Relationship between Anti-Injunction Act and Our Position

By ftsig-admin | September 9, 2024

When litigating tax issues, the following two important constraints always come into play:

  1. Anti-Injunction Act, 26 U.S.C. 7421: Prohibition of suits to restrain assessment or collection-this statute forbids suits to restrain the assessment or collection of tax.
  2. Full-Payment Rule, which is a Doctrine established by the U.S. Supreme Court in the following cases:
    2.1. Flora v. United States, 357 U.S. 63, 78 S.Ct. 1079 (1958)
    2.2. Laing v. U.S., 423 U.S. 161, 96 S.Ct. 473 (1976)
    This rule requires full payment of a tax liability before it can be litigated.

1. Full Payment Rule

The Full Payment Rule requires that those who seek refunds of taxes paid in federal district or circuit courts must pay the entire amount in controversy before they may file suit.  This rule was first established by the U.S. Supreme Court in the case of Flora v. United States and later clarified in the case of Laing v. U.S.:

The foregoing study of the legislative history of 28 U.S.C. §1346(a)(1) and related statutes leaves no room for contention that their broad terms were intended to alter in any way the Cheatham principle of “pay first and litigate later.”[1]  For many years that principle has been reinforced by the rule that no suit can be maintained for the purpose of restraining the assessment or collection of any tax.[2]  More recently, Congress took care to except from the operation of the Federal Declaratory Judgments Act any controversies “with respect to Federal taxes.”[3]   To ameliorate the hardship produced by these requirements Congress created a special court where tax questions could be adjudicated in advance of any payment. But there is no indication of any intent to create the hybrid remedy for which petitioner contends.

It is suggested that a part-payment remedy is necessary for the benefit of a taxpayer too poor to pay the full amount of the tax. Such an individual is free to litigate in the Tax Court without any advance payment. Where the time to petition that court has expired, or where for some other reason a suit in the District Court seems more desirable, the requirement of full payment may in some instances work a hardship. But since any hardship would grow out of an opinion whose effect Congress in successive [357 U.S. 63, 76]   statutory revisions has made no attempt to alter, if any amelioration is required it is now a matter for Congress, not this Court.

[Flora v. United States, 357 U.S. 63, 78 S.Ct. 1079 (1958)]

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At this point, Flora v. United States, 357 U.S. 63, 78 S.Ct. 1079, 2 L.Ed.2d. 1165 (1958), on rehearing, 362 U.S. 145, 80 S.Ct. 630, 4 L.Ed.2d. 623 (1960), deserves comment. In that case the Court held that a federal district court does not have jurisdiction of an action for refund of a part payment made by a taxpayer on an assessment. It ruled that the taxpayer must pay the full amount of the assessment before he may challenge its validity in the court action. Payment of the entire deficiency thus was made a prerequisite to the refund suit. The ruling, however, was tied directly to the jurisdiction of the Tax Court where litigation prior to payment of the tax was the usual order of the day. 362 U.S., at 158-163, 80 S.Ct., at 637-640. The holding thus kept clear and distinct the line between Tax Court jurisdiction and district court jurisdiction. The Court said specifically:

“A word should also be said about the argument that requiring taxpayers to pay the full assessments before bringing suits will subject some of them to great hardship. This contention seems to ignore entirely the right of the taxpayer to appeal the deficiency to the Tax Court without paying a cent.” Id., at 175, 80 S.Ct., at 646.

This passage demonstrates that the full-payment rule applies only where a deficiency has been noticed, that is, *209 only where the taxpayer has access to the Tax Court for redetermination prior to payment. This is the thrust of the ruling in Flora, which was concerned with the possibility, otherwise, of splitting actions between, and overlapping jurisdiction of, the Tax Court and the district court. Id., at 163, 165-167, 176, 80 S.Ct., at 640, 641-642, 646. Where, as here, in these terminated period situations, there is no deficiency and no consequent right of access to the Tax Court, there is and can be no requirement of full payment in order to institute a refund suit. The taxpayer may sue for his refund even if he is unable to pay the full amount demanded upon the termination of his taxable period. Irving v. Gray, 479 F.2d, at 24-25, n. 6; Lewis v. Sandler, 498 F.2d. 395, 400 (CA4 1974).

I recognize that on occasion the refund procedure may cause some hardship for the terminated taxpayer whose entire assets may be seized and who may be required to wait as long as six months before filing his refund suit. Indeed, this hardship was one of the reasons for establishing the Board of Tax Appeals as a prepayment forum in the first place. See H.R.Rep. No. 179, 68th Cong., 1st Sess., 7 (1924); S.Rep. No. 398, 68th Cong., 1st Sess., 8 (1924).FN14 It is obvious, of course, that when one taxpayer dishonestly *210 evades his share of the tax burden, **498 that share is shifted to all those who comply with the law. This balance of “hardship” doubtless was in the minds of those who formulated the statutory structure.

[Laing v. U.S., 423 U.S. 161, 96 S.Ct. 473 (U.S.Ky. 1976)]

FOOTNOTES:

[1] Allen v. Regents of University System of Georgia, 304 U.S. 439, 456, 58 S.Ct. 980, 988, 82 L.Ed. 1448 (concurring opinion).

[2] 14 Stat. 475 (1867), re-enacted in R.S. s 3224, presently in force as 26 U.S.C. (Supp. V) s 7421, 26 U.S.C.A. s 7421.

[3] 49 Stat. 1027, 28 U.S.C. s 2201, 28 U.S.C.A. s 2201. See S.Rep.No.1240, 74th Cong., 1st Sess. 11.

Most noteworthy about the above holdings is that:

1. They refer only to “taxpayers”.

2. They don’t even recognize the existence of “nontaxpayers” because the court doesn’t want to admit that income tax is voluntary for “nontaxpayers”.

3. They address the specific situation where a statutory refund is sought by a “taxpayer” pursuant to statute and pursuant to an existing lawfully assessed tax liability.  They do not address the situation in which a violation of law has occurred and equitable relief is sought absent a statute.  The statute that currently authorizes refunds to “taxpayers” would be 26 U.S.C. §6511(a), and this statute addresses an overpayment by a “taxpayer”, not an illegal payment made under protest by a “nontaxpayer”.

4. They do not and cannot lawfully impose a requirement upon “nontaxpayers”.  In fact, we could find no case law imposing any duties upon “nontaxpayers”, possibly because they are beyond the reach of the revenue laws:

“The revenue laws are a code or system in regulation of tax assessment and collection. They relate to taxpayers, and not to nontaxpayers. The latter are without their scope. No procedure is prescribed for nontaxpayers, and no attempt is made to annul any of their rights and remedies in due course of law. With them Congress does not assume to deal, and they are neither of the subject nor of the object of the revenue laws…”

[Long v. Rasmussen, 281 F. 236 (1922)]

“Revenue Laws relate to taxpayers [officers, employees, and elected officials of the Federal Government] and not to non-taxpayers [American Citizens/American Nationals not subject to the exclusive jurisdiction of the Federal Government].  The latter are without their scope.  No procedures are prescribed for non-taxpayers and no attempt is made to annul any of their Rights or Remedies in due course of law.  With them[non-taxpayers] Congress does not assume to deal and they are neither of the subject nor of the object of federal revenue laws.” 

[Economy Plumbing & Heating v. U.S., 470 F.2d. 585 (1972)]

Based on the above authorities:

1. The Full Payment Rule is a judicial doctrine that is not embodied in any statute.  In that sense, it is “judge made law”.

2. The Full Payment Rule does not apply where a deficiency is either not noticed or is improperly noticed by the IRS.  See the previous section for details on how to properly notice a lawfully assessed statutory deficiency.

3. The authority for invoking the Full Payment Rule is 28 U.S.C. §1346(a)(1).  That section is entitled “United States as Defendant”.  If you therefore bring suit against the assessment officer as a private individual, 28 U.S.C. §1346 does not apply.  In Flora, the U.S. Supreme Court mentioned that such an action would be “assumpsit”:

Assumpsit /as5m(p)sat/. Lat. He undertook; he promised. A promise or engagement by which one person assumes or undertakes to do some act or pay something to another. It may be either oral or in writing, but is not under seal. It is express if the promisor puts his engagement in distinct and definite language; it is implied where the law infers a promise (though no formal one has passed) from the conduct of the party or the circumstances of the case. Dukes v. Rogers, 67 Ga.App. 661, 21 S.E.2d. 295, 297.

