The Morass of the Anti-Injunction Act: a Review of the Cases and Major Issues

Abstract

As Congress gives the Internal Revenue Service more tasks to perform beyond its function of assessing and collecting taxes, courts, practitioners, and academics are struggling to apply the Anti-Injunction Act (AIA) as the IRS promulgates procedures in the course of fulfilling new mandates. The AIA has its origins in the post-Civil War era when the federal government established new procedures ensuring the assessment and collection of taxes. It may seem odd an over 150-year old provision is fueling a growing number of contested and controversial disputes. Yet, the AIA has taken on renewed importance as courts consider challenges to tax regulations and guidance, fueled in part by the increasing importance of administrative law in issues of tax procedure and administration. From a normative perspective, we sympathize with legislative proposals providing additional ways to challenge regulations and other IRS guidance. We believe allowing an opportunity to bring good faith pre-enforcement challenges to regulations and guidance will enhance public confidence in the tax system and improve the quality of the rules in the first instance. Given congressional dysfunction and a low probability of any meaningful legislation addressing the issue (at least in the short term), courts, practitioners, and academics are left struggling with an increasingly complex and confused AIA jurisprudence. In this Article, which draws heavily on the AIA material in the Thompson Reuters treatise IRS Practice and Procedure where one of us is the lead successor author and the other a contributing author, we provide a discussion and analysis of the case law. Part I details the statutory provisions of the AIA and the Declaratory Judgment Act (DJA). Part II discusses judicially created exceptions to applications of the AIA. Part III examines what constitutes “restraining the assessment or collection” of tax. Part IV explores what constitutes a “tax” for purposes of the AIA and DJA.