RECOMMENDED FOR PUBLICATION Pursuant to Sixth Circuit I.O.P. 32.1(b) File Name: 22a0041p.06 UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT ┐ MANN CONSTRUCTION, INC.; BROOK WOOD; │ KIMBERLY WOOD; LEE COUGHLIN; DEBBIE COUGHLIN, │ Plaintiffs-Appellants, │ No. 21-1500 > │ v. │ │ UNITED STATES OF AMERICA, │ Defendant-Appellee. │ │ ┘ Appeal from the United States District Court for the Eastern District of Michigan at Bay City. No. 1:20-cv-11307—Thomas L. Ludington, District Judge. Argued: December 9, 2021 Decided and Filed: March 3, 2022 Before: SUTTON, Chief Judge; STRANCH and BUSH, Circuit Judges. _________________ COUNSEL ARGUED: Samuel Joseph Lauricia III, WESTON HURD LLP, Cleveland, Ohio, for Appellants. Ellen Page DelSole, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee. ON BRIEF: Samuel Joseph Lauricia III, Walter A. Lucas, Matthew C. Miller, Randy L. Taylor, WESTON HURD LLP, Cleveland, Ohio, for Appellants. Ellen Page DelSole, Francesca Ugolini, Geoffrey J. Klimas, UNITED STATES DEPARTMENT OF JUSTICE, Washington, D.C., for Appellee. No. 21-1500 Mann Constr., Inc. v. United States Page 2 _________________ OPINION _________________ SUTTON, Chief Judge. Several taxpayers complain about the Internal Revenue Service’s enforcement of an administrative regulation that requires them to report transactions involving cash-value life insurance policies connected to employee-benefit plans. The taxpayers claim that the IRS failed to meet a reporting requirement of its own by skipping the notice-and- comment process before promulgating this legislative rule. If individuals “must turn square corners when they deal with the government,” the taxpayers insist, “it cannot be too much to expect the government to turn square corners when it deals with them.” Niz-Chavez v. Garland, 141 S. Ct. 1474, 1486 (2021). We agree with the taxpayers and reverse the district court’s contrary decision. I. In collecting federal taxes, the Internal Revenue Service uses a “system of self- reporting.” United States v. Bisceglia, 420 U.S. 141, 145 (1975). Much as there may not be “a patriotic duty to increase one’s taxes” under that system, Helvering v. Gregory, 69 F.2d 809, 810 (2d Cir. 1934), there is a duty to report all of the financial information that Congress requires. Congress delegated power to the Secretary of the Treasury, who, through the IRS, requires taxpayers to submit information needed to assess and collect taxes. See 26 U.S.C. § 6011; see also id. § 7701(a)(11)(B). This information-gathering imperative allows the government to ensure compliance with tax provisions and ferret out improper tax avoidance. In 2004, Congress added 26 U.S.C. § 6707A to the IRS’s arsenal of tools for identifying tax avoidance schemes. Designed to shed light on potentially illegal tax shelters, § 6707A permits the IRS to penalize the failure to provide information concerning “reportable” and “listed” transactions. A “reportable transaction” is one that has the “potential for [illegal] tax avoidance or evasion.” Id. § 6707A(c)(1). A “listed transaction” is one that “is the same as, or substantially No. 21-1500 Mann Constr., Inc. v. United States Page 3 similar to, a transaction” that the IRS has identified as a “tax avoidance transaction.” Id. § …
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