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# 6-5.000 - Civil Tax Case Responsibility

6-5.010 | Introduction
6-5.100 | Parallel Proceedings
6-5.110 | Affirmative Litigation—Tax Collection Suits
6-5.120 | Affirmative Litigation—Other Enforcement Suits
6-5.130 | Affirmative Litigation—United States' Intervention in Court Actions to Enforce Tax Lien
6-5.140 | Affirmative Litigation—Ex Parte Order for Entry to Effect Levy
6-5.200 | Summons Litigation—Allocation of Responsibility
6-5.210 | Summons Litigation—Exceptions to Direct Referrals
6-5.220 | Summons Litigation—Commencement of a Summons Enforcement Proceeding
6-5.230 | Summons Litigation—Petitions to Quash or Enjoin IRS Summonses Issued to Third Parties
6-5.240 | Summons Litigation—Prosecution Under 26 U.S.C. § 7210
6-5.250 | Summons Litigation—Appeals
6-5.300 | Actions Under 28 U.S.C. § 2410—Allocation of Responsibilities in Quiet Title, Foreclosure, and Interpleader Cases
6-5.310 | Actions Under 28 U.S.C. § 2410—Removal from State Courts—Early Determination Required
6-5.320 | Actions Under 28 U.S.C. § 2410—Nature of the Suit
6-5.330 | Actions Under 28 U.S.C. § 2410—Coordination Procedures
6-5.400 | Suits Against the United States or Its Officers and Employees—Generally
6-5.410 | Tax Refund Suits/Petitions for Readjustment
6-5.415 | Enforcement and Defense of Suits Regarding FBAR Penalties
6-5.420 | Actions to Enjoin Tax Assessment or Collection
6-5.430 | Declaratory Judgment Actions with Respect to Federal Taxes
6-5.440 | Jeopardy and Termination Assessment Cases
6-5.445 | Suits Contesting IRS Certification of Delinquency for Passport Revocation Purposes
6-5.450 | Suits Under the Freedom of Information Act and the Privacy Act of 1974
6-5.460 | Damage suits under Bivens or Tort Theories
6-5.470 | "Wrongful Disclosure" Suits Against the United States
6-5.480 | "Wrongful Collection" Suits Against the United States
6-5.490 | Subpoenas Served on Employees of the Internal Revenue Service
6-5.500 | Suits Involving Governmental Immunity from State and Local Taxes
6-5.600 | Claims of the United States in Bankruptcy, Receivership, Probate, and Insolvency Proceedings—Generally
6-5.610 | Bankruptcy Cases—Allocation of Responsibility
6-5.611 | Bankruptcy Cases—Contested Matters and Adversary Proceedings
6-5.612 | Bankruptcy Cases—Appeals from Bankruptcy Court Decisions
6-5.630 | Receivership Proceedings
6-5.640 | Probate Proceedings
6-5.650 | Insolvency Proceedings
6-5.700 | Appeals in Tax Matters—Generally
6-5.710 | Appeals in Tax Matters—Taxpayer (or Other Party) Appeal
6-5.720 | Appeals in Tax Matters—Adverse or Partially-Adverse Decisions
6-5.730 | Appeals in Tax Matters—Government Filing of a Notice of Appeal
6-5.740 | Appeals in Tax Matters—When the Solicitor General Approves an Appeal
6-5.750 | Appeals in Tax Matters—When the Solicitor General Declines to Appeal
6-5.800 | Applications for Attorneys' Fees and Litigation Expenses

### 6-5.010 - Introduction

The Tax Division's six geographic Civil Trial Sections supervise or handle civil tax litigation in the United States district courts and the state courts. These Civil Trial Sections are generally responsible for cases that arise within their respective geographic areas. In addition, the Civil Trial Sections for the Central, Eastern, and Southern Regions have nationwide jurisdiction over certain cases of special interest. For a map reflecting the geographical assignments of the Tax Division Civil Trial Sections, and contact information, see https://www.justice.gov/tax/civil-trial-sections-geographical-map. See also JM 6-1.120. A seventh Civil Trial Section, the Court of Federal Claims Section, practices exclusively in the United States Court of Federal Claims.

