Mr. Justice Blackmun,
dissenting.
Finding myself in solitary dissent in this “tax” case, I am somewhat diffident about expressing views contrary to those the Court apparently has reached so easily. I do so only because I am disturbingly aware of the overwhelming power of the Internal Revenue Service. This power is such that its mere exercise often freezes tax status so as to endanger. the existence of philan-° thropic organizations and the public benefits they secure, merely because the path to judicial review is so discouragingly -long and expensive. I write primarily, therefore, to express what I feel is a. needed word of caution about governmental power where the means to challenge that power are unfavorable and unsatisfactory at best. •
I
“Americans United” Inc. (AU) is a District of Columbia nonprofit educational corporation organized in 1948. For almost 18 years AU was formally recognized by the Service as. exempt from federal income tax under § 501 (c) (3) of the Internal Revenue Code of 1954, 26 IT. S. C. §501 (c)(3), and its predecessor, § 101 (6) of the Internal Revenue Code of 1939.
On April 25, 1968, however, the Commissioner of Internal Revenue revoked AU’s letter-ruling exemption on the ground that the organization -no longer met the requirements of § 501 (c) (3) and, instead, was an “action” organization, within the definition of Treasury Regulations §§ 1.501 (c)(3)-! (c)(3)(i) and (iv)^, in that a substantial part of its activities was devoted to the pursuit of objectives to influence legislation App. 7-10. The loss of its § 501- (c) (3) status, however; did not result in AU’s becoming subject to federal income tax. This was because AU qualified as a civic league or other prgahization to which § 501 (c) (4) has -application.
The result, nevertheless, was distinctly adverse to AU in two respects. A contribution to the organization no longer was deductible-by the donor under §§170(a)(l) and (c)(2)(D) of the 1954 Code, 26 U. S.. C. §§170 (a)(1) and (c)(2)(D), the latter of which closely parallels but is not identical with § 501 (c) (3). As a matter of much less concern, AU also became subject to federal unemployment tax under § 3301 of the Code, 26 U. S. C. § 3301, for exemption therefrom for § 501 organizátions is limited to those that qualify under §-501 (c)(3). § 3306 (c) (8) of the 1954 Code,26 U. S. C. § 3306 (c)(8). AU has paid federal unemployment taxes, and has stipulated that it will continue to do so.
As a result of the revocation of its § 501 (c)(3) status, contributions by donors to AU declined sharply so that for the first time the organization was not able to raise enough funds to cover its expenses. AU and two of its benefactors then sought relief by the present suit. They have alleged that the substantiality test of §§ 501 (c) (3) and 170.(c)(2)(D) created an unconstitutional disparity between large and small organizations; that the Commissioner revoked AUs exemption ruling punitively; that it was unconstitutional to. penalize First Amendment activity in this manner; and that §501 (c) (3)’s “substantial” and “propaganda” standards were unconstitutionally vague. AU sought reinstatement on the IBS Cumulative List of Organizations so that contributions to it would be deductible by donors under §§ 170 (a)(1) and (c)(2)(D).
II
The Anti-Injunction Act, § 7421 (a) of the Code, 26 U. S. C. § 7421 (a), reads in part:
,“[N]o suit for the purpose of. restraining the assessment or collection of any tax shall be maintained in any court by any person, whether or not such person is the person against whom such tax was assessed.”
In considering § 7421 (a), a two-step analysis is necessary: (1) When does the statute apply? (2) When it is applicable, under what circumstances is an exception permitted? It seems to me that the Court overlooks the first question in order to apply mechanically the criteria for an exception to the application of § 7421 (a).
The threshold question, obviously, is whether the present litigation is a “suit for the purpose of restraining” any tax. It is. conceded that AU has no income tax liability. and will have none regardless of the outcome of this litigation. . AU has paid,, and will continue to pay, federal unemployment taxes. Its Assumption of FICA tax liability is frozen and cannot now be terminated.
It is in the context of this fixed and certain status as to all these federal taxes — income, unemployment, FICA — that “the purpose” of the present litigation, within the meaning of § 7421 (a), must be ascertained. AU. asserts that the purpose is to determine its charitable status so far as benefactors are concerned. Indeed, one surely must concede that, within the literal import of the statute’s words, the suit is not one “for the purpose of restraining . . . any tax.” It is, instead, a suit to assure the continuance of contributions utilized to sus- tain AU’s operations.
