Court Opinion

ID: 4687474
Source: CourtListenerOpinion
Date Created: 2021-05-17 15:00:57.63549+00
Date Added: 2024-06-11T08:04:41.270693
License: Public Domain

(Slip Opinion)              OCTOBER TERM, 2020                                       1

                                       Syllabus

         NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
       being done in connection with this case, at the time the opinion is issued.
       The syllabus constitutes no part of the opinion of the Court but has been
       prepared by the Reporter of Decisions for the convenience of the reader.
       See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.

SUPREME COURT OF THE UNITED STATES

                                       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 crim-
  inal prosecution. Prior to the Notice’s first reporting deadline, CIC
  filed a complaint challenging the Notice as invalid under the Adminis-
  trative 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
  contesting a tax’s validity to pay the tax prior to filing a legal chal-
  lenge. A divided panel of the Sixth Circuit affirmed.
Held: A suit to enjoin Notice 2016–66 does not trigger the Anti-Injunc-
 tion Act even though a violation of the Notice may result in a tax pen-
 alty. Pp. 5–16.
    (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 Anti-Injunction 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
2                         CIC SERVS., LLC v. IRS

                                   Syllabus

    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
    affirmative reporting obligations, inflicting 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
    tax liability; to owe any tax, CIC would have to first violate the Notice,
    the IRS would then have to find 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 Gov-
    ernment’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 down-
    stream tax penalty. Thus, the Anti-Injunction Act imposes no bar. Pp.
    5–13.
       (b) Allowing CIC’s suit to proceed will not open the floodgates to pre-
    enforcement tax litigation. When taxpayers challenge ordinary taxes,
    assessed on earning income, or selling stock, or entering into a busi-
    ness 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
    analysis is the same for a challenge to a so-called regulatory tax—that
    is, a tax designed mainly to influence private conduct, rather than to
    raise revenue. The Anti-Injunction Act draws no distinction between
    regulatory 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 plain-
    tiff’s true objection is to a regulatory tax’s regulatory effect. By con-
    trast, 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 enjoin that requirement fall outside the Anti-Injunction Act’s
    domain. Pp. 13–15.
925 F. 3d 247, reversed and remanded.

   KAGAN, J., delivered the opinion for a unanimous Court. SOTOMAYOR,
J., and KAVANAUGH, J., filed concurring opinions.
                        Cite as: 593 U. S. ____ (2021)                                 1

                              Opinion of the Court

     NOTICE: This opinion is subject to formal revision before publication in the
     preliminary print of the United States Reports. Readers are requested to
     notify the Reporter of Decisions, Supreme Court of the United States, Wash-
     ington, D. C. 20543, of any typographical or other formal errors, in order that
     corrections may be made before the preliminary print goes to press.

SUPREME COURT OF THE UNITED STATES
                                    _________________

                                     No. 19–930
                                    _________________

   CIC SERVICES, LLC, PETITIONER v. INTERNAL
            REVENUE SERVICE, ET AL.
 ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
            APPEALS FOR THE SIXTH CIRCUIT
                                  [May 17, 2021]

  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 col-
lection of any tax.” The question here is whether the Act
prohibits a suit seeking to set aside an information-
reporting requirement that is backed by both civil tax pen-
alties 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 first income taxes—adopted to finance
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 ille-
gal, 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 dis-
rupted the flow of revenue to the Federal Government. As
one late-19th century treatise writer described the problem,
2                   CIC SERVS., LLC v. IRS

                      Opinion of the Court

“improvident employment of the writ of injunction” threat-
ened to “seriously embarrass” tax-dependent “operations of
the government.” 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 Feder-
ation 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 pri-
mer 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-
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 de-
tailed information about what the Internal Revenue Code
calls “reportable transaction[s].” §6707A(c)(1). The Code
describes those transactions simply as ones that “hav[e] a
                 Cite as: 593 U. S. ____ (2021)            3

