U.S. Supreme Court Decision in CIC Services v. IRS Allows Small Businesses To Challenge Illegal Tax Rules

Date: May 17, 2021

WASHINGTON, D.C. (May 17, 2021) – NFIB commends the United States Supreme Court decision in CIC Services v. Internal Revenue Service today which clarified that the Anti-Injunction Act’s scope is limited and permits pre-enforcement judicial review of tax rules. This is a win for small business owners who can now challenge tax regulations they believe are legally suspect in court before they are faced with a tax penalty.

“Small business owners have the right to challenge the Internal Revenue Service in court before paying a penalty and today’s decision from the Supreme Court confirms that,” said Karen Harned, Executive Director of the NFIB Small Business Legal Center. “Small business employers know that ever-changing tax laws cause disruptions to their daily business operations. This decision gives some power back to owners and their right to challenge the IRS on questionable regulations before paying a dime.”

NFIB filed an amicus brief in CIC Services v. Internal Revenue Services, which primarily concerns whether taxpayers can challenge IRS regulations before they take effect. The case questioned whether the Anti-Injunction Act’s bar on lawsuits for the purpose of restraining the assessment or collection of taxes also barred challenges to unlawful regulatory mandates issued by administrative agencies.

In the brief, NFIB’s National Small Business Poll on Regulations shows that tax rules cause the greatest difficulties of any type of regulation for small businesses.

The NFIB Small Business Legal Center protects the rights of small business owners in the nation’s courts. NFIB is currently active in more than 40 cases in federal and state courts across the country and in the U.S. Supreme Court.

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