I would not attribute to Congress, however, so simplistic a prohibition in § 7421 (a) as to enable an organization to circumvent the statutory barrier by a subjective protestation of the purpose for which an injunction is sought. In order to ascertain legislative intent, it is nepessary to consider effect as well as purpose and thús to bring objective criteriá into the analysis. See Recent Development, 73 Col. L. Rev. 1502, 1508-1510 (1973).
In Bob Jones University v. Connolly, 472 F. 2d 903, 906 (1973), the Fourth Circuit concluded that when the withdrawal of an exemption “would ultimately result in potentially greater tax revenues,” thé obvious purpose of a suit to enjoin the withdrawal is. to prevent the assessment of tax, and § 7421 (a) would be applicable. Thus, “purpose” was equated with ultimate tax effect. Crenshaw County Private School Foundation v. Connally, 474 F. 2d 1185, 1188 (CA5 1973), pet. for cert. pending No. 73-170, has a similar focus. In the present ease the Court of Appeals took a different approach:
“The restraint upon assessment and collection is. at best a collateral effect of the action, the primary design not being to remove the burden of taxation from those presently contributing but rathu to avoid the. disposition .of contributed funds away from the corporation.” 155 U. S. App. D. C. 284, 293-294, 477 F. 2d 1169, 1178-1179.
In. this view, applicability of the statute depends on the direct effect the relief sought would have on the plaintiff and not on--the system as a whole.
■ As has been noted, the result of the injunction sought here would not directly inhibit the collection of tax from AU. It isalso highly speculative what collateral effect, if any at all, the suit could possibly have on the federal revenue. If the assertion that AU’s contributions have dried up is to. be .accepted, as I suspect it must be, I would presume that its erstwhile contributors have found other objects for their bounty, that is, other organizations whose names remain on the Service’s vitally important Cumulative List. When nothing more than possible collateral effect on the revenues is involved, the Court’s wide-ranging test of applicability of •§ 7421 (a), announced today, is, for me, too attenuated and too removed to be encompassed within the intendment of the statute’s phrase, “for the purpose of restraining the assessment or collection of any tax.”
In Enochs v. Williams Packing & Navigation Co., 370 U. S. 1 (1962), this Court observed that the object of §7421 (a) “is to withdraw jurisdiction from the . . . courts to entertain suits seeking injunctions prohibiting the collection of federal taxes,” and “to permit the United States to assess and collect taxes allegedto be due without judicial intervention, and to require that the legal right to the disputed sums be determined in a suit for refund.” Id., at 5 and 7. There undoubtedly, is appropriate concern about the underlying danger “that a multitude of- spurious suits, or even of suits withj^ossible merit, would so interrupt the/free flow oi> reveñues as-to jeopardize the Nation’s fiscal stability. See, e. g., State Railroad Tax Cases, 92 U. S. 575, 613-614 (1876); Cheatham v. United States, 92 U. S. 85, 89 (1876). Certainly, precollection- suits could threaten planning and budgeting. But I do not -perceive how the injunction desired in this case interferes with the area of concern that is the subject of § 7421 (a). Any po tential ■ increase in revenues because donors no longer may contribute to AU and thereby obtain a § 170 (a) (1)-deduction is, at best, only minor and speculative and is neither significant, nor controlling. I, therefore, would accept “direct effect on the plaintiff” as a component to be considered in the ascertainment of the true “purpose” of the suit, within the meaning and reach of § 7421.(a).
I do not wish to indicate disapproval of Williams Packing. There a taxpayer sought to enjoin the collection of faxes. As the basis for equitable jurisdiction, it asserted that it would.be thrown into bankruptcy if it were required to pay the taxes it challenged. The Court carefully noted that, there may. well be situations where “the central purpose of the Act is inapplicable and . . . the attempted collection may be enjoined.” 370 U. S., at 7. To be sure, the Court narrowly confined exceptions to § 7421 (a) to instances where the plaintiff would suffer irreparable injury and where it was “clear that under no circumstances could the Government ultimately prevail.” Ibid. If, however, this test is met, then the “manifest purpose” of the statute — to permit the collection of taxes without judicial intervention^ — is “inapplicable.” The Court thus made it .clear that there was an element, in addition to the traditional equity considerations, previously spelled out in Miller v. Standard Nut Margarine Co., 284 U. S. 498 (1932), that must be presr ent in order to avoid the proscription of the Anti-Injunction Act.
