily preclude” the collection of tax pen-
alties (labeled as “taxes” by the Tax Code) stemming from 
an individual's violation of that regulation, the Sixth Circuit 
concluded that CIC's pre-enforcement suit was barred by the 
Anti-Injunction Act under Americans United and Bob 
Jones. That was a reasonable conclusion to reach, especially 
given that CIC's primary argument here is the same basic 
argument that this Court rejected in both Americans 
United and Bob Jones. Compare Brief for Respondent in 
Alexander v. “Americans United” Inc., O. T. 1973, No. 72– 
1371, p. 25 (It “is clear that the `purpose' of this law suit” “is 
not to restrain the assessment or collection of any tax 
but to challenge the constitutionality of an essentially regu-
latory Act of Congress”), with Brief for Petitioner 17 (“The 
purpose of CIC's suit” “is to avoid the burdens of the report-
ing requirement—not to avoid or dispute any tax liability”). 
The Court today holds, however, that CIC's pre -
enforcement suit is not barred by the Anti-Injunction Act. 
In so holding, the Court in effect carves out a new exception 
to Americans United and Bob Jones for pre-enforcement 
suits challenging regulations backed by tax penalties. I 
agree with the Court's decision to narrow Americans United 
and Bob Jones because the broad “effects” rule articulated 
in those decisions is hard to square with the text of the Anti-
Injunction Act, which bars only a pre-enforcement “suit for 
the purpose of restraining the assessment or collection of 
any tax.” § 7421(a). Contrary to some sweeping language 
in Americans United and Bob Jones, the Anti-Injunction Act

Cite as: 593 U. S. 209 (2021) 229 
Kavanaugh, J., concurring 
is best read as directing courts to look at the stated object 
of a suit rather than the suit's downstream effects. See 
ante, at 217–218. And for that reason, as the Court ex-
plains, the text of the Anti-Injunction Act is best read as 
distinguishing (i) pre-enforcement suits challenging the reg-
ulatory component of a regulatory tax, which remain prohib-
ited because the requested relief necessarily runs against the 
assessment or collection of a tax, from (ii) pre-enforcement 
suits challenging a regulation backed by a tax penalty, which 
may proceed because the requested relief runs against an 
independent legal obligation. 
In short, as I understand the Court's opinion today, the 
rule going forward is that pre-enforcement suits challenging 
regulatory taxes or traditional revenue-raising taxes are still 
ordinarily barred by the Anti-Injunction Act. But pre-
enforcement suits challenging regulations backed by tax 
penalties are ordinarily not barred, even though those suits, 
if successful, would necessarily preclude the collection or as-
sessment of what the Tax Code refers to as a tax. 
With those observations, I join the Court's opinion in full. 
Page Proof Pending Publication

Retrieval chunks

• #1

  PRELIMINARY PRINT Volume 593 U. S. Part 1 Pages 209–229 OFFICIAL REPORTS OF THE SUPREME COURT May 17, 2021 REBECCA A. WOMELDORF reporter of decisions Page Proof Pending Publication NOTICE: This preliminary print is subject to formal revision before the bound volume is published. Users are requested to notif…

• #2

  “Americans United” Inc., 416 U. S. 752, 761. And CIC's complaint seeks to set aside the Notice itself, not the tax penalty that may follow the Notice's breach. The Government insists that no real difference exists between a suit to invalidate the Notice and one to preclude the tax penalty. But three aspects of the…

• #3

  the IRS chose to address its concern about micro-captive agreements by imposing a reporting requirement rather than a tax, suits to en- join that requirement fall outside the Anti-Injunction Act's domain. Pp. 223–224. 925 F. 3d 247, reversed and remanded. Kagan, J., delivered the opinion for a unanimous Court. So…

• #4

  ment Offcials by Jonathan E. Taylor; and for Bryan T. Camp by Brian T. Camp, pro se. Briefs of amici curiae were fled for the Alabama Captive Insurance Association, Inc. et al. by K. Scott Hamilton and William Young Webb; for the American College of Tax Counsel by David W. Foster and Ar- mando Gomez; for the Part…

• #5

  apply not just to taxpayers but also to “material advisors”— individuals or entities that earn income from providing tax- Page Proof Pending Publication Page Proof Pending Publication Cite as: 593 U. S. 209 (2021) 213 Opinion of the Court payers with certain kinds of “aid, assistance, or advice.” § 6111(b)(1)(A…

