218 F. Supp. 668 | D. Minnesota | 1963
This is an action against the District Director of Internal Revenue to enjoin him from collecting a tax and for other related relief. The plaintiff was an officer and shareholder in a corporation
The defendant has moved to dismiss the plaintiff’s Complaint, relying upon Section 7421(a) of the Internal Revenue Code which provides:
“Except as provided in sections 6212(a) and (c), and 6213(a), no suit for the purpose of restraining the assessment or collection of any tax shall be maintained in any court.”
The plaintiff argues that the previous section is inapplicable here, for the tax imposed by Section 6672 is penal in nature and thus is a penalty rather than a tax. Arguments similar to the plaintiff’s were recently rejected by the Second Circuit in a case which is precisely parallel to the one at bar. Botta v. Scanlon, 314 F.2d 392 (2d Cir.1963). The Court there noted that the authorities are unanimous in support of the view that suits to restrain the collection of assessments under Section 6672 are prohibited for the reason that the assessment imposed by Section 6672 is “simply a means for insuring that the tax is paid” and is not a criminal penalty. The Court there noted that a showing of irreparable injury was insufficient to overcome the barrier of Section 7421(a), citing the recent case of Enochs v. Williams Packing & Navigation Co., 370 U.S. 1, 82 S.Ct. 1125, 8 L.Ed.2d 292 (1960).