Williams Packing, of course, on its facts, is clearly’ distinguishable from this case. There the purpose of the suit was directly to restrain the collection of social security and unemployment taxes allegedly past due from that taxpayer. Here the avowed purpose is not to restrain, tax collection but to assure ATI’s restoration to the Cumulative List. In Williams Packing it was the incidence of taxation that was challenged and the ir reparable injury of prospective payment of the tax was claimed as the equitable basis for the injunction. Nothing remotely resembling that is present here. To read Williams Packing as broadly-as the Court does today is to make § 7421 (a) more restrictive than the Court in Williams Packing or Congress intended. The result is that § 7421 (a) becomes an absolute bar to any and . all injunctions, irrespective of tax liability, of purpose or effect of the suit, or of the character of the Service’s action.
There is a further consideration. Arguably, where the challenged governmental action is not one intended to produce revenue but, rather, is one to accomplish a broad-based policy objective through the medium of fedéral taxation, the application of § 7421 (a) is inappropriate. Obviously, § 501 (c)(3) -is not designed tb raise money. Its purpose, rather, is to. assure the existence of truly-philanthropic organizations and the continuation of the important public benefits they bestow.
Another very1important factor deserving.consideration in this context is the hazard of vesting in the Commissioner virtualplenipotentiary power-over philanthropic organizations. Although there can be little question that .the Commissioner, under § 7805 (a) o.f the. Code, 26 U. S. C. 17805 (a), is properly vested with,broad powers to “prescribe all needful rules and regulations for the enforcement” of the tax laws, there is nothing, in .the Code that suggests that he must be fully insulated! from challenge when effectuating social policy.
- AU has charged unconstitutional treatment pursuant to an unconstitutional provision. These «re claims peculiarly within the province, of courts and not of the Executive’s administrative officers. : The Court’s opinion makes clear that a claim of this kind is now precluded from judicial determination until such time as the Court concludes that the Government could not ultimately prevail on the merits. Unless and until that conclusion is reached, the philanthropic organization is at -the mercy of the Commissioner for the period of time — usually a substantial one — it takes for a claim to be filed and to work its way through the adjudicative process in the guise of a refund suit with its myriad pitfalls. And even this route is possible only if the organization has a tax that has been paid. See Part III, infra.
The Court in Bob. Jones University, ante, at 729-730, acknowledges that “appearance on the Cumulative List is a prerequisite to successful fund raising for most charitable organizations.” The program of exemption by letter.ruling, therefore; is tantamount to a licensing procedure. If the Commissioner’s authority were limited by a clear statutory definition of § 501 (c)(3)’s require-: ment of “no substantial part/’ or by an objective definition of what is “charitable,” there would be less concern about possible. administrative abuse. But where the philanthropic organization is concerned, there appears to be little to circumscribe the almost unfettered power of the Commissioner. This may be very well so long as one subscribes to the particular brand of social policy the Commissioner happens to be advocating at the time (a social policy the. merits of which I make nio attempt tQ evaluate), but application of our tax laws should not operate in so fickle a fashion. Surely, social policy in the first instance is a matter for legislative concern. To the extent these determinations are reposed in the authority of the Internal Revenue Service, they should have the system of checks and balances provided- by judicial review before an organization that, for years has been favored with an exemption ruling is imperiled by an allegedly unconstitutional change of- direction on the part of the Service.
When ah organization which has appeared on- the Cumulative List seeks to enjoin what it claims is its illegal removal from that List and has no direct income tax liability or a de minimis collateral liability, the injunction, in my view, should not be within the prohibition of §7421 (a).