                     Opinion of the Court

potential for tax avoidance or evasion.” Ibid. Rather than
give further specifics, the Code delegates to the Secretary
of the Treasury, acting through the IRS, the task of identi-
fying 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 com-
pany and a “captive” insurer under its control. The Code
provides the parties to such an agreement with tax ad-
vantages. The insured party can deduct its premium pay-
ments as business 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
congressional choice. But no tax benefit should accrue if
the money is not really for insurance—if the insurance con-
tract is a sham, which the affiliated companies have en-
tered into only to escape tax liability. And according to the
IRS, some micro-captive transactions are of that kind. So
the IRS issued Notice 2016–66 identifying certain micro-
captive agreements as reportable transactions. See 2016–
47 Cum. Bull. 745. That Notice compels taxpayers and ma-
terial advisors associated with such an agreement to
(among other things) “describe the transaction in sufficient
detail for the IRS to be able to understand [its] tax struc-
ture.” Id., at 748. With that information, the IRS can check
for facts—like coverage for an “implausible risk” or premi-
ums that “significantly exceed” prevailing rates—suggest-
ing that the taxpayer is not entitled to the tax benefit 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
4                   CIC SERVS., LLC v. IRS

                      Opinion of the Court

consequences. By statutory provision, all failures to supply
required information on reportable transactions, including
the micro-captive transactions specified in the Notice, are
punishable by civil monetary penalties—$50,000 for advi-
sors and up to that amount (depending on the amount of
tax gain realized) for taxpayers. See §§6707(b), 6707A(b).
In addition, an advisor may incur a daily $10,000 penalty
for failing to furnish, on request, a list of the people it ad-
vised on a reportable transaction. See §§6708(a), 6112(a).
And critically 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 find the tax appended
to the Notice’s reporting scheme than we encounter some-
thing 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 misde-
meanor, punishable by fines 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 tax-
payers participating in micro-captive transactions. It
brought this action before the Notice’s first 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 vi-
olated the Administrative Procedure Act (APA) by issuing
the Notice without notice-and-comment procedures. The
complaint also alleges that the Notice is arbitrary and ca-
pricious 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 specif-
ically, to “enjoin the enforcement of Notice 2016–66 as an
                 Cite as: 593 U. S. ____ (2021)            5

                     Opinion of the Court

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
District Court agreed. It reasoned that CIC’s suit sought
“to restrain the IRS’s assessment or collection” of the tax
penalty that could be imposed for noncompliance. 2017 WL
5015510, *4 (ED Tenn., Nov. 2, 2017). The Court of Appeals
for the Sixth Circuit affirmed in a divided decision. Accord-
ing to the majority, CIC’s suit would “restrain (indeed elim-
inate)” 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
reporting requirement is not” one to restrain a tax’s collec-
tion. Id., at 259–260. Under the majority’s view, the dis-
sent 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 peti-
tion for rehearing en banc, over a dissent from seven judges.
   We granted certiorari, 590 U. S. ___ (2020), and now re-
verse.
                            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
6                        CIC SERVS., LLC v. IRS

                           Opinion of the Court

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 con-
test 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 rev-
enue—here, by identifying sham insurance transactions.
See supra, at 3. We said as much in Direct Marketing Assn.
v. Brohl, 575 U. S. 1 (2015).1 In that case, out-of-state re-
tailers 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 re-
porting requirements is not about the “assessment” or “col-
lection” of taxes. Id., at 9–10. “Information gathering,” we
stated, is “a phase of tax administration procedure that oc-
curs before assessment [or] collection.” Id., at 8. And it did
not matter that the reporting requirements would “facili-
tate collection of taxes”—there, by identifying residents
who owed sales taxes. Id., at 12. The statute’s limit on in-
junctions, we said, is “not keyed to all activities that may
improve a State’s ability to assess and collect taxes.” Id., at

——————
  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.
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                      Opinion of the Court

11. It is instead “keyed to the acts of assessment [and] col-
lection themselves.” Id., at 12. That means a suit directed
at ordinary reporting duties can go forward, unimpeded by
the Anti-Injunction Act. On this much, even the Govern-
ment 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
information about a reportable transaction—including
those specified in the Notice—is subject to civil monetary
penalties. See supra, at 3–4. And the Code “deem[s]” those
civil penalties 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 Anti-Injunction Act”). The question thus
becomes whether that added tax penalty changes the anal-
ysis. Does its presence—as a sanction for flouting the No-
tice—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 admin-
istration. 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
Webster’s Third New International Dictionary 1847 (1976).
And 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,
8                    CIC SERVS., LLC v. IRS

