Government Brief Filed in CIC Services

The government has now filed its answering brief in CIC Services, defending the divided Sixth Circuit’s decision to dismiss an APA challenge to a reporting requirement on the ground that the lawsuit violated the Anti-Injunction Act.  See our previous reports here.

Like the taxpayer’s brief, the government focuses most of its attention on analyzing the statutory text.  Like the court of appeals, it argues that the terms of the statute literally apply because the penalties for noncompliance with the reporting requirements are defined in the Code as “taxes” and the lawsuit, if successful, would have the effect of preventing collection of those penalties if a taxpayer did not comply with the requirements.  The government distinguishes Direct Marketing Ass’n v. Brohl, 575 U.S. 1 (2015), on which the taxpayer relies, on the ground that that case did not involve requirements that were “enforced by taxes.”  The government rejects the argument that its position undermines the broad purposes of the APA, contending that the taxpayer does not need a pre-payment remedy because it would have an adequate post-payment remedy if it incurred the penalty and then filed a refund suit.  Contrary to the taxpayer’s argument, the government maintains that pursuing the post-payment remedy would not expose the taxpayer to criminal liability for “willfully” disregarding the reporting requirements.

The taxpayer’s reply brief is due October 8.  Oral argument has not yet been scheduled in the case and therefore will occur no earlier than November 30.

CIC Services – Government Answering Brief