111
Concluding, as I have, that § 7421 (a) is not a bar to an injunction by AU, the traditional equitable considera tions of irreparable injury and adequate alternative remedy must determine whether injunctive relief is appropriate. This is an inquiry independent of the question whether the Anti-Injunction Act applies, and is no different from the inquiry as to when injunctive relief is appropriate outside the tax field. See, for example, Public Service Comm’n v. Wycoff Co., 344 U. S. 237, 240-241 (1952); Beacon Theatres, Inc. v. Westover, 359 U. S. 500, 506-507 (1959). AU makes a vigorous and pressing- claim that it is and will be irreparably injured by the loss of contributions since donors no longer receive an income tax deduction, and that this loss is completely unrecoverable even were AU ultimately to prevail on the merits. The Court in its opinion, ante, at 761-762, seems to accept the fact of irreparable injury here, just as the Court of Appeals recognized its presence as virtually inevitable. 155 U. S. App. D. C., at 292, 477 F. 2d, at 1177. Even where it has been found that § 7421 (a) bars a suit, it has been recognized that revocation of exempt status is an irreparable injury that otherwise satisfies the condition for the granting of injunctive relief. See, for example, Bob Jones University v. Connally, 472 F. 2d, at 906.
In addition to irreparable injury, the plaintiff must show that he. has, no adequate remedy at law. Wilson v. Shaw, 204 U. S. 24, 31 (1907). The Commissioner suggests that a plaintiff organization usually has three alternative remedies, any one of which is adequate: an income tax refund suit, a federal unemployment tax or FICA tax refund suit, and an accommodation suit by a selected donor in the form of testing- his claim to a charitable deduction_under §§170 (a)(1) and (c)(2)(D).
In- AU’s case the Commissioner, of course, cannot and does not contend that the income tax refund suit alternative is available. AU received § 501 (c) (4) status, upon revocation of its § 501 (c) (3) exemption, ánd it is not subject to federal income tax so long as it retains § 501 (c)(4) status. Whenever that alternative is available, .as in Bob Jones University, ante, p. 725, such availability not only indicates the existence of a remedy at law but that the direct effect of an injunction would be to restrain the collection of taxes.
■ An FICA tax refund suit is not available as an alternative to AU, since AU has made • its election under §3121 (k)(l)(A) and that election is now irrevocable. See n. 3, supra. Although AU conceivably might bring a refund suit for federal unemployment taxes, the real question, and a substantial one, is whether that remedy is adequate for AU and is an effective route for the determination of the issues involved. •
A suit for refund of federal unemployment tax, authorized under § 7422 of the Code, 26 U. S. C. § 7422, and with a period of limitations imposed by. § 6532 (a), is directly geared to a determination of the technical aspects of FUTA liability and not to the larger constitutional issues. At most, the refund suit is an artificial vehicle to adjudicate questions other than entitlement to refund; its focus is on liability and not on. eligibility under §§ 170 (a)(1) and (c)(2)(D). It is most doubtful, also, that potential contributors would regard a favorable outcome in such, a suit as possessing the reliability of a favorable letter ruling. Assuming that.AU could litigate its constitutional claims in an FUTA.refund suit, see Christian Echoes National Ministry, Inc. v. United States, 470 F. 2d 849 (CA10 1972), cert. denied, 414 U. S. 864 (1973), there are other obstacles in its path.
The suit, for refund may not be maintained until a claim for refund has been filed. § 7422. The federal unemployment tax is imposed on an annual basis; thus, no refund can be claimed until the expiration of the year for which the tax is paid. Section 6532 (a)(1), as usual, precludes the suit until the claim is denied or six months have passed from the date of filing. Once suit is instituted, the Government has at least 60 days to answer the complaint. Under optimum conditions and with cooperation, the minimum period of time required to achieve the objective through the refund suit is one to two years from: the timé of revocation. This is the delay if the organization wins and no Government appeal is taken. If an appeal follows, the delay in ultimate resolution drags on. E. g., Christian Echoes, supra, where the ruling was revoked in 1966 and final judicial review wqs concluded only in 1973. While this is perhaps to be expected, and must be endured, in an ordinary tax refund suit, a delay of this magnitude defeats the adequacy of remedy when a philanthropic organization’s very existence is at stake.
