Seated from left: Associate Justice Samuel Alito, Associate Justice Clarence Thomas, Chief Justice John Roberts, Associate Justice Stephen Breyer and Associate Justice Sonia Sotomayor, standing from left: Associate Justice Brett Kavanaugh, Associate Justice Elena Kagan, Associate Justice Neil Gorsuch and Associate Justice Amy Coney Barrett pose during a group photo of the Justices at the Supreme Court in Washington, DC on April 23, 2021.
The Supreme Court of the United States handed down two 9-0 opinions Monday, proving that the often-contentious bench can come together in cases involving tax law and criminal procedure.
In the first, CIC Services v. Internal Revenue Service, the Court ruled on the scope of the Anti-Injunction Act, a statute which limits lawsuits seeking to block the assessment or collection of a tax. The Court ruled that despite a federal law prohibiting lawsuits aimed at striking down taxes, not every IRS rule is considered a “tax” entitled to that kind of immunity.
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Justice Elena Kagan wrote for the 9-0 court, beginning her opinion with the observation that, “Americans have never had much enthusiasm for paying taxes.” Kagan next delivered a bit of a history lesson, explaining that over the years, taxpayers have often sought courts’ help in avoiding tax payments. When courts have sided with taxpayers, those rulings sometimes “disrupted the flow of revenue to the Federal Government,” and “threatened to ‘seriously embarrass’ tax-dependent ‘operations of the government.’” As a response, Congress enacted the Anti Injunction Act in 1867. Kagan explained, “Because of the Act, a person can typically challenge a federal tax only after he pays it, by suing for a refund.”
The tax in question in the case was not a tax in the typical sense. Rather, it was a penalty for failure to report certain types of insurance transactions that the IRS has identified as potentially abusive. CIC Services, knowing that complying with the reporting requirement would be very costly, sued to block enforcement of the reporting requirement. In the litigation, CIC Services argued that the rule requiring the reporting should be invalidated, on the grounds that the IRS issued it without holding a formal public-comment period, in violation of the Administrative Procedure Act. The government argued that CIC Services was barred from making this legal challenge by the Anti-Injunction Act.
SCOTUS found that the prohibition against lawsuits “kicks in when the target of a requested injunction is a tax obligation,” and that CIC’s lawsuit was about blocking the reporting requirement — not about blocking the penalty for noncompliance. Kagan reasoned, “CIC’s complaint asks for injunctive relief from the Notice’s reporting rules, not from any impending or eventual tax obligation”; on that basis, CIC is not barred from bringing its lawsuit. The key factor in the Court’s decision, explained Kagan, was the character of the lawsuit itself:
Simply stated, this suit attempts to get out from under the (non-tax) burdens of a (non-tax) reporting obligation. Of course, if the suit succeeds, 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 substance. The suit still targets the reporting mandates—the independently onerous reporting mandates—of the Notice itself.
Justice Sonia Sotomayor issued a separate concurrence in which she clarified, “I write separately to highlight that the answer might be different if CIC Services were a taxpayer instead of a tax advisor.”
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Unlike a tax advisor, Sotomayor explained, individual taxpayers may treat a noncompliance penalty “as a rough substitute for the tax liability she has evaded by withholding required information.” Furthermore, it would be far less onerous for a taxpayer themself to report transactional information as compared with the burden such reporting might place on a tax advisor. However, given that the case at bar related to a lawsuit raised by a tax advisor, these nuances do not change the case’s outcome.
Justice Brett Kavanaugh also wrote a concurrence, in which he characterized the Court’s opinion as having “carved out a new exception” to existing case law. “In short, as I understand the Court’s opinion today,” he wrote, “the rule going forward is that pre-enforcement suits challenging 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 collection or assessment of what the Tax Code refers to as a tax.”
In the second unanimous opinion handed down Monday, the Court ruled in Caniglia v. Strom that even the so-called “community-caretaking” exception to the Fourth Amendment does not justify a warrantless search and seizure in a private home.
Police entered the home of Edward Caniglia after Caniglia’s wife asked them to conduct a wellness check. Caniglia had brandished a gun while expressing a possible intent to inflict harm on himself. While in the home, police seized Caniglia’s firearms and ammunition.
Caniglia later sued the officers under 42 U.S. Code § 1985 for violation of his civil rights, claiming the seizure violated his Fourth Amendment rights against unreasonable searches and seizures. The lower court found in favor of police, ruling that the officers’ actions fell within a “community caretaking exception” to the warrant requirement. This decision had been based on caselaw that found that police officers often have noncriminal reasons to interact with motorists on public roadways. The Supreme Court, however, clarified in its opinion that any such exception potentially applicable on roadways does not carry over into private homes.
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Justice Clarence Thomas penned the brief four-page decision, in which he pointed out that expanding the reach of the community caretaking exception is inappropriate. The fact that “police officers perform many civic tasks in modern society was just that—a recognition that these tasks exist, and not an open-ended license to perform them anywhere,” wrote Thomas. “What is reasonable for vehicles is different from what is reasonable for homes,” he continued.
The duo of Chief Justice John Roberts and Justice Stephen Breyer joined in a single-paragraph concurrence, pointing out that “[t]he role of a peace officer includes preventing violence and restoring order, not simply rendering first aid to casualties,” and issuing a reminder that, “[a] warrant to enter a home is not required, we explained, when there is a ‘need to assist persons who are seriously injured or threatened with such injury.’”
Justice Samuel Alito delivered a lengthy solo concurrence, in which he pointed out a number of questions the majority declined to address in its opinion. Alito’s inquiries centered around the proper analysis applicable to situations in which police conduct searches and seizures while otherwise rendering some kind of aid.
[image via Erin Schaff/POOL/AFP via Getty Images]
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Elura is a columnist and trial analyst for Law & Crime. Elura is also a former civil prosecutor for NYC’s Administration for Children’s Services, the CEO of Lawyer Up, and the author of How To Talk To Your Lawyer and the Legalese-to-English series. Follow Elura on Twitter @elurananos
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