A common law form of action which lies for the recovery of damages for the non-performance of a paro1 or simple contract; or a contract that is neither of record nor under seal. A liberal and equitable action, applicable to almost every case where money has been received which in equity and good conscience ought to be refunded; express promise is not necessary to sustain action, but it may be maintained whenever anything is received or done from the circumstances of which the law implies a promise of compensation. The action of assumpsit differs from trespass and trover, which are founded on a tort, not upon a contract; from covenant and debt, which are appropriate where the ground of recovery is a sealed instrument, or special obligation to pay a fixed sum; and from replevin, which seeks the recovery of specific property, if attainable, rather than of damages.

Express assumpsit. See Express assumpsit. General (common or indebitatus) assumpsit is an action of assumpsit brought upon the promise or contract implied by law in certain cases. It is founded upon what the law terms an implied promise on the part of defendant to pay what, in good conscience, he is bound to pay to plaintiff.

Special assumpsit is an action of assumpsit brought upon an express contract or promise.

[Black’s Law Dictionary, Fifth Edition, p. 112]

The contract or law they are implying as a basis for the assumpsit action is described as follows:

“A claim against the United States is a right to demand money from the United States. [1] Such claims are sometimes spoken of as gratuitous in that they cannot be enforced by suit without statutory consent. [2]   The general rule of non-liability of the United States  does not mean that a citizen cannot be protected against the wrongful governmental acts that affect the citizen or his or her property.[3] If, for example, money or property of an innocent person goes into the federal treasury by fraud to which a government agent was a party, the United States cannot [lawfully] hold the money or property against the claim of the injured party.[4]” 

[American Jurisprudence 2d, United States, §45 (1999)]

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“When the Government has illegally received money which is the property of an innocent citizen and when this money has gone into the Treasury of the United States, there arises an implied contract on the part of the Government to make restitution to the rightful owner under the Tucker Act and this court has jurisdiction to entertain the suit.

90 Ct.Cl. at 613, 31 F.Supp. at 769.”

[Gordon v. U. S., 227 Ct.Cl. 328, 649 F.2d. 837 (Ct.Cl., 1981)]

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“The United States, we have held, cannot, as against the claim of an innocent party, hold his money which has gone into its treasury by means of the fraud of its agent. While here the money was taken through mistake without element of fraud, the unjust retention is immoral and amounts in law to a fraud of the taxpayer’s rights. What was said in the State Bank Case applies with equal force to this situation. ‘An action will lie whenever the defendant has received money which is the property of the plaintiff, and which the defendant is obligated by natural justice and equity to refund. The form of the indebtedness or the mode in which it was incurred is immaterial.“

[Bull v. United States, 295 U.S. 247, 261, 55 S.Ct. 695, 700, 79 L.Ed. 1421]

4. 26 U.S.C. §1346(a)(1) cannot be invoked by “nontaxpayers”:

IRM 35.18.9.1  (08-31-1982)
Taxpayers

1.  It has been uniformly held that the waiver of sovereign immunity in section 1346(a)(1) of the Judiciary Code (28 U.S.C. §1346(a)(1)) only applies to taxpayers, and not nontaxpayers or interested parties. Busse v. United States, 542 F.2d. 421 (7th Cir. 1076);Hofheinz v. United States, 511 F.2d. 661 (5th Cir. 1975); Eighth Street Baptist Church v. United States, 431 F.2d. 1193 (10th Cir. 1970); Phillips v. United States, 346 F.2d. 999 (2d Cir. 1965); First Nat’l Bank of Emlenton v. United States, 165 F.2d. 297 (3rd Cir. 1959). Accordingly, where a party not liable for the tax has brought a refund suit, a motion to dismiss should be recommended.

5. The Full Payment Rule only applies to “taxpayers”, and not to “nontaxpayers”.  Since none of the cases covering it mention “nontaxpayers”, then they are excluded by implication:

“Expressio unius est exclusio alterius.  A maxim of statutory interpretation meaning that the expression of one thing is the exclusion of another.  Burgin v. Forbes, 293 Ky. 456, 169 S.W.2d. 321, 325; Newblock v. Bowles, 170 Okl. 487, 40 P.2d. 1097, 1100.  Mention of one thing implies exclusion of another.  When certain persons or things are specified in a law, contract, or will, an intention to exclude all others from its operation may be inferred.  Under this maxim, if statute specifies one exception to a general rule or assumes to specify the effects of a certain provision, other exceptions or effects are excluded.”

[Black’s Law Dictionary, Sixth Edition, p. 581]

6. The Full Payment Rule only applies when a “taxpayer” is seeking a statutory refund of monies already lawfully paid or collected pursuant to 26 U.S.C. §7422 and 26 U.S.C. §6511(a).  The Flora holding was about a statutory refund of monies already paid, not a suit to stop an illegal assessment or collection:

“A taxpayer who has not paid full amount of income tax deficiency cannot maintain action for refund under statute on theory that a part-payment remedy is necessary for benefit of taxpayer too poor to pay full amount of tax, since such an individual is free to litigate in the Tax Court without any advance payment, and while in case where time to petition that court has expired, or where for some other reason a suit in district court seems more desirable, requirement of full payment may in some instances work a hardship, such hardship would grow out of an opinion whose effect Congress in successive statutory revisions has made no attempt to alter, so that if any amelioration was required it was a matter for Congress. 28 U.S.C.A. § 1346(a)(1).”

[Flora v. United States, 357 U.S. 63, 78 S.Ct. 1079 (1958.), Westlaw Headnotes]

7. Suits not involving statutory refunds pursuant to 26 U.S.C. §7422 and 26 U.S.C. §6511(a) and which are brought before any tax is either paid or collected may be maintained at any time, and especially where the litigation is intended to restrain unlawful assessment and collection actions, such as those against nontaxpayers.  See section 11.12 later dealing with unlawful tax assessments.

8. Nowhere that we have found is a statute provided which:
8.1. Specifically authorizes damages for an unlawful assessment or collection of tax or a return of monies unlawfully collected to a “nontaxpayer”.
8.2. Defines the term “refund” to include monies unlawfully collected against a person who is not a statutory “taxpayer” as defined in 26 U.S.C. §7701(a)(14).
8.3. Prescribes any kind of duty or obligation upon persons who are not franchisees called “taxpayers”.

9. There is a steep cost to seeking a refund in Tax Court instead of District Court.  Namely, that you forfeit your right to sue in District Court for any aspect of an assessment or collection that was unlawful.  All appeals from Tax Court go straight to the Court of Appeals and bypass the District Court.  This requirement is not mandated by any statute we could find, but rather is a judicial doctrine.

10. In the Flora case the court pointed out the basis for the Full Payment Rule, which follows.  Upon principles of equity, this basis applies in both directions: 1.  To the United States when you owe them money; 2.  To you when they owe YOU money, for instance when you create your own franchise that requires THEM to waive sovereign immunity pay their due first before you pay their amount due.  This is a requirement of equal protection and equal treatment that is the foundation of the United States Constitution:

‘So also in the internal-revenue department, the statute which we have copied allows appeals from the assessor to the commissioner of internal revenue; and, if dissatisfied with his decision, on paying the tax the party can sue the collector; and, if the money was wrongfully exacted, the courts will give him relief by a judgment, which the United States pledges herself to pay.

‘* * * While a free course of remonstrance and appeal is allowed within the departments before the money is finally exacted, the general government has wisely made the payment of the tax claimed, whether of customs or of internal revenue, a condition precedent to a resort to the courts by the party against whom the tax is assessed. * * * If the compliance with this condition (that suit must be brought within six months of the Commissioner’s decision) requires the party aggrieved to pay the money, he must do it. He cannot, after the decision is rendered against him, protract the time within which he can contest that decision in the courts by his own delay in  paying the money. It is essential to the honor and orderly conduct of the government that its taxes should be promptly paid, and drawbacks speedily adjusted; and the rule prescribed in this class of cases is neither arbitrary nor unreasonable. * * *

[Flora v. United States, 357 U.S. 63, 67-68, 78 S.Ct. 1079 (1958)]

If you want a form that makes their unlawful receipt of YOUR money and your time into a franchise, causes them to have to pay their obligations to you under the franchise before you have to pay them anything, and forces them to waive sovereign immunity, see:

Tax Form Attachment, Form #04.201
http://sedm.org/Forms/FormIndex.htm

FOOTNOTES:

[1] United States ex rel. Angarica v. Bayard, 127 U.S. 251, 32 L.Ed.159, 8 S.Ct. 1156, 4 A.F.T.R. 4628 (holding that a claim against the Secretary of State for money awarded under a treaty is a claim against the United States); Hobbs v. McLean, 117 U.S. 567, 29 L.Ed.940, 6 S.Ct. 870; Manning v. Leighton, 65 Vt. 84, 26 A. 258, motion dismd 66 Vt. 56, 28 A. 630 and (disapproved on other grounds by Button’s Estate v. Anderson, 112 Vt. 531, 28 A.2d. 404, 143 ALR 195).