There are still other hazards. When small sums are at issue, as with AU’s FUTA liability, the Government inadvertently or intentionally may concede the refund. This is not unlikely, for sound administration may not warrant the time and expense necessary to contest a claim of small amount when vital issues and conceivably profound precedents are at stake. Church of Scientology v. United States, 485 F. 2d 313 (CA9 1973), illustrates the Government’s effort to win dismissal of a case when a refund had been made. See also Mitchell v. Riddell, 402 F. 2d 842 (CA9 1968), appeal dismissed and cert. denied, 394 U. S. 456 (1969). Theie is little doubt that the Commissioner possesses the authority to make the refund and moot- the suit if he chooses not to litigate the underlying issues. Although I agree with the Commissioner that to do so in a situation like that in the instant case -would amount to bad faith, Brief for Petitioner 35 n. 25, it would be almost impossible for an organization to‘prove bad faith where, as here, the sum at issue is minimal and inadvertence or sound administration could be a valid reason for the refund.
Additionally, there is a substantial question whether an organization’s eventual victory in a refund suit would accomplish its goal.. The Commissioner has asserted that “normal practice is to issue a favorable ruling upon the application of an organization which has prevailed in a court suit,” Reply Brief for Petitioner 34 — 35, n. 31. Still, the IRS Exempt Organizations Handbook states:
.“An organization which obtains a Tax Court or Federal coürt decision holding it to be exempt must file an exemption application and establish its right to exemption before the Service will recognize its exemption for years subsequent to those involved in the court decision.” Department of Treasury, Internal Revenue Manual, Part XI, c. (11) 671, ¶ 270.
Whatever the internal ..practice may be, the published procedures cast serious doubt on the adequacy of the refund suit to resolve the organization’s- urgent problem. The revenue ruling has prospective application, whereas a court determination operates retrospectively, to the extent the pleadings and proof and the applicable statute of limitations permit. Thus, the scope of relief available in a refund suit is also uncertain. The orga nization is then faced with the- dilemma of choosing between a so-called pre-assessment suit, which the Court says it cannot bring, and a refund suit that decides little more than the correctness of a particular year’s tax liability (which in this case has been paid and is of little or no concern).
.The staged suit by a “friendly” donor is the Commis•sioner’s other suggestion. The donor’s suit suffers the same time problems. The organization is off . the Cumulative List at least until the donor establishes his entitlement to a §§.170 (a)(1) and. (c) (2) (D) deduction. This suit also may be mooted. Moreover, litigation by the accommodating donor does not permit the organization to assert its rights and interests. Could the donor make the First Amendment and equal protection claims- that .AU seeks to have determined? Not only must AIT rely on a contributor to raise issues for. it, but it must find á donor who is-willing both to contribute and to undertake the task of litigation. This strains largesse to the extreme, particularly since the suit will subject the donor to routine .full audit of his own return.
L conclude that neither course is an adequate remedy for an irreparably harmed organization to vindicate its .claims. ■ Thus, equitable relief in the form of an injunction is not inappropriate.
IY
The last issue is whether the amended complaint presented a substantial constitutional question om the merits justifying the convening of a three-judge court under 28 U. .S. C. § 2282. The test was enunciated in Ex parte Poresky, 290 U. S. 30, 32 (1933), and restated in Goosby v. Osser, 409 U. S. 512, 518 (1973), and in Hagans v. Lavine, 415 U. S. 528, 542-543 (1974), The Court of Appeals in the present case said that “the possibility of success is- not so certain as to merit the Enochs exception with respect to § 7421 (a), yet not so frivolous or foreclosed as to merit denial of the § 2282 motion.” 155 U. S. App. D. C., at 298, 477 F. 2d, at 1183. Fd0/ not differ with that determination.
I, of course, imply no opinion on the merits of the underlying controversy.
. Since I cannot join the Court’s reversal of the Court of Appeals’ judgment, I respectfully dissent.
AU’s exemption ruling, under § 101 (6) of the 1939 Code, was issued July 3, 1950. Section 501 reads in pertinent part as follows:
Ҥ 501. Exemption from tax-, oh corporations, certain trusts, etc.
“(a) Exemption from taxation.
“An organization, described in subsection (c) . . . shall be exempt from taxation under this subtitle unless such exemption is denied under section 502 or 503.
“(c) List of exempt organizations.