                       Opinion of the Court

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 espe-
cially, 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 in-
junction is a tax obligation—or stated in the Act’s language,
when that injunction runs against the “collection or assess-
ment 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
4–5. 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 Re-
ply 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 Gov-
ernment picks up on the word “enforcement” in CIC’s re-
quest for relief: Because the Notice is enforced through tax
penalties, the Government claims, “enjoin[ing] the [No-
tice’s] enforcement,” as CIC wants, means preventing the
IRS from collecting taxes. Id., at 23, 37–38. And even put-
ting aside that word, the Government insists that there is
no real difference 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
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                      Opinion of the Court

the Notice and avoiding the tax that sanctions noncompli-
ance, the Government asserts, are “two sides of the same
coin.” Brief for Respondents 37. The Government thus sug-
gests 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 flawed; it brings no legal claim against
the separate statutory tax. And CIC’s complaint asks for
injunctive 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 particularly its request for relief, sets out this suit’s
purpose as enjoining 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
disguise. They show that in addressing Notice 2016–66,
this suit (and any resulting injunction) addresses some-
thing other than the tax penalty helping to back it up.
10                 CIC SERVS., LLC v. IRS

                     Opinion of the Court

   First, the Notice imposes affirmative reporting obliga-
tions, inflicting 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 3. And
obeying that mandate is likely to involve significant 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 Complaint
¶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 at-
tempts 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
irrelevant. 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 infor-
mation about a micro-captive transaction that the Notice
covers. (And note, for whatever it is worth, that CIC dis-
claims 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 finally, the IRS must make the—en-
tirely discretionary—decision to impose a tax penalty. See
§6707A(d). If and only if all those things occur does tax li-
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                          Opinion of the Court

ability 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
“downstream tax,” a court should not view a suit challeng-
ing the duty as aiming to “restrain the assessment or col-
lection 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 3–4. 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 action in just this form, framing its requested re-
lief in just this way. Recall what the Government would
——————
   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
plaintiff would “have an eventual downstream impact on the IRS’s col-
lection 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, ad-
ministers 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
6–7. 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.
12                       CIC SERVS., LLC v. IRS

                           Opinion of the Court

have such a party do: disobey the Notice, pay a resulting
tax penalty, and then bring a refund suit. See Brief for Re-
spondents 16–17; supra, at 5. That approach—not the Anti-
Injunction Act’s familiar pay-now-sue-later procedure, but
one with lawbreaking at the start—subjects the party to
criminal punishment.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 ne-
cessitate a pre-enforcement, rather than a refund, suit—if
there is to be a suit at all. And so too, those penalties ne-
cessitate 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 penalty would not do so. Because such an
injunction would leave both the reporting duty and the
criminal penalty untouched, the taxpayer or advisor would
still have to accede to the Notice’s demands on pain of
prison time. Small wonder 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.
  For all these reasons, the purpose of CIC’s suit is not to

——————
   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 first instance. But this
Court’s precedent precludes the Government’s effort to erase the crimi-
nal 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.
                  Cite as: 593 U. S. ____ (2021)           13

                      Opinion of the Court

“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 Notice
imposes an affirmative duty independent of the tax, entail-
ing 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, read-
ily explain why CIC’s suit targets the upstream reporting
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 13. More and more, the Government
warns, tax litigation will shift from refund actions to pre-
enforcement suits. And the IRS’s ability to assess and col-
lect 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 in-
junction it requests does not run against a tax at all. See
supra, at 9–13. The suit contests, and seeks relief from, a
separate legal mandate; the tax appears on the scene—as
criminal penalties do too—only to sanction that mandate’s
violation. Or as Judge Nalbandian put the point below:
14                  CIC SERVS., LLC v. IRS

                      Opinion of the Court

“[T]his is not a dispute over taxes.” 925 F. 3d, at 259; see
supra, at 5. By contrast, the kind of case the Government
invokes in making its floodgates claim is a conflict over
taxes, whether on earning income, or selling stock, or enter-
ing into a business transaction. In such a case, the legal
rule at issue is a tax provision. The tax does not backstop
the violation of another law that independently prohibits or
commands an action. Instead, the tax imposes a cost on
perfectly legal behavior. So there is no target for an injunc-
tion 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
“preemptive[ ]” suit to foreclose tax liability. Brief for Re-
spondents 13. And it does so always—whatever the tax-
payer’s subjective reason for contesting the tax at issue. If
the dispute 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 influence
private conduct, rather than to raise revenue. This Court
has long since “abandoned the view that bright-line distinc-
tions exist between regulatory and revenue-raising taxes.”
Bob Jones, 416 U. S., at 743, n. 17; see id., at 741, n. 12;
Sonzinsky 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 special 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 la-
bor. Some 50 years later, the Court in Bob Jones and Amer-
icans United similarly held that the Act barred pre-
enforcement suits challenging IRS decisions to revoke the
                  Cite as: 593 U. S. ____ (2021)            15