[2] Blagge v. Balch, 162 U.S. 439, 40 L.Ed. 1032, 16 S.Ct. 853.

[3] Wilson v. Shaw, 204 U.S. 24, 51 L.Ed. 351, 27 S.Ct. 233.

[4] Bull v. United States, 295 U.S. 247, 79 L.Ed. 1421, 55 S.Ct. 695, 35-1 U.S.T.C. ¶ 9346,15 A.F.T.R. 1069; United States v. State Bank, 96 U.S. 30, 96 Otto 30, 24 L.Ed. 647.

2. Anti-Injunction Act

Federal courts and government prosecutors are famous for quoting and enforcing the Anti-Injunction Act against “nontaxpayers”, which we define here as those who:

  1. Do not satisfy the definition of “taxpayer” found in 26 U.S.C. §7701(a)(14) and 26 U.S.C. §1313.
  2. Do not satisfy the definition of “person” found in 26 U.S.C. §6671(b) or 26 U.S.C. §7343.

All such actions by federal judges and federal prosecutors in the Dept. of Justice:

  1. Are unlawful and have been recognized as such by the U.S. Supreme Court is South Carolina v. Regan, 465 U.S. 367 (1984). 
  2. Constitute a treasonous attempt to undermine the protection of private rights for which government was established in the first place.

The Anti-Injunction Act is found at 26 U.S.C. §7421.  That act reads as follows:

TITLE 26 > Subtitle F > CHAPTER 76 > Subchapter B > § 7421

§ 7421. Prohibition of suits to restrain assessment or collection

(a) Tax

Except as provided in sections 6015 (e), 6212 (a) and (c), 6213 (a), 6225 (b), 6246 (b), 6330 (e)(1), 6331 (i), 6672 (c), 6694 (c), and 7426 (a) and (b)(1), 7429 (b), and 7436, 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.

(b) Liability of transferee or fiduciary

No suit shall be maintained in any court for the purpose of restraining the assessment or collection (pursuant to the provisions of chapter 71) of—

(1) the amount of the liability, at law or in equity, of a transferee of property of a taxpayer in respect of any internal revenue tax, or

(2) the amount of the liability of a fiduciary under section 3713 (b) of title 31, United States Code [1] in respect of any such tax.

The most complete history of the Anti Injunction Act is found in the case of South Carolina v. Regan, 465 U.S. 367 (1984), in which the U.S. Supreme court said the following:

The Secretary argues that Enochs v. Williams Packing & Navigation Co., 370 U.S. 1, 82 S.Ct. 1125, 8 L.Ed.2d. 292 (1962) establishes the single judicially-created exception to the Act and that this action does not fall within that exception. We need not address whether this case falls within the Williams Packing exception for we hold that the Act was not intended to bar an action where, as here, Congress has not provided the plaintiff with an alternative legal way to challenge the validity of a tax. [1]

[. . .]

When enacted in 1867, the forerunner of the current Anti-Injunction Act provided that “no suit for the purpose of restraining the assessment or collection of tax shall be maintained in any court.” Act of Mar. 2, 1867, § 10, 14 Stat. 475.FN10 Although the Act apparently has no recorded legislative history, Bob Jones University v. Simon, 416 U.S. 725, 736, 94 S.Ct. 2038, 2045, 40 L.Ed.2d. 496 (1974), the circumstances of its enactment strongly suggest that Congress intended the Act to bar a suit only in situations in which Congress had provided the aggrieved party with an alternative legal avenue by which to contest the legality of a particular tax.

FN10. In the revised statutes, the term “any” was added so that the statute read: “No suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court.” Snyder v. Marks, 109 U.S. 189, 192, 3 S.Ct. 157, 159, 57 L.Ed. 901 (1883). This language appears in the current version of the Act.

[1] The Act originated as an amendment to a statute that provided that

“No suit shall be maintained in any court for the recovery of any tax alleged to have been erroneously or illegally assessed or collected, until appeal shall have been duly made to the commissioner of internal revenue … and a decision of said commissioner shall be had thereon, unless such suit shall be brought within six months from the time of said decision …” Internal Revenue Act of July 13th, 1866, § 19, 14 Stat. 152.

The Anti-Injunction Act amended this statute by adding the prohibition against injunctions. Act of Mar. 2, 1867, § 10, 14 Stat. 475. The Act, therefore, prohibited injunctions in the context of a statutory scheme that provided an alternative remedy. As we explained in Snyder v. Marks, 109 U.S. 189, 193, 3 S.Ct. 157, 159, 27 L.Ed. 901 (1883), “[t]he remedy of a suit to recover back the tax after it is paid is provided by statute, and a suit to restrain its collection is forbidden.” This is cogent evidence that the 1867 amendment was merely intended to require taxpayers to litigate their claims in a designated proceeding.

The Secretary argues that, regardless of whether other remedies are available, a plaintiff may only sue to restrain the collection of taxes if it satisfies the narrow exception to the Act enunciated in Williams Packing, supra. Williams Packing did not, however, ever address, let alone decide, the question whether the Act applies when Congress has provided no alternative remedy. Indeed, as we shall see, a careful reading of Williams Packing and its progeny supports our conclusion that the Act was not intended to apply in the absence of such a remedy.

Williams Packing was a taxpayer’s suit to enjoin the District Director of the Internal Revenue Service from collecting allegedly past-due social security and unemployment taxes. The Court concluded that the Anti-Injunction Act would not apply if the taxpayer (1) was certain to succeed on the merits, and (2) could demonstrate that collection would cause him irreparable harm. 370 U.S., at 6-7, 82 S.Ct., at 1128-1129. Finding that the first condition had not been met, the Court concluded that the Act barred the suit. Significantly, however, Congress had provided the plaintiff in Williams Packing with the alternative remedy of a suit for a refund. Id., at 7, 82 S.Ct., at 1129.

In each of this Court’s subsequent cases that have applied the Williams Packing rule, the plaintiff had the option of paying the tax and bringing a suit for a refund. Moreover, these cases make clear that the Court in Williams Packing and its progeny did not intend to decide whether the Act would apply to an aggrieved party who could not bring a suit for a refund.

For example, in Bob Jones, supra, the taxpayer sought to prevent the Service from revoking its tax-exempt status under I.R.C. § 501(c)(3). Because the suit would have restrained the collection of income taxes from the taxpayer and its contributors, as well as the collection of federal social security and unemployment taxes from the taxpayer, the Court concluded that the suit was an action to restrain “the assessment or collection of any tax” within the meaning of the Anti-Injunction Act. 416 U.S., at 738-739, 94 S.Ct., at 2046-2047. Applying the Williams Packing test, the Court found that the Act barred the suit because the taxpayer failed to demonstrate that it was certain to succeed on the merits. Id., at 749, 94 S.Ct., at 2052. In rejecting the taxpayer’s challenge to the Act on due process grounds, however, the Court relied on the availability of a refund suit, noting that “our conclusion might well be different” if the aggrieved party had no access to judicial review. 416 U.S., at 746, 94 S.Ct., at 2050. Similarly, the Court left open the question whether the Due Process Clause would be satisfied if an organization had to rely on a “friendly donor” to obtain judicial review of the Service’s revocation of its tax-exemption. Id., at 747 n. 21, 94 S.Ct., at 2051 n. 21.[2]

In addition, in Commissioner v. “Americans United” Inc., 416 U.S. 752, 94 S.Ct. 2053, 40 L.Ed.2d. 518 (1974), decided the same day as Bob Jones, the Court considered a taxpayer’s action to require the Service to reinstate its tax-exempt status.[3] The **1113 Court applied the Williams Packing test and held that the action was barred *376 by the Act. Finally, in United States v. American Friends Service Committee, 419 U.S. 7, 95 S.Ct. 13, 42 L.Ed.2d. 7 (1974) ( per curiam ), the taxpayers sought to enjoin the Government from requiring that a portion of their wages be withheld. The taxpayers argued that the withholding provisions violated their First Amendment right to bear witness to their religious beliefs. The Court again applied the Williams Packing rule and found that the suit was barred by the Anti-Injunction Act. In both of these cases, the taxpayers argued that the Williams Packing test was irrelevant and the Act inapplicable because they did not have adequate alternative remedies. In rejecting this argument, the Court expressly relied on the availability of refund suits. 416 U.S., at 761, 94 S.Ct., at 2058; 419 U.S., at 11, 95 S.Ct., at 15. This emphasis on alternative remedies would have been irrelevant had the Court meant to decide that the Act applied in the absence of such remedies. We therefore turn to that question.

