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Anti-Injunction Act (1867)
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Anti-Injunction Act (1867)

The Anti-Injunction Act, currently codified at , is a United States federal law 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."

Contents


History

The Anti-Injunction Act was originally enacted as , 10. The modern equivalent was enacted as section 7421(a) of the Internal Revenue Code of 1954 (now the 1986 Code)[1]

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, 357 U.S. 63 (1958), affirmed on rehearing, 362 U.S. 145 (1960), 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 (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 after the IRS has denied the refund claim, or 6 months have elapsed (120 days in bankruptcy cases) since the filing of the claim, whichever is earlier.[2]

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 prior to assessment without first paying the tax.[3]

Impact

The Supreme Court, in the case Department of Health and Human Services v. Florida, in which the Court may decide the constitutionality of the Patient Protection and Affordable Care Act, may consider the applicability of the Anti-Injunction Act. The Court may consider whether the failure to comply with the "individual mandate" provided for in that law equates to a tax penalty. If it does, the Court's consideration of the "individual mandate" would fall under the Anti-Injunction Act and could preclude the federal courts from hearing the case until after the law goes into effect and after a prospective plaintiff has paid a tax penalty to the Internal Revenue Service in 2015.

When they considered this issue, the Circuit Courts handed down contradictory decisions. The Fourth Circuit ruled that the individual mandate imposes a tax penalty and therefore the Anti-Injunction Act prevented the court from considering constitutional issues. Two other Circuit Courts decided that the Anti-Injunction Act does not preclude the federal courts from deciding the constitutionality of the individual mandate.

Notes

See also






Source: Wikipedia | The above article is available under the GNU FDL. | Edit this article



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