                      Opinion of the Court

tax-exempt status of entities that had engaged in, respec-
tively, discriminatory conduct and lobbying activity—con-
duct 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, irrelevant that Bob Jones University ob-
jected to the IRS’s “attempt to regulate the admissions pol-
icies of private universities.” 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 en-
joining the IRS’s assessment and collection of taxes—of
whatever kind.
   What sets this suit apart is that it no more targets a reg-
ulatory 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 noncom-
pliance with the reporting obligation. Had Congress, or the
IRS acting through a delegation, imposed a tax on micro-
captive transactions themselves—and had CIC then
brought a pre-enforcement suit to prevent the IRS from ap-
plying 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 re-
sponse outside the Anti-Injunction Act’s domain.
16                 CIC SERVS., LLC v. IRS

                     Opinion of the Court

                             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 Anti-Injunction Act. We reverse
the judgment below and remand the case for further pro-
ceedings consistent with this opinion.

                                            It is so ordered.
                  Cite as: 593 U. S. ____ (2021)            1

                   SOTOMAYOR, J., concurring

SUPREME COURT OF THE UNITED STATES
                          _________________

                           No. 19–930
                          _________________

   CIC SERVICES, LLC, PETITIONER v. INTERNAL
            REVENUE SERVICE, ET AL.
 ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
            APPEALS FOR THE SIXTH CIRCUIT
                         [May 17, 2021]

   JUSTICE SOTOMAYOR, concurring.
   I concur because I agree that CIC Services, a material ad-
visor 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 bur-
dens imposed by Notice 2016–66 (Notice). The three factors
identified 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
Services’ 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 penal-
ties. See ante, at 9–13.
   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 finances 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
2                   CIC SERVS., LLC v. IRS

                   SOTOMAYOR, J., concurring

substitute for the tax liability she has evaded by withhold-
ing required information. Moreover, compared with their
tax advisors, taxpayers may incur less expense in collecting
and reporting their own financial information. Such infor-
mation, 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 pur-
pose 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 require-
ments 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-specific inquiry into
“the relief the suit requests” and the “aspects of the regula-
tory scheme” at issue. Ante, at 7, 9. On that understanding,
I concur.
                  Cite as: 593 U. S. ____ (2021)            1

                   KAVANAUGH, J., concurring

SUPREME COURT OF THE UNITED STATES
                          _________________

                           No. 19–930
                          _________________

   CIC SERVICES, LLC, PETITIONER v. INTERNAL
            REVENUE SERVICE, ET AL.
 ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
            APPEALS FOR THE SIXTH CIRCUIT
                         [May 17, 2021]

   JUSTICE KAVANAUGH, concurring.
   I join the Court’s opinion in full. I write separately to
underscore what remains (and does not remain) of Alexan-
der 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 “neces-
sarily 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-enforce-
ment suit would have the effect of preventing the assess-
ment or 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 specifically, penalties that the Tax Code
labels as “taxes” for purposes of the Anti-Injunction Act.
2                   CIC SERVS., LLC v. IRS

                   KAVANAUGH, J., concurring

See 26 U. S. C. §6671(a). Because invalidating the regula-
tion at issue would “necessarily preclude” the collection of
tax penalties (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 Amer-
icans 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 reg-
ulatory 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-enforce-
ment 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 is best read as directing courts to look at the stated ob-
ject of a suit rather than the suit’s downstream effects. See
ante, at 7–8. And for that reason, as the Court explains, the
text of the Anti-Injunction Act is best read as distinguishing
(i) pre-enforcement suits challenging the regulatory compo-
nent of a regulatory tax, which remain prohibited because
                  Cite as: 593 U. S. ____ (2021)             3

                   KAVANAUGH, J., concurring

the requested relief necessarily runs against the assess-
ment 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 challeng-
ing 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 collec-
tion or assessment of what the Tax Code refers to as a tax.
   With those observations, I join the Court’s opinion in full.