## Facts

- Elliot A. Sokolow and his then-spouse made three estimated federal income tax payments for 1988 totaling $52,650.
- The couple later filed separate 1988 returns; Sokolow reported $41,366 in tax liability, claimed a credit for half of the estimated payments ($26,325), and paid $5,129 with the return.
- The IRS recalculated Sokolow’s liability at $41,911.59 but mistakenly credited his account with the full $52,650 (less $526.50 already credited to his spouse), and issued Sokolow a $26,183.57 refund.
- Sokolow’s former spouse reported zero 1988 liability, claimed a refund of the full $52,650, and later won a refund judgment entitling her to that amount.
- After the spouse’s judgment, the IRS removed credits from Sokolow’s account and began collecting the remaining 1988 balance; it also applied Sokolow’s 1993 and 1994 refunds (totaling $2,315) to the 1988 liability.
- Sokolow sued to enjoin IRS collection, abate the asserted tax due, and recover the intercepted later-year refunds.
- The district court dismissed for lack of subject-matter jurisdiction under the Anti-Injunction Act, and Sokolow appealed.

## Issues

1. Whether the Anti-Injunction Act, 26 U.S.C. § 7421(a), barred jurisdiction over a suit seeking to enjoin IRS collection activity, abate assessed tax, and recover later-year refunds applied to the disputed liability.
2. Whether the taxpayer qualified for the judicial exception recognized in *Enochs v. Williams Packing & Navigation Co.* permitting injunctive relief in limited circumstances.

## Decision

- The Ninth Circuit affirmed the dismissal for lack of subject-matter jurisdiction.
- The court held the action was a suit “for the purpose of restraining the assessment or collection” of a tax within 26 U.S.C. § 7421(a).
- The court held Sokolow did not satisfy the Williams Packing exception because he had an adequate legal remedy through the refund-suit process and it was not clear that the government could not prevail under any circumstances.

## Legal Principles

- The Anti-Injunction Act generally precludes suits that would restrain federal tax assessment or collection; taxpayers must ordinarily pursue post-payment remedies (including refund litigation).
- The Williams Packing exception applies only if (1) the taxpayer lacks an adequate remedy at law and (2) under no circumstances could the government ultimately prevail on the merits.
- Arguments that collection is time-barred, or that refund litigation may limit available defenses, do not by themselves establish the lack of an adequate legal remedy for purposes of avoiding the Anti-Injunction Act.

## Conclusion

The court held that the Anti-Injunction Act required Sokolow to contest the disputed liability through the refund-suit framework rather than an injunction halting collection, and it affirmed dismissal because the narrow Williams Packing exception was not satisfied.


Sokolow v. United States, 169 F.3d 663 (9th Cir. 1999)