The analysis in Williams Packing and its progeny of the purposes of the Act provides significant support for our holding today. Williams Packing expressly stated that the Act was intended to protect tax revenues from judicial interference “ and to require that the legal right to the disputed sums be determined in a suit for a refund.” 370 U.S., at 7, 95 S.Ct., at 1129 (emphasis added). Similarly, the Court concluded that the Act was also designed as “protection of the collector from litigation pending a suit for a refund,” id., at 7-8, 95 S.Ct., at 1129 (emphasis added). The Court’s concerns with protecting the expeditious collection of revenue and protecting the collector from litigation were expressed in the context of a procedure that afforded the taxpayer the remedy of a refund suit.[4]

Nor is our conclusion inconsistent with the 1966 amendment to the Anti-Injunction Act. In 1966, in § 110(c) of the Federal Tax Lien Act, Pub.L. No. 89-719, 80 Stat. 1125, Congress amended the Anti-Injunction Act to read, in pertinent part, that “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.” Id., § 110(c), 80 Stat. 1144. The central focus of the added phrase, “by any person whether or not such person is the person against whom such tax was assessed,” was on third parties whose property rights competed with federal tax liens. Bob Jones, supra, 416 U.S., at 732 n. 6, 94 S.Ct., at 2044 n. 6. Prior to the adoption of the Tax Lien Act, such parties were often unable to protect their property interests. Id.; H.R.Rep. No. 1884, 89th Cong., 2d Sess. 27-28 (1966).[5] Section 110(a) of the Tax Lien Act gave such third parties a right of action against the United States.[6] The amendment to the Anti-Injunction Act was primarily designed to insure that the right of action granted by § 110(a) of the Federal Tax Lien Act was exclusive. 416 U.S., at 732 n. 6, 94 S.Ct., at 2044 n. 6. The language added to the Anti-Injunction Act by the 1966 amendment is, therefore, largely irrelevant to the issue before us today.[7]

Similarly, we stated in Americans United that “a suit to enjoin the assessment or collection of anyone’s taxes triggers the literal terms” of the Act. 416 U.S., at 760, 94 S.Ct., at 2058. Of course, this statement was meant to apply only if the aggrieved party has an alternative remedy.

Justice O’CONNOR relies heavily on Assistant Treasury Secretary Surrey’s statement to the House Ways and Means Committee to support her view that the 1966 amendment to the Anti-Injunction Act was intended to prohibit third parties from suing to restrain the collection of taxes regardless of whether Congress has provided them with an alternative remedy. Post, at 1120. This reliance is misplaced.

Although the Assistant Secretary described the amendment as a restriction on third-party suits, when read in context, it is unclear whether he was referring to all third parties, including those without alternative remedies, as Justice O’CONNOR believes, or only to those third parties who were granted a right of action by Section 110(a) of the Federal Tax Lien Act. See Statement by the Hon. Stanley S. Surrey, Assistant Secretary of the Treasury, reprinted in Hearings Before the Committee on Ways and Means on H.R. 11256 and H.R. 11290, 89th Cong., 2d Sess. 58 (1966).

Even if Assistant Secretary Surrey viewed the 1966 amendment as prohibiting suits by third-parties who had no alternative remedies, there is nothing in the legislative history of that amendment to support the view that Congress shared that belief. Justice O’CONNOR relies on the statements in the House and Senate Reports that “ ‘[u]nder present law … the United States cannot be sued by third persons where its collection activities interfere with their property rights,’ ” Post, at 1120, quoting H.R.Rep. No. 1884, 89th Cong., 2d Sess., 27 (1966); S.Rep. No. 1708, 89th Cong., 2d Sess., 29 (1966), U.S.Code Cong. & Admin.News, pp. 3722, 3750. Since the Anti-Injunction Act had been widely construed not to bar such suits, see n. 13, supra, however, this statement simply could not have been intended as a description of the effect of that Act.

In sum, the Act’s purpose and the circumstances of its enactment indicate that Congress did not intend the Act to apply to actions brought by aggrieved parties for whom it has not provided an alternative remedy.[8]FN17 In this case, if the plaintiff South Carolina issues bearer bonds, its bondholders will, by virtue of § 310(b)(1) of TEFRA, be liable for the tax on the interest earned on those bonds. South Carolina will incur no tax liability. Under these circumstances, the State will be unable to utilize any statutory procedure to contest the constitutionality of § 310(b)(1). Accordingly, the Act cannot bar this action.

Justice O’CONNOR relies on statements in the legislative history of I.R.C. § 7478 indicating that Congress believed that, prior to the enactment of that section, prospective issuers of State and local bonds had no means to determine whether the interest on their bonds would be tax-exempt. Post, at 1121 – 1122. In her view, these statements are strong evidence that Congress intended the Anti-Injunction Act to apply regardless of the availability of an alternative remedy.

We find these statements unpersuasive. To the extent that these statements, which do not even refer to the Anti-Injunction Act, may be read as expressing the view that the Act should be construed to bar suits regardless of the availability of alternative remedies, they are the views of a subsequent Congress and, therefore, at best, “form a hazardous basis for inferring the intent of an earlier one.” Consumer Product Safety Commission v. GTE Sylvania, 447 U.S. 102, 117, 100 S.Ct. 2051, 2060, 64 L.Ed.2d. 766 (1980), quoting United States v. Price, 361 U.S. 304, 313, 80 S.Ct. 326, 331, 4 L.Ed.2d. 334 (1960).

Justice O’CONNOR, relying on Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 380-381, 89 S.Ct. 1794, 1801-1802, 23 L.Ed.2d. 371 (1969) and Federal Housing Admin. v. The Darlington, Inc., 358 U.S. 84, 90, 79 S.Ct. 141, 145, 3 L.Ed.2d. 132 (1958), argues that these statements should be given “ ‘great weight’ ” in construing the Anti-Injunction Act. This reliance is misplaced. In Red Lion we stated that “[s]ubsequent legislation declaring the intent of an earlier statute is entitled to great weight.” 395 U.S., at 380, 89 S.Ct., at 1801 (emphasis added). The Darlington stands for the same proposition. We have previously rejected the argument that the Red Lion rule should be applicable to the committee reports that accompany subsequent legislation. In Consumer Product Safety Comm’n, supra, 447 U.S., at 118 n. 13, 100 S.Ct., at 2061 n. 13, we stated that “[w]ith respect to subsequent legislation … Congress has proceeded formally through the legislative process. A mere statement in a conference report of such legislation as to what the Committee believes an earlier statute meant is obviously less weighty.”

Indeed, Justice O’CONNOR does not consistently accord “great weight” to the legislative history of § 7478. In Part I of her opinion, she states that the legislative history of § 7478 represents Congress’s “belief that the Tax Anti-Injunction Act generally bars nontaxpayers from bringing the kind of injunctive action the State of South Carolina asks leave to file today.” Post, at 1121. Under this view, the statement in the Senate Report accompanying § 7478 that “present law does not allow the State … government to go to court,” S.Rep. No. 95-1263, 95th Cong., 2d Sess. 150 (1978), U.S.Code Cong. & Admin.News, pp. 6761, 6913, must mean that Congress believed that the Anti-Injunction Act barred original actions in this court as well as actions in lower courts. Yet, in reaching her conclusion that the Act does not apply to bar original actions in this Court, Justice O’CONNOR apparently accords no weight at all to this legislative history. Post, at 1125 – 1126.

For similar reasons, we find the remaining post-enactment history upon which Justice O’CONNOR relies, post, at 1121, to be unconvincing. Whatever the weight to which these statements are entitled, they are ultimately unpersuasive in light of the other evidence of congressional intent discussed above.

The Secretary suggests that the State may obtain judicial review of its claims by issuing bearer bonds and urging a purchaser of those bonds to bring a suit contesting the legality of § 310(b)(1). But the nature of this proposed remedy only buttresses our conclusion that the Act was not intended to apply to this kind of action. First, instances in which a third party may raise the constitutional rights of another are the exception rather than the rule. Singleton v. Wulff, 428 U.S. 106, 114, 96 S.Ct. 2868, 2874, 49 L.Ed.2d. 826 (1976). More important, to make use of this remedy the State “must first be able to find [an individual] willing to subject himself to the rigors of litigation against the Service, and then must rely on [him] to present the relevant arguments on [its] behalf.” Bob Jones, supra, 416 U.S., at 747 n. 21, 94 S.Ct., at 2051 n. 21. Because it is by no means certain that the State would be able to convince a taxpayer to raise its claims,[9] reliance on the remedy suggested by the Secretary would create  the risk that the Anti-Injunction Act would entirely deprive the State of any opportunity to obtain review of its claims. For these reasons, we should not lightly attribute to Congress an intent to require plaintiff to find a third party to contest its claims. Here, the indicia of congressional intent-the Act’s purposes and the circumstances of its enactment-demonstrate that Congress did not intend the Act to apply where an aggrieved party would be required to depend on the mere possibility of persuading a third party to assert his claims. Rather, the Act was intended to apply only when Congress has provided an alternative avenue for an aggrieved party to litigate its claims on its own behalf.[10] Because Congress did not  prescribe an alternative remedy for the plaintiff in this case, the Act does not bar this suit.