“The following organizations are"*referred to in subjection (a):
“(3)-.Corporations, and any community chest,’ fund, or foundation, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes, or for the prevention of cruelty to children or animals, no part of the net earnings of which inures to the benefit of any private shareholder or individual, no substantial part of. the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation, and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of any candidate for public office.”
Section 501 (c)(4) relates to:
“(4) Civic leagues or organizations not organized for profit but operated éxelusively .for.-the promotion of social welfare, or local associations of employees, thé membership of which is limited to the- employees of a designated person -or persons in a particular municipality, and the net earnings of which are devoted exclusively to charitable, educational, or recreational purposes.”
Although, under § 3121 (b) (8) (B) of the 1954 Code, 26 U. S. C. §3121 (b)(8)(B), AU was not required to pay tax imposed by the Federal Insurance Contributions Act so long as it was exempt under §501 (c)(3), it had elected to do so, as was its privilege under §3121 (k)(l)(A),-26 U. S. C. §3121 (k)(l)(A). Termination .of this accepted responsibility for tax requires two • years’ advance .written notice- and cannot be effected at all after an organization .has been subjected to the-tax eight years or more. §3121 (k) (1) (D), 26 U. S. C. §3121 (k)(1)(D). AU has been so taxed for more than eight years. Thus,, it is u.nableto terminate its responsi-. bility for tax under the FICA even- if it were to continue as a. § 501 (c) (3) organization. •
AU paid-$981.13 in federal unemployment tax for 1969; $1,052.60 for 1970; $889.09 for 1971; and • $1,131.36 fori 1972. Brief for Petitioner 4 n. .2,
The amended complaint requested both declaratory and injunc-tive relief. The latter, however, would be .fully adequate and a declaratory judgment, as such, would not be needed. Accordingly, I am concerned only, with the applicability of the Anti-Injunction. Act, § 7421 (a) of the Code, 26 U. S. C. § 7421 (a).
The Commissioner has asserted that the Declaratory Judgment Act, 28 U. S. C. §§ 2201-2202, also provides a jurisdictional barrier to the suit because its general applicability i.s limited by the phrase, “except with respect to Federal taxes.” While not reaching the question, I would agree with the Court’s observation in the companion case, Bob Jones University v. Simon, ante, at 732-733, n. 7, that questions exist as to the scope of § 2201 and as to whether it is coterminous with § 7421 (a).
The Commissioner also asserts that the doctrine of sovereign immunity bars the present action; I do not agree. The suit, as the Court of Appeals noted, 155 U. S. App. D. C. 284, 295, 477 F. 2d 1169, 1180, falls within the immunity doctrine’s exceptions enunciated in Dugan v. Rank, 372 U. S. 609, 621-622 (1963): “(1) action by officers beyond their statutory powers-and (2) even though within the scope of their authority, the powers themselves .or the manner in which they are exercised are constitutionally void.” Here, the claim, is made that § 501 (c)(3) is unconstitutional, and that the Commissioner administers the section in an unconstitutional manner.
In Green v. Connolly, 330 F. Supp. 1150 (DC 1971), the court granted relief • against Treasury officials comparable to that sought here. Inasmuch-as the defense of sovereign immunity is. jurisdictional, United States v. Sherwood, 312 U. S. 584, 586 (1941), this Court’s summary, affirmance of the Green case sub nom. Coit v. Green, 404 U. S. 997 (1971), affords pertinent precedent.
Some courts have endorsed this approach. In McGlotten v. Connolly, 338 F. Supp. 448 (DC 1972), a suit to enjoin, among "other things, the continuation of tax exempt status of organizations that excluded nonwhites from membership, Chief Judge Bazelon, in writing for a three-judge District Court, stated:
“Plaintiff’s action has nothing to do with the collection orassessment, of taxes. He does not contest the amount of his own tax, nor does he seek to limit the amount of tax revenue collectible by ■the United States. ... In the present case, the central purpose [of the statute] is clearly inapplicable.” Id., at 453-454 (footnotes omitted).
