Bruce Perlowin v. Michael D. Sassi, District Director of Internal Revenue, San Francisco, California, and United States of America

Taxpayer brought this action seeking to have a termination assessment decision declared invalid and to have the Internal Revenue Service enjoined from enforcing the assessment. The district court declared the assessment invalid, restrained the IRS from attempting any further collections pursuant to the assessment and ordered return of all seized assets. Perlowin v. Sassi, 544 F.Supp. 89 (N.D.Cal.1982).

The relevant facts are set out in the district court’s opinion. We hold that the district court correctly interpreted the statutes. The court failed, however, to apply the equity standards for injunctive relief. We reverse and remand for further proceedings.

ISSUE

DISCUSSION

A. Jurisdiction.

The IRS argues that this action is barred by the Anti-Injunction Act, 26 U.S.C. § 7421 (a), and the Declaratory Judgment Act, 28 U.S.C. § 2201 . We agree with the district court that a statutory exception to the Anti-Injunction Act applies to this case.

Suits to enjoin the assessment of a deficiency are allowed if the taxpayer has not been mailed a notice of deficiency and afforded the opportunity for review in the Tax Court. 26 U.S.C. § 6213 (a). The exception does not usually apply to…