Justice O’CONNOR also appears to suggest that our holding today renders the Act a restatement of the equitable principles governing the issuance of injunctions at the time the statute was enacted. Post, at 1119 – 1120 n. 5. This argument is without merit since these equitable principles did not require that injunctions issue only when no alternative remedy was available. See, e.g., Dows v. Chicago, 78 U.S. (11 Wall.) 108, 109-110, 20 L.Ed. 65 (1871) (suit to restrain collection of taxes will lie if plaintiff shows that enforcement will cause irreparable harm or lead to a multiplicity of suits); Hannewinkle v. Georgetown, 82 U.S. (15 Wall.) 547, 548-549, 21 L.Ed. 231 (1873) (same).

[. . .]

In answering the first question, the Court reaches the unwarranted conclusion that the Tax Anti-Injunction Act proscribes only those suits in which the complaining party, usually a taxpayer, can challenge the validity of a taxing measure in an alternative forum. The Court holds that suits by nontaxpayers generally are not barred. In my opinion, the Court’s interpretation fundamentally misconstrues the congressional anti-injunction policy. Accordingly, I cannot join its opinion.

The Tax Anti-Injunction Act provides, in pertinent part, that “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.” 26 U.S.C. §7421(a). The Act’s language “could scarcely be more explicit” in prohibiting nontaxpayer suits like this one, Bob Jones University v. Simon, 416 U.S. 725, 736, 94 S.Ct. 2038, 2045, 40 L.Ed.2d. 496 (1974), since the suit indisputably would have the purpose and effect of restraining taxes. See id., at 738-742, 94 S.Ct., at 2046-2048. The Act plainly bars not only “a taxpayer’s *386 attempt to enjoin the collection of his own taxes, …” but also “a suit to enjoin the assessment or collection of anyon[e] [else’s] taxes ….” Alexander v. “Americans United” Inc., 416 U.S. 752, 760, 94 S.Ct. 2053, 2058, 40 L.Ed.2d. 518 (1974). Though the Internal Revenue Code (Code) contains a few exceptions to this nearly complete ban,[11] for the most part Congress has restricted the judicial role to resolution of concrete disputes over specific sums of money, either by way of a deficiency proceeding in the Tax Court, see 26 U.S.C. §§ 6212, 6213, or by way of a taxpayer’s suit for refund, see 26 U.S.C. §§ 6532, 7422.

In depriving courts of jurisdiction to resolve abstract tax controversies, Congress has determined that the United States must be able “to assess and collect taxes alleged to be due without judicial intervention ….” Enochs v. Williams Packing & Navigation Co., 370 U.S. 1, 7, 82 S.Ct. 1125, 1129, 8 L.Ed.2d. 292 (1962). “[T]axes are the life-blood of government,” Bull v. United States, 295 U.S. 247, 259, 55 S.Ct. 695, 699, 79 L.Ed. 1421 (1935), and the anti-injunction prohibition is Congress’ recognition that “the tenacity of the American taxpayer” constantly threatens to drain the nation of a life-sustaining infusion of revenues. See Gorovitz, Federal Tax Injunctions and the Standard Nut Cases, 10 Taxes 446, 446 (1932). The Act’s proscription literally extends to nontaxpayer as well as taxpayer suits, if only to prevent taxpayers from sidestepping the anti-injunction policy by bringing suit through non-taxpaying associations of taxpayers.[12] *387 Moreover, by broadly precluding both taxpayer and nontaxpayer suits, the Act serves a collateral objective of protecting “the collector from litigation pending a suit for refund.” Enochs v. Williams Packing & Navigation Co., supra, 370 U.S., at 7-8, 82 S.Ct., at 1129. The tax collector is an attractive target for all kinds of litigation, see, e.g., Simon v. Eastern Kentucky Welfare Rights Organization, 426 U.S. 26, 96 S.Ct. 1917, 48 L.Ed.2d. 450 (1976), and the Act ensures that only Congress and the Treasury, not a host of private plaintiffs, will determine the focus of the collector’s energies.

The Act’s history expressly reflects the congressional desire that all injunctive suits against the tax collector be prohibited. First enacted in 1867,[13] it apparently was designed to protect the federal tax system from being inundated with the same type of injunctive suits that were then sweeping over the state tax systems. See State Railroad Tax Cases, 92 U.S. 575, 613, 23 L.Ed. 663 (1876); Snyder v. Marks, 109 U.S. 189, 193-194, 3 S.Ct. 157, 159-160, 27 L.Ed. 901 (1883). There is little contemporaneous documentation,[14] but this Court’s decisions indicate that the 39th Congress acted with a:

“… sense of … the evils to be feared if courts of justice could, in any case, interfere with the process of collecting*388 the taxes on which the government depends for its continued existence.” State Railroad Tax Cases, supra, 92 U.S., at 613, 23 L.Ed. 663.

The experience in the states demonstrated the grave dangers which accompany intrusion of the injunctive power of the courts into the administration of the revenue:

“If there existed in the courts … any general power of impeding or controlling the collection of taxes, or relieving the hardship incident to taxation, the very existence of the government might be placed in the power of a hostile judiciary.” Cheatham v. United States, 92 U.S. 85, 89, 23 L.Ed. 561 (1876).

To avoid these evils and to safeguard the federal tax system, the 39th Congress committed administration of the Code to the discretion of the Secretary of the Treasury.[15]

This broad anti-injunction ban remained essentially untouched for almost a century.[16] In 1966, however, Congress took steps to “reaffirm the plain meaning of the original language of the Act.” Alexander v. “Americans United” Inc., 416 U.S. 752, 760, and n. 11, 94 S.Ct. 2053, 2058, and n. 11, 40 L.Ed.2d. 518 (1974). In § 110(c) of the Federal Tax Lien Act, Pub.L. No. 89-719, 80 Stat. 1125, Congress amended the Act to emphasize that no injunctive action “ by any person, whether or not such person is the person against whom such tax was assessed” could be maintained in the courts. Id., § 110(c), 80 Stat. 1144 (emphasis added). The Treasury Department proposed the 1966 amendment, and its principal spokesperson, Assistant Secretary Surrey, testified that:

“Subsection (c) of section 110 of the bill amends section 7421(a) of the code. That section presently prohibits injunctions against the assessment or collection of tax. The cases decided under this provision raise a question as to whether this prohibition applies against actions by persons other than the taxpayer. New section 7426 will specifically allow actions by third parties to enjoin the enforcement of a levy or sale of property. The amendment to section 7421 makes clear that third parties may bring injunction suits only under the circumstances provided in new section 7426(b)(1) of the code.” Statement by the Hon. Stanley S. Surrey, Assistant Secretary of the Treasury, reprinted in Hearings Before the Committee on Ways and Means on H.R. 11256 and H.R. 11290, 89th Cong., 2d Sess., 58 (1966).

The House Committee on Ways and Means and the Senate Committee on Finance apparently shared Mr. Surrey’s understanding of the rights of nontaxpayers under prior law, for their reports both state:

“Under present law, … the United States cannot be sued by third persons where its collection activities interfere with their property rights. This includes cases where the Government wrongfully levies on one person’s property in attempting to collect from a taxpayer. However, some courts allow suits to be brought against district directors of Internal Revenue where this occurs.” H.R.Rep. No. 1884, 89th Cong., 2d Sess., 27 (1966); S.Rep. No. 1708, 89th Cong., 2d Sess., 29 (1966), U.S.Code Cong. & Admin.News, p. 3750.

To accommodate these conflicting rights, both committees recommended that Congress enact § 7426, allowing “persons other than taxpayers” to bring suits against the United States to protect pre-existing liens on property levied upon by the Treasury, and amend § 7421(a) to forbid suits by all third persons, excepting those within the ambit of new § 7426. Congress followed the committees’ recommendations, on the understanding that the new language in § 7421(a) was “declaratory, not innovative.” Bob Jones University v. Simon, supra, 416 U.S., at 731-732, n. 6, 94 S.Ct., at 2043-2044, n. 6.[17]

Similarly, I do not believe, as the Court apparently does, see ante, at nn. 14, 16, that statements in Bob Jones University v. Simon, supra, to the effect that the Act bars third-party suits, can or should be “disregarded.” Those statements were made after studious interpretation of both the original Act and its 1966 amendment. They reflect what I believe is the only faithful reading of the statute’s language and history.

