The Tax Anti-Injunction Act, currently codified at , is a

United States federal law The law of the United States comprises many levels of codified and uncodified forms of law, of which the most important is the nation's Constitution, which prescribes the foundation of the federal government of the United States, as well as va ...

originally enacted in 1867. The statute provides that with 14 specified exceptions, "no 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".

History

The Anti-Injunction Act was originally enacted as , § 10. The modern equivalent was enacted on August 16, 1954, as section 7421(a) of the Internal Revenue Code of 1954 (now the 1986 Code).

Analysis

This rule is related to the Flora full payment rule, based in part on the United States Supreme Court decision in '' Flora v. United States'', essentially requiring that in most cases a person resisting the assessment of a U.S. federal tax must first pay the full amount of tax asserted by the

Internal Revenue Service The Internal Revenue Service (IRS) is the revenue service for the United States federal government, which is responsible for collecting U.S. federal taxes and administering the Internal Revenue Code, the main body of the federal statutory ta ...

(IRS) and then file a formal administrative claim for refund with the IRS. As a general rule, the courts will not entertain a suit to enjoin (or stop) the government from assessing the tax but will entertain a suit for a

tax refund A tax refund or tax rebate is a payment to the taxpayer due to the taxpayer having paid more tax than they owed. By country United States According to the Internal Revenue Service, 77% of tax returns filed in 2004 resulted in a refund check, ...

after the IRS has denied the refund claim, or 6 months have elapsed (120 days in

bankruptcy Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debtor ...

cases) since the filing of the claim, whichever is earlier. For the exception allowing litigation without first paying the tax in bankruptcy cases, see . For income taxes and certain other taxes, the taxpayer may also litigate the tax in the

United States Tax Court The United States Tax Court (in case citations, T.C.) is a federal trial court of record established by Congress under Article I of the U.S. Constitution, section 8 of which provides (in part) that the Congress has the power to "constitute Trib ...

prior to assessment without first paying the tax.See generally .

Impact

In the case of ''

National Federation of Independent Business v. Sebelius ''National Federation of Independent Business v. Sebelius'', 567 U.S. 519 (2012), was a List of landmark court decisions in the United States, landmark United States Supreme Court decision in which the Court upheld Congress's power to enact most ...

'', in which the constitutionality of the

Patient Protection and Affordable Care Act The Affordable Care Act (ACA), formally known as the Patient Protection and Affordable Care Act and colloquially known as Obamacare, is a landmark U.S. federal statute enacted by the 111th United States Congress and signed into law by Presi ...

was at issue, the U.S. Supreme Court upheld the constitutionality of the mandate imposed under that law. The Court also determined the applicability of the Tax Anti-Injunction Act to the litigation over the law.. The Court held that the individual mandate in that statute (codified in

Internal Revenue Code The Internal Revenue Code (IRC), formally the Internal Revenue Code of 1986, is the domestic portion of federal statutory tax law in the United States, published in various volumes of the United States Statutes at Large, and separately as Title 26 ...

section 5000A as a "penalty") does not fall under the Tax Anti-Injunction Act, on the rationale that Congress specifically labeled consequences of the mandate as a "penalty" rather than a "tax", whereas other portions of the Act were labeled as a "tax". The Court also ruled that the nature of the mandate does not preclude the federal courts from hearing the case before a prospective plaintiff has paid such a penalty to the

in the year 2015. In this case, the mandate was ruled to be constitutional as a valid exercise of the congressional taxing power.

Notes

{{reflist, 2 1867 in law 1867 in the United States United States federal judiciary legislation United States federal taxation legislation