Ordinarily, the United States Attorney’s Office has trial responsibility in cases arising under 28 U.S.C. § 2410 (except for actions raising tax protest or substantive tax issues, and interpleader litigation); in routine summons enforcement cases and petitions to quash; and in bankruptcy litigation as described below, whether that results from a direct referral from the IRS or a referral from the Tax Division.

At the request of a United States Attorney’s Office, the Tax Division trial attorney will advise the United States Attorney’s Office of any appearance in the district and/or forward to any Assistant United States Attorney who is counsel of record copies of all documents sent to opposing counsel. The United States Attorney’s Office should immediately forward to the assigned Tax Division trial attorney copies of all documents that it receives if such communication does not indicate service on the trial attorney. The United States Attorney’s Office should also advise the Tax Division trial attorney of any informal information received that may have a bearing on the just disposition of the case. In those civil matters that the Tax Division assigns to the United States Attorney’s Office, the United States Attorney’s Office will be responsible for the entire trial-level proceeding.

The United States Attorney’s Office also should keep the Tax Division advised in the manner set forth in this Manual. In situations where the Division has requested immediate notification, the United States Attorney’s Office should notify the Chief of the appropriate Civil Trial Section by email, telephone, fax, or overnight delivery. See https://www.justice.gov/tax/civil-trial-sections-geographical-map for section contact information. See also JM 6-1.120.

The Assistant Attorney General, Tax Division, reserves the prerogative to reassign any civil tax case within the jurisdiction of the Tax Division notwithstanding the provisions of this manual.

[updated February 2018]

### 6-5.100 - Parallel Proceedings

See 6-4.440, Parallel Proceedings.

[added February 2018]

### 6-5.110 - Affirmative Litigation—Tax Collection Suits

The Tax Division brings tax collection suits, including as cross-claims or counterclaims, at the request of the IRS, pursuant to 26 U.S.C. § 7401. Tax Division attorneys usually handle suits in which the government seeks to

- reduce to judgment assessments for unpaid federal taxes
- foreclose federal tax liens
- petition for judicial approval for seizure of a principal residence, as required by 26 U.S.C. § 6334(e)
- recover erroneous tax refunds pursuant to 26 U.S.C. § 7405
- obtain judgment against a person who failed to honor an internal revenue levy pursuant to 26 U.S.C. § 6332(d)(1)
- set aside a fraudulent conveyance
- obtain a judgment against a transferee
- obtain a judgment under 26 U.S.C. § 3505 for unpaid taxes against a person who provided net payroll financing
- take other necessary legal actions to collect outstanding federal taxes, including suits brought with reference to the Federal Priority Statute, 31 U.S.C. § 3713
- defend or bring actions under 31 U.S.C. § 3711(g)(4)(C) concerning FBAR penalties imposed for failure to report an interest in a foreign financial institution as required by 31 U.S.C. § 5314 and its implementing regulations

[updated February 2018] [cited in JM 6-2.000]

### 6-5.120 - Affirmative Litigation—Other Enforcement Suits

The Tax Division also brings other affirmative non-collection actions and claims seeking judicial assistance in enforcing the internal revenue laws. Such proceedings may include suits to

- enjoin tax return preparers under 26 U.S.C. §§ 7402, 7407, and/or 7408
- enjoin abusive scheme promoters under 26 U.S.C. § 7408
- enjoin employers from pyramiding employment taxes or taxpayers from failing to pay estimated taxes, under 26 U.S.C. § 7402
- expunge so-called "common law liens" filed against IRS or other government personnel, also under 26 U.S.C. § 7402
- seeking a writ ne exeat

Tax Division attorneys will handle these proceedings.

[updated February 2018]

### 6-5.130 - Affirmative Litigation—United States' Intervention in Court Actions to Enforce Tax Lien

The United States may intervene in a civil action to assert a federal tax lien on property that is the subject of the action. See 26 U.S.C. § 7424. Where the United States intervenes in a state court action, it has the same right of removal as in cases where it is named a party to an action under 28 U.S.C. § 2410(a).

If, under emergency circumstances, IRS counsel requests the United States Attorney’s Office to take immediate action to intervene in a pending action, the United States Attorney’s Office should not move to intervene until the Chief of the appropriate Civil Trial Section has approved the intervention.

[updated February 2018] [cited in JM 6-2.000]

### 6-5.140 - Affirmative Litigation—Ex Parte Order for Entry to Effect Levy

The IRS must obtain a warrant before entering constitutionally protected premises (including opening a bank safe deposit box) to seize property for the payment of taxes. The IRS will directly refer these cases to the United States Attorney’s Office.