Congress has since relaxed the statutory proscription against third-party suits on several occasions. For example, in 1974, it provided that certain designated persons could obtain declaratory judgments in the Tax Court with respect to the tax status of pension plans. See 26 U.S.C. § 7476. Similarly, in 1976, because “[u]nder [prevailing] law no court review of [Internal Revenue Service] ruling[s] [was] available,” S.Rep. No. 94-938, pt. II, p. 463 (1976), U.S.Code Cong. & Admin.News, pp. 2897, 4169, Congress provided declaratory judgment procedures for determining the tax status of charitable organizations and of certain property transfers. See 26 U.S.C. §§ 7428, 7477; see also S.Rep. No. 94-938, supra, pp. 523-524, U.S.Code Cong. & Admin.News, p. 4223 (“Under present law, the Tax Court can hear declaratory judgment suits only on the tax status of employee retirement plans. In no other case may an individual or an organization seek a declaratory judgment as to an organization’s tax-exempt status.”). Finally, in 1978, in 26 U.S.C. § 7478, Congress provided a mechanism whereby State or local governments could seek declaratory judgments as to the tax status of proposed municipal bond issuances.[18] The relevant Senate Report noted that:

“As a practical matter, there is no effective appeal from a Service private letter ruling (or failure to issue a private letter ruling) that a proposed issue of municipal bonds is taxable. In those cases, although there may be a real controversy between a State or local government and the Service, present law does not allow the State or local government to go to court. The controversy can be resolved only if the bonds are issued, a bondholder excludes interest on the bonds from income, the exclusion is disallowed, and the Service asserts a deficiency in its statutory notice of deficiency. This uncertainty coupled with the threat of the ultimate loss of the exclusion, invariably makes it impossible to market the bonds. In addition, it is impossible for a State or local government to question the Service rulings and regulations directly.

“[S]tate and local government[s] should have a right to court adjudication in the situation described above. The bill deals with the problem by providing … for a declaratory judgment as to the tax status of a proposed*392 issue of municipal bonds.” S.Rep. No. 95-1263, pp. 150-151 (1978), U.S.Code Cong. & Admin.News, pp. 6913-14.

The Conference Report reflects a similar view of prevailing law. See H.R.Conf.Rep. No. 95-1800, p. 240 (1978). Thus, in 1974, 1976, and again in 1978, Congress expressed its belief that the Tax Anti-Injunction Act generally bars nontaxpayers from bringing the kind of injunctive action the State of South Carolina asks leave to file today.[19]

These subsequently enacted provisions and the legislative understanding of them are entitled to “great weight” in construing earlier, related legislation. See, e.g., Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 380-381, 89 S.Ct. 1794, 1801-1802, 23 L.Ed.2d. 371 (1969); Federal Housing Admin. v. The Darlington, Inc., 358 U.S. 84, 90, 79 S.Ct. 141, 145, 3 L.Ed.2d. 132 (1958). Combined with the legislative purposes obviously motivating the 39th and 89th Congresses, these provisions conclusively demonstrate that, absent express exemption, the Act generally precludes judicial resolution of all abstract tax controversies, even if the complaining parties would have no other forum in which to bring their challenges.

The Court drew these same conclusions in Bob Jones University v. Simon. See 416 U.S. 725, 736-746, 94 S.Ct. 2038, 2045-2050, 40 L.Ed.2d. 496. In that case, the Court rejected a private institution’s request that an additional exception beyond the one created in Enochs v. Williams Packing & Navigation Co., 370 U.S. 1, 82 S.Ct. 1125, 8 L.Ed.2d. 292 (1962) (equity court may issue injunction where it is clear that under no circumstances could the Government prevail), be carved out of the Act.[20] The Court responded that Williams Packing:

“was meant to be the capstone to judicial construction of the Act. It spells an end to a cyclical pattern of allegiance to the plain meaning of the Act, followed by periods of uncertainty caused by the judicial departure from that meaning, and followed in turn by the Court’s redisclosing of the Act’s purpose.” 416 U.S., at 742, 94 S.Ct., at 2048.

Bob Jones University then reaffirmed that, except where a litigant can show both that the government would “under no circumstances prevail” and that equity jurisdiction is otherwise present, the Act would be given its “literal effect.” Id., at 736, 742-745, 94 S.Ct., at 2045, 2048-2050.

Because the plaintiffs in Bob Jones University were assured ultimately of having access to a judicial forum, the Court did not definitively resolve whether Congress could bar a tax suit in which the complaining party would be denied all access to judicial review. See 416 U.S., at 746, 94 S.Ct., at 2050. But the Court’s reference to “a case in which an aggrieved party has no access at all to judicial review” came in the context of its discussion of the taxpayer’s claim that postponement of its challenge to the revocation of its tax-exempt status would violate due process. Bob Jones University’s dictum, therefore, should be interpreted only as reflecting the established rule that Congress cannot, consistently with due process, deny a taxpayer with property rights at stake all opportunity for an ultimate judicial determination of the legality of a tax assessment against him. See Phillips v. Commissioner, 283 U.S. 589, 596-597, 51 S.Ct. 608, 611-612, 75 L.Ed. 1289 (1931).

On this reading, Bob Jones University’s recognition that the complete inaccessability of judicial review might implicate due process concerns provides absolutely no basis for crafting an exception in this case. The State of South Carolina is not a “person” within the meaning of the Due Process Clause. See South Carolina v. Katzenbach, 383 U.S. 301, 323-324, 86 S.Ct. 803, 815-816, 15 L.Ed.2d. 769 (1966). Nor does the State assert a right cognizable as a “property” interest protected by that Clause. See generally Logan v. Zimmerman Brush Co., 455 U.S. 422, 430-433, 102 S.Ct. 1148, 1155-1156, 71 L.Ed.2d. 265 (1982) (cataloguing cases). Therefore, it has no due process right to review of its claim in a judicial forum.[21]

In holding that the Act does not bar suits by nontaxpayers with no other remedies, the Court today has created a “breach in the general scheme of taxation [that] gives an opening for the disorganization of the whole plan [.]” Allen v. Regents, 304 U.S. 439, 454, 58 S.Ct. 980, 987, 82 L.Ed. 1448 (Reed, J., concurring in the result). Non-taxpaying associations of taxpayers, and most other nontaxpayers, will now be allowed to sidestep Congress’ policy against judicial resolution of abstract tax controversies. They can now challenge both Congress’ tax statutes and the Internal Revenue Service’s regulations, revenue rulings, and private letter decisions. In doing so, they can impede *395 the process of collecting federal revenues and require Treasury to focus its energies on questions deemed important not by it or Congress but by a host of private plaintiffs. The Court’s holding travels “a long way down the road to the emasculation of the Anti-Injunction Act, and down the companion pathway that leads to the blunting of the strict requirements of Williams Packing ….” Commissioner v. Shapiro, 424 U.S. 614, 635, 96 S.Ct. 1062, 1074, 47 L.Ed.2d. 278 (1976) (BLACKMUN, J., dissenting). I simply cannot join such a fundamental undermining of the congressional

[South Carolina v. Regan, 465 U.S. 367 (1984)]

The federal courts have developed six criteria for use in determining whether a challenge to the assessment or collection of internal revenue taxes may survive the Anti Injunction Act.  These criteria are identified in the case of Elias v. Connett, 908 F.2d. 521, 523 (9thCir.1990). 

Actions to enjoin the assessment and collection of taxes by the IRS are narrowly limited by the Anti-Injunction Act (“Act”), 26 U.S.C. § 7421. Cool Fuel, Inc. v. Connett, 685 F.2d. 309, 313 (9th Cir.1982). In pertinent part, the Act states that “no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court by any person….” 26 U.S.C. §7421(a). There are, however, several statutory exceptions and one judicial exception to the Act. See id. §§ 6212(a), (c), 6213(a), 6672(b), 6694(c), 7426(a), (b)(1), 7429(b); Bob Jones Univ. v. Simon, 416 U.S. 725, 736-37, 94 S.Ct. 2038, 2045-46, 40 L.Ed.2d. 496 (1974).

The district court must dismiss for lack of subject matter jurisdiction any suit that does not fall within one of the exceptions to the Act. Alexander v. “Americans United” Inc., 416 U.S. 752, 757-58, 94 S.Ct. 2053, 2056-57, 40 L.Ed.2d. 518 (1974); Jensen, 835 F.2d. at 198. Thus, “[o]nce a taxpayer satisfies one of the exceptions to the Act, he is no longer jurisdictionally barred from seeking an injunction.” Jensen, 835 F.2d. at 198. The taxpayer, however, must, in addition to satisfying an exception to the Act, also allege sufficient grounds to warrant equitable relief. See id. at 198-99; Maxfield v. United States Postal Serv., 752 F.2d. 433, 434 (9th Cir.1984).

