Allen v. Regents of the University System

Mr. Justice Reed

concurring in the result.

Except for the holding .that injunction is a proper remedy to test the position of the Regents, I agree with, the opinion of the Court. As even a small breach in the general scheme of taxation gives an opening for the disorganization of the whole plan, it seems desirable to express dissent' from the conclusion that the Regents may utili2;e the summary remedy of injunction, oyer the objection of the Government, as' a means of testing the applicability of a tax law to them.

The facts set out in thé opinion of the circumstances and agreement under which the money threatened to be distrained was collected make it quite clear, it seems to me, that the Regents collected tax moneys from the spectators. Any allegation in the petition to the contrary is an erroneous conclusion of law. The Collector sought to cover this money into the Treasury. Section 502 (a) of the Revenue Act of 19261 ; § 607 of the Rev*455enue Act of 19342 and § 3224 of the Revised Statutes3 maké it clear that no injunction will lie to restrain such action.4

Section 3224 .was enacted in 1867, and until recent years was followed by the courts without deviation. Exceptions were made to protect taxpayers against collection of penalties.5 In an exceptional case of “special and extraordinary” circumstances,6 where a “valid . . . tax could by no legal possibility have been assessed against respondent . . .” this Court permitted an injunction. “Special and extraordinary” circumstances have multiplied. Here the lower court found them “demonstrated by the fact that the Regents had actually paid the tax in former years, and filed a claim for refund which was denied on the ground that they had not *456borne the burden of any part thereof.” It may be assumed, and petitioner admits, that respondents may not pay the moneys and then sue to recover them.. The fallacy underlying the opinion of the Court is the assumption that some remedy is necessary. Respondents, being merely collectors of tax moneys, are not entitled either to enjoin collection of these moneys or’to pay and sue to recover them.

There is no reason why the State of Georgia should risk or ask its agents to risk penalties to determine whether this tax is collectible. Respondents would lose nothing by collecting the tax and turning it over to the United States. If they desire to stand upon their own conception of the law and refuse to collect the tax, they must take the risks of such action. Every other taxpayer or collector of admission taxes must make the same choice.

The prompt collection of revenue is essential to good government. Summary proceedings are a matter of right.7 The Government has been sedulous to maintain a system of corrective justice.8 Any departure from the principle of “pay first and litigate later” threatens an essential safeguard to the orderly functioning of government. Here an injunction is approved when the petitioner below had little more legitimate interest in the collection of the tax than a curiosity to know whether the customers of its athletic spectacles, the real taxpayers, were constitutionally subject to such an exaction.

I am authorized to say that Mr. Justice Stone concurs in this opinion. Mr. Justice Black concurs in this opinion except in so far as it approves the reasoning of the Court on the question of state immunity from interference by federak taxation.

Sec. 502 (a). Every person receiving any payments for such admission, dues, or fees shall collect the amount of the tax imposed by section 500 or 501 from the person maldng such payments. Every club or organization having life members shall collect from suc*455members the amount of the tax imposed by section 501. Such persons shall make monthly returns under oath; in duplicate, and pay the taxes so collected to the collector of the district-'in which the principal office or place of business is located. (U. S. C., Title 26, §§.955, 956.)

Sec. 607. Enforcement of Liability .for Taxes Collected.. Whenever any person is required to collect or withhold any internal revenue tax from any other person and to pay such tax over to the United States, the amount of the tax so collected or withheld shall be held to be' a special fund in trust for the United States. The amount of such fund shall be assessed, collected, and paid in the same manner and subject to the samé provisions and limitations (including penalties) as are applicable with respect to the taxes from which such’ fund arose. (U. S. C., Title 26, § 1551.)

Sec. 3224. No suit for the purpose of restrainmg the assessment or collection of any tax shall be maintained in any court. (U. S. C., Title 26, § 1543.)

Gouge v. Hart, 250 F. 802 (W. D. Va.), appeal dismissed, 251 U. S. 542; Ralston v. Heiner, 24 F. 2d 416 (C. C. A. 3d); Calkins v. Smietanka, 240 F. 138 (N. D. Ill.); Seaman v. Guaranty Trust Co., 1 F. 2d 391 (S. D. N. Y.).

Lipke v. Lederer, 259 U. S. 557; Regal Drug Corp. v. Wardell, 260 U. S. 386.

Miller v. Nut Margarine Co., 284 U. S. 498.

Cheatham v. United States, 92 U. S. 85, 88, 89.

Compare Anniston Mfg. Co. v. Davis, 301 U. S. 337.