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Our Federal Tax Group examines a U.S. Supreme Court ruling that could give taxpayers greater leeway to challenge IRS regulatory schemes before the IRS takes enforcement action.
CIC Services v. IRS narrows the reach of the Anti-Injunction Act
Three features of Notice 2016-66 helped the Court overturn lower courts’ rulings in favor of the IRS
The IRS’s rule-making process now open to more Administrative Procedure Act challenges
Taxpayers and those subject to IRS enforcement are often stymied in their efforts to prospectively challenge IRS regulatory actions. The Anti-Injunction Act (AIA), originally enacted in 1867, generally restricts any suit “for the purpose of restraining the assessment or collection of any tax.” Case law has historically applied this broad prohibition to effectively restrict legal challenges to a federal tax unless the taxpayer pays the tax and sues the government for a refund.
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