[Elias v. Connett, 908 F.2d. 521, 523 (9thCir.1990)]

The above six criteria are:

  1. 26 U.S.C. §6212(a), (c):  Notice of Deficiency sent to “taxpayer”
  2. 26 U.S.C. §6213(a):  Time for filing petition and restriction on assessment
  3. 26 U.S.C. §6672(b):  Preliminary notice requirement
  4. 26 U.S.C. §6694(c):  Extension of period of collection where preparer pays 15 percent of penalty
  5. 26 U.S.C. §7426(a), (b)(1):  Actions permitted by persons other than “taxpayers”; Adjudication
  6. 26 U.S.C. §7429(b):  Judicial review of jeopardy or levy assessment

Note in the above ruling that:

1. The word “taxpayer” is used in describing the limitations of the above act.

2. All the exceptions come from the Internal Revenue Code, which the courts have said only applies to “taxpayers”.  This is because it is private law and a franchise that only activates upon the consent of franchisees called “taxpayers”:

“Revenue Laws relate to taxpayers and not to non-taxpayers.  The latter are without their scope.  No procedures are prescribed for non-taxpayers and no attempt is made to annul any of their Rights or Remedies in due course of law.  With them[non-taxpayers] Congress does not assume to deal and they are neither of the subject nor of the object of federal revenue laws.”

[Economy Plumbing & Heating v. U.S., 470 F.2d. 585 (1972) ]

The U.S. Supreme Court recognized the existence of “nontaxpayers” in South Carolina v. Regan, 465 U.S. 367, 380-381, 104 S.Ct. 1107, 1115 (1984) and Flast v. Cohen, 392 U.S. 83, 98, 88 S.Ct. 1942, 1952 (U.S.968).  Specifically, in South Carolina v. Reagan, the U.S. Supreme Court recognized that “nontaxpayers” are not constrained by any provisions within the Anti-Injunction Act.

“In holding that the Act does not bar suits by nontaxpayers with no other remedies, the Court today has created a “breach in the general scheme of taxation [that] gives an opening for the disorganization of the whole plan [.]” Allen v. Regents, 304 U.S. 439, 454, 58 S.Ct. 980, 987, 82 L.Ed. 1448 (Reed, J., concurring in the result). Non-taxpaying associations of taxpayers, and most other nontaxpayers, will now be allowed to sidestep Congress’ policy against judicial resolution of abstract tax controversies. They can now challenge both Congress’ tax statutes and the Internal Revenue Service’s regulations, revenue rulings, and private letter decisions. In doing so, they can impede *395 the process of collecting federal revenues and require Treasury to focus its energies on questions deemed important not by it or Congress but by a host of private plaintiffs. The Court’s holding travels “a long way down the road to the emasculation of the Anti-Injunction Act, and down the companion pathway that leads to the blunting of the strict requirements of Williams Packing ….” Commissioner v. Shapiro, 424 U.S. 614, 635, 96 S.Ct. 1062, 1074, 47 L.Ed.2d. 278 (1976) (BLACKMUN, J., dissenting). I simply cannot join such a fundamental undermining of the congressional purpose.”

[South Carolina v. Regan, 465 U.S. 367, 394, 104 S.Ct. 1107, 1123 (1984)]

The only statutory provision mentioned by the court that relates to “nontaxpayers” is 26 U.S.C. §7426(a), (b)(1).  That statute is insufficient to cover all adverse impacts of unlawful IRS enforcement directed against “nontaxpayers” because:

1. It does not authorize unlawful liens to be removed.

2. It does not address the relationship between a “notice of levy” and an actual levy issued by a court.  In fact, nowhere in the I.R.C is this distinction made, which imperils the property and liberty of “nontaxpayers” who are victimized by unlawful IRS enforcement actions.  A “notice of levy” and a “levy” are not the same.

A “levy” requires that property be brought into legal custody through seizure, actual or constructive, levy being an absolute appropriation in law of property levied on, and mere notice of intent to levy is insufficient.  United States v. O’Dell, 6 Cir., 1947, 160 F.2d. 304, 307.  Accord, In re Holdsworth, D.C.N.J. 1953, 113 F.Supp. 878, 888; United States v. Aetna Life Ins. Co. of Hartford, Conn., D.C.Conn. 1942, 146 F.Supp. 30, 37, in which Judge Hincks observed that he could “find no statute which says that a mere notice shall constitute a ‘levy.'” There are cases which hold that a warrant for distraint is necessary to constitute a levy.  Givan v. Cripe, 7 Cir., 1951, 187 F.2d. 225; United States v. O’Dell, supra.  The Court of Appeals for the Third Circuit state in its opinion, 221 F.2d. at page 642, “These sections [26 U.S.C. §§3690-3697] require that levy by a deputy collector be accompanied by warrants of distraint [issued by a judge in a legal proceeding].”  In re Brokol Manufacturing Co., supra.

I am constrained to conclude that a levy upon both tangible and intangible property under §3692 requires the execution of warrant for distraint and then effective only to amounts affixed thereon.  As noted above, the Court of Appeals for this Circuit declared when this matter was before it that §§3690-3697 “require that a levy by a deputy collector be accompanied by warrants of distraint.”

The distress authorized by §3690 is different from anything know to the common law, both because it authorizes sale of the property seized, and because it extends to other personality than chattels.  By its very nature it requires that demands of procedural due process of law be rigorously honored.

[Freeman v. Mayer, 152 F.Supp. 383 (1957)]

________________________________________________________________________________

This paragraph describes a mere statement or notice of claim. Nothing alleged to have been done amounts to a levy, which requires that the property be brought into legal custody through seizure, actual or constructive, levy being ‘an absolute appropriation in law of the property levied upon.’ Rio Grande R. Co. v. Gomila, 132 U.S. 478, 10 S.Ct. 155, 33 L.Ed. 400; In re Weinger, Bergman & Co., D.C., 126 F. 875, 877; Smith v. Packard, 7 Cir., 98 F. 793. Levy is not effected by mere notice. Hollister v. Goodale, 8 Conn. 332, 21 Am.Dec. 674; Meyer v. Missouri Glass Co., 65 Ark. 286, 45 S.W. 1062,67 Am.St.Rep. 927;Jones v. Howard, 99 Ga. 451, 27 S.E. 765,59 Am.St.Rep. 231.

[United States v. O’Dell, 160 F.2d. 304 (1947)]

3. 26 U.S.C. §7426(c ) requires that the assessment upon which the enforcement action is based shall be conclusively presumed to be valid.  This is problematic if the assessment was unlawful, which is most of the time.  See:

Why the Government Can’t Lawfully Assess Human Beings With an Income Tax Liability Without Their Consent, Form #05.011 http://sedm.org/Forms/FormIndex.htm

[1] Because of our disposition of the statutory issue, we need not reach the State’s contention that application of the Act to bar this suit would unconstitutionally restrict this Court’s original jurisdiction.

[2] A “friendly donor” suit is a suit in which a donor claims that his contributions to an organization should be tax deductible because the organization’s tax-exempt status had been revoked improperly.

[3] In Americans United, the IRS had revoked the organization’s §501(c)(3) status, but found that it was eligible for §501(c)(4) status. Although the organization’s income remained tax exempt, “the effect of this change in status was to render respondent liable for unemployment (FUTA) taxes under the Code § 3301, 26 U.S.C. §3301, and to destroy its eligibility for tax deductible contributions under § 170.” 416 U.S., at 755, 94 S.Ct., at 2056 (footnote omitted).

[4] Unlike Justice O’CONNOR, we do not believe that Congress’s concerns with judicial interference overrode all other concerns. This case is difficult because it implicates Congress’s concern with providing remedies as well as its concern with limiting remedies.

[5] Any dicta in Bob Jones suggesting that, prior to the enactment of the Tax Lien Act, the Anti-Injunction Act barred suits by third parties claiming that a federal tax lien impaired their property rights may be disregarded. 416 U.S., at 732 n. 6, 94 S.Ct., at 2044 n. 6. The Anti-Injunction Act had been widely construed not to apply to such actions. See, e.g., Campbell v. Bagley, 276 F.2d. 28 (CA5 1960); Tomlinson v. Smith, 128 F.2d. 808 (CA7 1942); American Bar Association, Final Report of the Committee on Federal Liens, at 48, 116, reprinted in Hearings before the Committee on Ways and Means on H.R. 11256 and H.R. 11290, House of Representatives, 89th Cong., 2d Sess. (1966).