IRS counsel will assist the United States Attorney’s Office in preparing the pleadings—which, depending on local practice, will include an ex parte application, affidavit or declaration from the IRS revenue officer, and proposed order—for the United States Attorney’s Office to review and submit to the United States District Court.

After receiving a referral from IRS counsel, the United States Attorney’s Office should expeditiously review the material to determine whether it meets the legal standard for obtaining an order for entry to effect levy, including making an independent determination that the taxpayer is, indeed, recalcitrant, and that the revenue officer has been unable to gain voluntary admittance to the property for purpose of seizure. The United States Attorney’s Office should assure that the revenue officer's affidavit or declaration is complete and accurate, and ascertain whether the case has any unusual features that may lead to denial of the writ.

[updated February 2018]

### 6-5.200 - Summons Litigation—Allocation of Responsibility

Either IRS counsel or the Tax Division will refer to the United States Attorney’s Office routine requests to enforce most administrative summonses and to defend routine petitions to quash brought under 26 U.S.C. § 7609. The latter may also include a request to enforce the summons(es) pursuant to 26 U.S.C. § 7609(b)(2)(A). In summons actions that the IRS directly refers to the United States Attorney’s Office, the United States Attorney’s Office need not obtain Tax Division authorization prior to instituting court proceedings or seeking the enforcement of a summons in response to a petition. The United States Attorney’s Office must obtain prior Tax Division authorization, however, if a summons involves sensitive or novel issues, as described below (JM 6-5.210), or if the United States Attorney’s Office seeks to use the attachment authority of 26 U.S.C. § 7604(b). See JM 6-5.240.

The Appellate Section of the Tax Division will handle all appeals, whether the United States or the other party initiates it. JM 6-5.250. The United States Attorney’s Office should notify the Chief of the appropriate Civil Trial Section if a court renders an adverse decision or another party files a notice of appeal.

[updated February 2018 ] [cited in JM 6-2.000]

### 6-5.210 - Summons Litigation—Exceptions to Direct Referrals

The Tax Division will handle summons cases involving sensitive or novel issues, including summonses issued to or involving:

- attorneys
- tax practitioners, as defined in 26 U.S.C. § 7525
- any entity operated exclusively for religious purposes (see 26 U.S.C. § 501(c)(3))
- the press or members of the news media (see 28 C.F.R. § 50.10 (setting out Department policy regarding obtaining information from, or records of, members of the news media))
- tax accrual workpapers
- foreign document requests
- treaty partners or other matters with international implications
- “John Doe” summonses
- section 6050I
- novel or complex Fifth Amendment claims
- computer software and other non-traditional items
- state and local agencies and courts
- “designated summonses”
- consent directives
- tax shelter promoters
- tax scheme and scam promoters
- examinations regarding institution of summons proceedings
- examinations into potential liabilities for penalties under 26 U.S.C. §§ 6700, 6701, 6707, and 6708
- offshore records
- FBAR penalties under 31 U.S.C. § 5314
- other unique issues that may arise

The IRS will also refer to the Tax Division petitions to quash foreign document requests issued under 26 U.S.C. § 982. Litigation relating to these requests is similar to summons litigation.
The Tax Division may also refer to the United States Attorney’s Office for handling a summons that the IRS counsel has referred to the Tax Division. See Summons Enforcement Manual, https://www.justice.gov/tax/foia-library .

[updated February 2018]

### 6-5.220 - Summons Litigation—Commencement of a Summons Enforcement Proceeding

Summons enforcement proceedings are summary in nature. The Government commences the proceeding when it files a petition, a declaration of the examining/investigating agent, and a proposed order to show cause why the court should not enforce the summons. See Summons Enforcement Manual, https://www.justice.gov/tax/foia-library . IRS counsel usually will prepare and forward the pleadings to the United States Attorney’s Office along with the request for enforcement.