See also Green v. Connolly, 330 F. Supp. 1150 (DC), aff’d per curiam sub nom. Coit v. Green, 404 U. S. 997 (1971), where the three-judge court did not mention § 7421 (a) specifically but permitted the suit and granted. relief; Bob Jones University v. Connolly, 472 F.2d 903, 907-908 (CA4 1973) (dissenting opinion). And see the opinion of the Court, of Appeals in the present ease. 155 U. S. App. D. C., at 293-294, 477 F. 2d, at 1178-1179.
The purpose of the IRS action of itself is not controlling. The Court has found that “taxes” in the nature of a penalty were not within the meaning of. §7421 (a), Hill v. Wallace, 259 U. S. 44 (1922); Lipke v. Lederer, 259 U. S. 557 (1922), and-has rejected, as well, the contention that an injunction could issue against a. regulatory tax as opposed to a revenue measure. Sonzinsky v. United States, 300 U. S. 506 (1937). The Court relies on Bailey v. George, 259 U. S. 16 (1922), for the principle that , even the collection of an unconstitutional tax cannot be enjoined. All these situations, however, have a factor in common with Williams Packing tha; is absent from the pfesent suit: AU does not seek to restrain the Government’s act ofrollecting any tax that it owes.
Commissioner Alexander spoke to this effect in remarks to the American Society • of Association Executives in New Orleans August 29, 1973:
“The IRS recognizes that the exempt organization provisions of the law must be interpreted and administered in light of their special purpose and their place in the tax law.. .Their purpose is, «oí to raise revenue. Rather, they are designed-to act as a guardian. They .insure that exempt organization assets will be put .to the approved uses contemplated in the law.. Their application callsv for an extraordinary degree-of care and-judgment.” BNA Daily Tax Report, Aug. 30, 1973, p. J-1.
The value of philanthropic organizations- must- be balanced against . the revenue-raising objectives of the tax laws. Some of the factors to be weighed iH this balance are reflected in the 1965. Treasury Department Report on Private Foundations:
“Private philanthropic organizations can possess important characteristics which modern government necessarily lacks. They may. be many-centered, free of administrative superstructure,- subject, tq the readily exercised control of individuals with widely diversified views and interests. Such characteristics give these organizations great opportunity to’initiate thought and action, to experiment with new and untried ventures, to dissent from prevailing attitudes, and to act quickly and flexibly. Precisely because they can be initiated and controlled by á single person or a small group, they may evoke great intensity of . interest and dedication of energy. These values, in themselves, justify the tax exemptions ■ and deductions which the law provides for) philanthropic activity.
“Private foundations play a significant part in the work of philanthropy. While, the -foundation is a relatively modern development, its predecessor, the trust, has ancient vintage. Like its antecedent, the foundation permits a donor to commit to special uses the funds which he gives to charity..... In these ways, foundations have enriched and strengthened the pluralism of our social order.
“Private foundations have also preserved fluidity arid,, provided impetus for change within the structure of American philanthropy. Operating charitable organizations tend to establish and work, within defined patterns. . . . The assets of private foundations, on the other hand, are frequently free of commitment to specific operating programs or projects; and that freedom permits foundations relative ease in the shift of their focus of interest and their financial support from one charitable area to another. New ventures can be assisted, new areas explored, new concepts developed, new causesadvanced. Because of its unique flexibility, then, the private foundation can constitute a powerful instrument for evolution, growth, and iiriprovement in the shape and direction of charity.”- Senate Committee on Finance, 89th Cong., 1st Sess., 12-13 (Comm. Print 1965).
The Commissioner states that the majority of organizations exempt under § 501 (c) (3) operate at a loss so that no income tax liability would result if their exemptions were revoked. Bob Jones University v. Simon, Brief for Petitioner 23 n. 22.
As has been noted, one of AU’s claims is that “substantial” and “propaganda,” as these words áre employed in § 501 (c) (3), are unconstitutionally vague. There are no clear, objective criteria by which the Commissioner draws his conclusions with respect to these terms. Moreover, the § 501 (c) (3) revocation is arrived at by, the Commissioner not solely by construing the language of § 501 (c) (3), but by his assertion, that that section and §§170 (a)(1) and (c)(2)(E) are- in pari ¿materia. Thus, the idiosyncrasies of the word “charitable” in § 170 (a)(1) are engraftedupon, and entwined with, the “organized and operated exclusively for religious, charitable . .or educational purposes” standard of §501 (c)(3). This • is nowhere compelled by statute, but is the, product of the Commissionex’s discretionary application and interpretation.