• #6

  payer is not entitled to the tax beneft it claims. Id., at 745–746. Noncompliance with Notice 2016–66 subjects a taxpayer or material advisor to stiff penalties—at last bringing us to the tax involved in this case, as well as to non-tax criminal consequences. By statutory provision, all failures to supply requir…

• #7

  rule” and to “declar[e] that Notice 2016–66 is unlawful.” Complaint in No. 17–CV–110 (ED Tenn., Mar. 27, 2017), Doc. 1, pp. 2, 16 (Complaint). But the suit has not yet proceeded to the merits. The Government moved to dismiss the action based on the Anti- Injunction Act, arguing that CIC's “requested relief would …

• #8

  would be a cinch: The Anti-Injunction Act would not apply and the suit could proceed. A reporting requirement is not a tax; and a suit brought to set aside such a rule is not one to enjoin a tax's assessment or collection. That is so even if the reporting rule will help the IRS bring in future tax revenue—here, b…

• #9

  term. § 6671(a); see NFIB, 567 U. S., at 544 (“Congress can, of course,” direct that a penalty “be treated as a tax for purposes of the AntiInjunction Act”). The question thus be- comes whether that added tax penalty changes the analysis. Does its presence—as a sanction for fouting the Notice— mean that CIC's sui…

• #10

  “declaring that Notice 2016–66 is unlawful.” Complaint 2, 16. According to CIC, all of that reveals the suit's aim as invalidating the Notice and thereby eliminating its onerous reporting requirements—not as blocking the downstream tax penalty that may sanction the Notice's breach. See Reply Brief 6. By contrast,…

• #11

  tion against the Notice is the same as one against the tax penalty—just “two sides of the same coin.” Brief for Re- spondents 37. If that view were right, of course, no amount of artful pleading would avail: CIC's suit targeting the No- tice would then in fact target the tax, and the Anti- Injunction Act would ap…

• #12

  intent to do so while the Notice remains the law. See Brief for Petitioner 29.) Next, the IRS must determine (often no small matter) that a violation of the Notice has in fact occurred. And fnally, the IRS must make the—entirely discretionary—decision to impose a tax penalty. See Page Proof Pending Publication C…

• #13

  more triggers the Anti-Injunction Act than an EPA rule does. See Direct Marketing Assn. v. Brohl, 575 U. S. 1, 11–12 (2015); supra, at 216–217. So adding an identical tax penalty to each of those regulatory schemes should affect the Anti-Injunction Act analysis in the same way—which is to say, not at all. 222 CIC…

• #14

  good faith”—do not “negate[ ] willfulness or provide[ ] a defense to crimi- nal prosecution.” Cheek v. United States, 498 U. S. 192, 204, 206 (1991). So in failing to report transactions as the Notice requires, an advisor like CIC would risk criminal punishment. Page Proof Pending Publication Cite as: 593 U. S. 2…

• #15

  tion. Or as Judge Nalbandian put the point below: “[T]his is not a dispute over taxes.” 925 F. 3d, at 259; see supra, at 215. By contrast, the kind of case the Government invokes in making its foodgates claim is a confict over taxes, whether on earning income, or selling stock, or entering into a business transac…

• #16

  at 755. In doing so, the Court made clear that the plaintiffs' reasons for suing did not matter: It was, for example, irrele- vant that Bob Jones University objected to the IRS's “at- tempt to regulate the admissions policies of private universi- ties.” 416 U. S., at 739. Nor did it matter that the tax ruling was…

• #17

  assessment or collection of any tax,” 26 U. S. C. § 7421(a), but rather for the purpose of avoiding the regulatory burdens imposed by Notice 2016–66 (Notice). The three factors identifed by the majority, taken in combination, show that this suit falls outside the ambit of the Anti-Injunction Act (AIA): The Notice…

• #18

  underscore what remains (and does not remain) of Alexander v. “Americans United” Inc., 416 U. S. 752 (1974), and Bob Jones Univ. v. Simon, 416 U. S. 725 (1974), in the wake of the Court's decision today. In Americans United and Bob Jones, this Court adopted a straightforward and broad rule for determining whether…

• #19

  In so holding, the Court in effect carves out a new exception to Americans United and Bob Jones for pre-enforcement suits challenging regulations backed by tax penalties. I agree with the Court's decision to narrow Americans United and Bob Jones because the broad “effects” rule articulated in those decisions is h…