Tax Anti-Injunction Act Law and Legal Definition
The Tax Anti-Injunction Act is a U.S. federal law enacted in 1867. The Act prohibits a person from filing a lawsuit that restrains the assessment or collection of tax. Accordingly, a person is permitted to file a lawsuit only after making the tax payments. The objects of the act are:
1. efficient and expeditious collection of taxes with a minimum pre-enforcement judicial interference; an
2. protection of the tax collectors from litigation pending a refund suit.
This Act is codified at 26 USCS § 7421
The Act is based on the Flora full payment rule. According to the rule, a person resisting the assessment of a 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 the government from assessing the tax, but will entertain a suit for a tax refund after the IRS has denied the refund claim, or six months have elapsed since the filing of the claim, whichever is earlier. The United States Supreme Court developed this rule in Flora v. United States, 357 U.S. 63 (U.S. 1958).
