On December 1, the U.S. Supreme Court heard oral argument in CIC Services v. Internal Revenue Service, which asks whether a law that blocks preemptive lawsuits against tax collection applies to potentially unlawful regulations issued by agencies that are not taxes.
CIC Services, LLC argues citizens should be able to “challenge illegal regulations in court, without having to violate the regulation first and then raise its invalidity as a defense to an enforcement action.”
The IRS argues that the Anti-Injunction Act (AIA), a federal law that bars lawsuits to stop the assessment or collection of taxes, also applies to the regulatory penalties at question in this case because the penalties are deemed to be taxes, which means courts may only review challenges seeking a refund after paying the penalties.
The case is part of a broader debate about the procedural rights of citizens relative to the administrative state. Procedural rights are one of five pillars key to understanding the main areas of debate about the nature and scope of the administrative state. Procedural rights encompass debates about individual due process and standing before administrative agency adjudication and enforcement actions. Procedural rights also include citizen access to agency rulemaking processes, decision-making proceedings, and judicial review.
To listen to or read the oral argument and learn more about the case, click here.
Additional reading:
- Five pillars of the administrative state: Procedural rights
- Internal Revenue Service
- Administrative Procedure Act
- Congressional Review Act
- Administrative state