In Bob Jones University, ante, at 740, the Court suggests, that so long as an; action of the Service reSeets “a good-faith effort to enforce the technical reo s-ements of the tax laws,” the presence of a collateral motive does not render the Anti-Injunction Act inapplicable. I do not perceive just where the good-faith inquiry is made. It certainly is not made at the determination {whether a suit is for the purpose of restraining taxes. It is doubtful, that it is made in determining whether there are any circumstances under which the Government may ultimately prevail on the merits. Moreover, for me, there" is a distinct question as to the meaning of the Court’s phrase, “a good-faith effort to enforce the technical require7 ments of the tax laws.” Is innovation in effectuating social policy a good-faith effort to enforce technical requirements? Is a threat to revoke a, university’s exemption ruling made in good faith when it rests on the proposition that the institution does not comply with government-approved admission standards?
The Court assumes the ready availability of an FUTA refund suit. Ante, at 762-763, n. 13. It is curious, however, that the Commissioner did not assert this possibility in the earlier stages of the litigation. It was suggested, apparently, only after the main briefing in the Court of Appeals. Tr. of Oral Arg. 36-37. It is also noteworthy that in discussing the problem former Commissioner Thrower has stated:
“There is no practical possibility of quick judicial appeal at the present. If we deny tax exemption or the benefit to the organization of its donors having the assurance of deductibility of contributions, the organization must either create net taxable income or other tax liability for itself as a litigable issue, or find a donor who as a guinea pig is willing to make a contribution, have it disallowed, and litigate the disallowance.” Thrower, IRS Is Considering Far Reaching Changes in Ruling on Exempt Organizations, 34 J. of Taxation 168 (1971).
Whether proeedurally feasible or not, there is some indication that such suits are not common practice.
In Christiün Echoes a nonprofit religious corporation sued for refund of FICA taxes in an aggregate amount exceeding,8103,000 paid over seven taxable years. The purpose of the suit, of course, was to recover the taxes paid, but constitutional challenges to § 501 (c)(3) were the basic legal arguments. There is no suggestion in the court’s opinion that Christian Echoes’ primary concern was with the loss of contributions; this, however, must have been of relative importance.
Former Commissioner Thrower, in the article cited above, stated that “the issue under the best of circumstances could hardly come before a court until at least a year after the tax year in which the is sue crisps. Ordinarily, it would take much longer for the case of the organization’s status to be tried.” - 34 J. of Taxation 168.
The former Commissioner also made significant remarks with respect to the need for judicial determination of issues involved in this case that will be precluded by the Courts interpretation of § 7421:
"This is an extremely unfortunate situation for several reasons. First, it offends my sense of justice for undue delay to be imposed on one who needs a prompt decision. Second, in practical effect it gives a greater finality to IRS decisions than we would want or Congress intended. Third, it inhibits the growth of a body of case law interpretive of the exempt organization provisions that could guide the IRS in its further deliberations.” Ibid.
See Note, Procedural Due Process Limitations on the Suspension- of Advanced Assurance: of Deductibility, 47 S. Cal. L. Rev. 427 11974), for a detailed discussion of constitutional considerations of IRS letterrrulitig revocation without .a hearing.
The contention that the remedies suggested by the Commissioner are inadequate is supported by most of the commentator^ who have addressed the issue since these cases were decided in the Courts of Appeals. See Note, Constitutional Implications of Withdrawal of Federal Tax Benefits From Private Segregated Schools, 33 Md. L. Rev. 51, 53 (1973)’; Note,.The Loss of Privileged Tax Status, and Suits to Restrain- Assessments, 30 Wash. & Lee L. Rev. 573, 590 (1973); Comment, Avoiding the Anti-Injunction Statute in Suits to Enjoin Termination of Tax-Exempt Status, 14 Wm. & Mary L. Rev. 1014, 1025 (1973); Recent Development, 73 Col. L. Rev. 1502, 1513-1514 (1973); Notes, 46 Temp. L. Q. 596, 601 (1973).