[6] Section 110(a) provides in pertinent part:

“If a levy has been made on property or property has been sold pursuant to a levy, any person (other than the person against whom is assessed the tax out of which such levy arose) who claims an interest in or lien on such property and that such property was wrongfully levied upon may bring a civil action against the United States in a district court of the United States.”

[7] In Bob Jones, we held that the 1966 amendment did not merely limit the remedies of third parties challenging federal tax liens. Rather, the amendment was also intended as a reaffirmation of the plain language of the Act. 416 U.S., at 732 n. 6, 94 S.Ct., at 2044 n. 6. In that sense, we found the statute to be “declaratory” rather than “innovative.” Ibid. Because the Act, as originally enacted, did not cover third parties who were not given an alternative action in which to press their claims, our construction of the 1966 amendment in Bob Jones is entirely consistent with our holding today.

[8] As the Secretary notes, I.R.C. § 7478 does not provide plaintiff with an action in which he may contest the constitutionality of § 310(b)(1). That section permits the Tax Court to, “make a declaration whether … prospective obligations are described in section 103(a).” The issue in this case involves the constitutionality of section 310(b)(1), not whether the bonds that the State desires to issue are “described in section 103.” Therefore, § 7478 does not provide the State with an alternative procedure to contest the legality of section 310(b)(1).

[9] It is not irrelevant that the IRS routinely audits the returns of taxpayers who litigate claims for refunds. Department of the Treasury, Chief Counsel’s Directives Manual (35)(17)50.

[10] Justice O’CONNOR suggests that our holding today will enable taxpayers to evade the Anti-Injunction Act by forming organizations to litigate their tax claims. Post, at 1111 , 1115. We disagree. Because taxpayers have alternative remedies, it would elevate form over substance to treat such organizations as if they did not possess alternative remedies. Accordingly, such organizations could not successfully argue that the Act does not apply because they are without alternative remedies.

[11] See infra, at 1120 – 1122 (describing some exceptions); see also 26 U.S.C. §§ 6694(c), 7429(b).

[12] Non-taxpaying associations of taxpayers and nontaxpayer organizations previously have attempted to avoid the congressional policy against judicial resolution of abstract tax controversies. See, e.g., Investment Annuity, Inc. v. Blumenthal, 609 F.2d. 1 (CADC 1979) (insurers seeking declaration that certain investment annuity contracts are eligible for favorable tax treatment); Educo, Inc., v. Alexander, 557 F.2d. 617 (CA7 1977) (company engaged in designing and administering educational benefit plans for corporate employees sues to protect its clients’ tax benefits); Cattle Feeders Tax Committee v. Shultz, 504 F.2d. 462 (CA10 1974) (unincorporated association representing participants in tax shelter cattle feed program seeking injunction to prevent Treasury from disallowing certain year-end deductions); McGlotten v. Connally, 338 F.Supp. 448, 453 n. 25 (DC 1972) (nontaxpayer challenge to tax-exempt status of racially discriminatory fraternal organization), disapproved in Bob Jones University v. Simon, 416 U.S. 725, 732, and n. 6, 94 S.Ct. 2038, 2044, and n. 6, 40 L.Ed.2d. 496 (1974).

[13] See Act of Mar. 2, 1867, § 10, 14 Stat. 475.

[14] The Act was introduced on March 1, 1867, by Mr. Fessenden, Chairman of the Senate Committee on Finance, as an amendment to a section which made a taxpayer appeal to the Commissioner of Internal Revenue a condition precedent to suit for the recovery of taxes. See Congressional Globe, 39th Cong., 2d Sess., pt. III, p. 1933 (proposing amendment to the Act of July 13, 1866, ch. 184, § 19, 14 Stat. 152, presently codified at 26 U.S.C. § 6532(a). The House initially objected to this amendment, see Congressional Globe, supra, p. 1949, but the Senate would not recede, id., at 1950. After a conference, the House agreed to the amendment. See id., at 1968. No other recorded legislative history has been uncovered. See Note, Enjoining the Assessment and Collection of Federal Taxes Despite Statutory Prohibition, 49 Harv.L.Rev. 109, and n. 9 (1935).

[15] The circumstances of the enactment do not, as the Court suggests, see ante, at 1111 – 1112, indicate that Congress meant to prohibit injunctions only where the statutory scheme provided an alternative remedy. Rather, “[s]ince equitable principles militating against the issuance of federal injunctions in tax cases existed independently of the Anti-Injunction Act, it is most unlikely that Congress would have chosen the stringent language of the Act if its purpose was merely to restate existing law and not to compel litigants to make use solely of the avenues of review opened by Congress.” Bob Jones University v. Simon, supra, 426 U.S., at 742-743, n. 16, 94 S.Ct., at 2048-2049, n. 16. “ ‘Enacted in 1867, [the Anti-Injunction Act], for more than sixty years, [was] consistently applied as precluding relief, whatever the equities alleged.’ ” Id., at 745, n. 18, 94 S.Ct., at 2050, n. 18 (quoting Miller v. Standard Nut Margerine Co., 284 U.S. 498, 511, 52 S.Ct. 260, 264, 76 L.Ed. 422 (1932) (Stone, J., dissenting)).

[16] In the revised statutes, the term “any” was added so that the statute read: “No suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court.” Snyder v. Marks, 109 U.S. 189, 192, 3 S.Ct. 157, 159, 27 L.Ed. 901 (1883).

[17] I am at a complete loss to understand the Court’s assertion that the “language added to the Anti-Injunction Act by the 1966 amendment is … largely irrelevant to the issue before us today.” Ante, at 1114. This conclusion follows only if the Court begins with a premise that it need pay no attention to either the 1966 amendment’s language or its legislative history.

[18] Section 7478 does not directly apply to this case because it permits the Tax Court only to “make a declaration whether … prospective obligations are described in section 103(a).” The issue in this case involves the constitutionality of § 310(b)(1), not whether the bonds South Carolina desires to issue are “described in section 103.” Nevertheless, § 7478 demonstrates that Congress believed that, prior to the enactment of that section, prospective issuers had no means to determine whether the interest on their bonds would be tax exempt. See S.Rep. No. 95-1263, pp. 150-151 (1978).

[19] Our cases make clear that the constitutional nature of a challenge to a tax, as distinct from its probability of success, is of no consequence under the Anti-Injunction Act. See Alexander v. “Americans United” Inc., 416 U.S. 752, 759, 94 S.Ct. 2053, 2057, 40 L.Ed.2d. 518 (1974); Bailey v. George, 259 U.S. 16, 20, 42 S.Ct. 419, 420, 66 L.Ed. 816 (1922); Dodge v. Osborn, 240 U.S. 118, 121, 36 S.Ct. 275, 276, 60 L.Ed. 557 (1916). Congress can be presumed to have had knowledge of those cases when it amended the Act in 1966 and in later years when it passed related legislation. See Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Curran, 456 U.S. 353, 382, and n. 66, 102 S.Ct. 1825, 1841, and n. 66 (1982); Lorillard v. Pons, 434 U.S. 575, 580-581, 98 S.Ct. 866, 870, 55 L.Ed.2d. 40 (1978).

[20] The Williams Packing exception is not applicable in this case. Though South Carolina’s Tenth Amendment and intergovernmental tax immunity claims are serious ones, we cannot say that there are no circumstances under which the Government could prevail. Thus, even if § 310(b) would cause the State irreparable injury, South Carolina could not rely on the Williams Packing exception to invoke a court’s authority to review.

[21] Taxing measures inevitably have a pecuniary impact on nontaxpayers who are linked to the persons against whom a tax is imposed. This Court has held that the indirect impacts of a tax, no matter how detrimental, generally do not invade any interest cognizable under the Due Process Clause. See, e.g., Bob Jones University v. Simon, supra (indirect impact on charitable organization); United States v. American Friends Service Committee, 419 U.S. 7, 95 S.Ct. 13, 42 L.Ed.2d. 7 (1974) ( per curiam ) (indirect impact on First Amendment interests of employees). There is no occasion here to address when, if ever, such indirect impacts would implicate Due Process concerns if no judicial review of the complaining party’s direct tax liabilities would ultimately be available. Cf. Bob Jones University v. Simon, supra, 416 U.S., at 747-748, 94 S.Ct., at 2051 (discussing powerful governmental interests); Investment Annuity, Inc. v. Blumenthal, 609 F.2d. 1, 7-10 (CADC 1979) (indirect impact on nontaxpaying business does not implicate Due Process Clause even though no judicial review otherwise available).

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