The Government ordinarily relies on the court's Order to Show Cause to compel the summoned person to appear in court for the summons-enforcement hearing. The Government very rarely seeks the arrest of a summoned person under the attachment authority of 26 U.S.C. § 7604(b) to obtain his appearance at the summons-enforcement hearing. The United States Attorney’s Office may not utilize the attachment authority of 26 U.S.C. § 7604(b) unless the Chief of the appropriate Civil Trial Section authorizes this action in writing. An attachment under 26 U.S.C. § 7604(b) should not be confused with the arrest of the summoned person after a judicial finding and order of contempt for failing to comply with a court order enforcing the summons. No prior authorization is needed to seek arrest and confinement pursuant to an order of contempt.

[updated February 2018] [cited in JM 6-2.000]

### 6-5.230 - Summons Litigation—Petitions to Quash or Enjoin IRS Summonses Issued to Third Parties

Unless certain exceptions apply, the IRS must give notice to the taxpayer and other persons to whom the records relate (“noticee”) when it issues a summons to a third party. 26 U.S.C. § 7609. See 26 U.S.C. § 7609(c)(2) (setting out exceptions, including summonses “issued in aid of the collection of” the tax liability). The noticee then may petition to quash a third party's compliance with the summons by commencing a proceeding in the appropriate district court. The petition must be filed within 20 days of the date on which notice is given, by mailing a copy of the petition to the third party and to the IRS office designated in the notice. The procedural rules pertaining to a petition to quash are jurisdictional. When a petitioner fails to follow these provisions meticulously, the United States Attorney’s Office should file a motion to dismiss. See Summons Enforcement Manual, https://www.justice.gov/tax/foia-library.

A proceeding to quash is a civil action that is subject to the normal filing fee and to the provisions of Federal Rule of Civil Procedure 4 relating to service of a summons and complaint. Pursuant to Federal Rule of Civil Procedure 12(a)(3), the United States has 60 days to respond to the initial pleading. Since the filing of a petition to quash under 26 U.S.C. § 7609 stays compliance with the summons, the United States Attorney’s Office best serves the Government’s interest by filing a response expeditiously.

After receiving a petition to quash, the United States Attorney’s Office should send a copy to the IRS counsel, who will determine whether the Government should seek to enforce the summons in federal court. If it is determined that the summons is defective, IRS counsel may direct the IRS to withdraw the summons and, in turn, request that the United States Attorney’s Office ask the petitioner to withdraw the petition or ask the court to dismiss it as moot. If the petition appears to raise sensitive or novel issues, the United States Attorney’s Office should also send a copy to the Chief of the appropriate Civil Trial Section. See JM 6-5.210.

[updated February 2018] [cited in JM 9-105.750]

### 6-5.240 - Summons Litigation—Appeals

The Appellate Section of the Tax Division handles all appeals in all tax cases, whether or not adverse to the Government, including summons cases. See JM 6-5.700, et seq. The Assistant Attorney General of the Tax Division must approve exceptions to this policy.

The United States Attorney’s Office should immediately notify the local IRS counsel and the Chief of the appropriate Civil Trial Section of all adverse decisions, and of an adverse party's notice of appeal or cross-appeal. The Tax Division treats a court’s limited enforcement of a summons as an adverse decision. See JM 6-5.710.

[updated February 2018]

### 6-5.250 - Summons Litigation—Appeals

The Appellate Section of the Tax Division handles all appeals in all tax cases, whether or not adverse to the Government, including summons cases. See JM 6-5.700, et seq. The Assistant Attorney General of the Tax Division must approve exceptions to this policy.

The United States Attorney’s Office should immediately notify the local IRS counsel and the Chief of the appropriate Civil Trial Section of all adverse decisions, and of an adverse party's notice of appeal or cross-appeal. The Tax Division treats a court’s limited enforcement of a summons as an adverse decision. See JM 6-5.710.

[updated February 2018]

### 6-5.300 - Actions Under 28 U.S.C. § 2410—Allocation of Responsibilities in Quiet Title, Foreclosure, and Interpleader Cases

The United States Attorney’s Office handles most suits under 28 U.S.C. § 2410. The Tax Division, however, handles suits under § 2410 for interpleader or in the nature of interpleader; quiet title actions raising nominee, alter ego, and transferee issues; actions raising tax protest issues; and actions that raise substantive tax issues. The United States Attorney’s Office should refer these cases to the Chief of the appropriate Civil Trial Section.

If the IRS authorizes a cross-claim or counterclaim to enforce liens on property at issue in a § 2410 action, the Tax Division will handle the action.

For a discussion of the authority delegated to the United States Attorneys’ Offices to accept applications to release the United States' right of redemption under 28 U.S.C. § 2410, see JM 6-6.700.

A Tax Division attorney handling related litigation may also handle a foreclosure or other matter that the United States Attorney’s Office otherwise would have handled.

[updated February 2018]

### 6-5.310 - Actions Under 28 U.S.C. § 2410—Removal from State Courts – Early Determination Required

Most cases brought under 28 U.S.C. § 2410 are filed in state court. The Government may remove these cases to the United States district court within 30 days. See 28 U.S.C. § 1444. The 30-day period begins on the date the plaintiff properly serves the United States, not on the date the Government receives pleadings unaccompanied by formal process. See 28 U.S.C. § 1446(b); Murphy Brothers, Inc. v. Michetti Pipe Stringing, Inc., 526 U.S. 344 (1999). An early determination of United States Attorney or Tax Division responsibility for handling the case should be made so that a timely notice of removal can be filed. Additionally, although the Government is afforded 60 days from service on the United States Attorney to answer or otherwise respond to a § 2410 action, the general rule is that a party must file a responsive pleading within seven days of removal. Thus, in conjunction with removal, attorneys should consider making a motion to extend the time to file a responsive pleading. See 28 U.S.C. § 2410(b), Fed. R. Civ. P. 12(a)(2), Fed. R. Civ. P. 81(c).

The Tax Division frequently removes a § 2410 case that it is handling, particularly when the case involves a substantial sum of money or turns on application of federal law, or where the purpose of the suit is to interfere with internal revenue procedures (as in actions raising tax protest issues). The Tax Division may, from time to time, contact the United States Attorney’s Office either to request assistance with removal or to discuss whether a case merits removal.

[updated February 2018]

### 6-5.320 - Actions Under 28 U.S.C. § 2410—Nature of the Suit

Under 28 U.S.C. § 2410, the United States consents to be sued in a federal or state court having jurisdiction of the subject matter in cases involving real or personal property on which the United States has or claims a mortgage or other lien. The consent is limited to suits that seek to quiet title; foreclose a mortgage or other lien; partition or condemn the property; interpleader suits; and suits in the nature of interpleader. This waiver of sovereign immunity requires strict compliance with the conditions specified in § 2410 as a jurisdictional prerequisite for suit. The United States has sixty days in which to plead.

When a judicial sale is held, the tax lien of the United States is discharged, provided the United States has received proper notice. The United States then may redeem the realty sold within 120 days from the date of sale, or within a longer period as allowed under local law. See 26 U.S.C. § 7425(d)(1). Congress has authorized a revolving fund for this purpose. 28 U.S.C. § 7810. Title 28 U.S.C. § 2410(d) establishes the amount that the United States must pay to exercise its right of redemption for either sales under 28 U.S.C. § 2410(c) or sales in foreclosure. The United States Attorney’s Office should provide the local IRS counsel with information received during the course of § 2410 litigation so that the IRS may make an informed redemption decision. Should the IRS determine that additional information is needed, it may request the assistance of the United States Attorney’s Office in obtaining that information.

[updated February 2018]

### 6-5.330 - Actions Under 28 U.S.C. § 2410—Coordination Procedures

1. Notice to Tax Division and IRS. In § 2410 actions that fall within the responsibility of the United States Attorney, the United States Attorney should ask the appropriate local IRS counsel to provide the information necessary to prepare an answer. The United States Attorney need not forward the summons and complaint to the Tax Division, or correspond with the Tax Division about these cases at all, unless a party submits a settlement offer, an appellate issue arises, or case assistance is needed. Please direct any questions to the Chief of the appropriate Civil Trial Section.
2. Settlement Offer. A settlement offer that is made in a case being handled by the United States Attorney’s Office should be promptly submitted to the Chief of the appropriate Civil Trial Section, with the United States Attorney’s Office’s recommendation and sufficient supporting data. At the same time, the United States Attorney’s Office should forward a copy of the settlement offer, together with a copy of the complaint, to the local IRS counsel. See Tax Division Directive 139, located in 28 C.F.R. Pt. O, Subpt. Y, App., “Redelegation of Authority to Compromise and Close Civil Claims.” This procedure does not apply to applications for release of the Government’s right to redemption for which, in certain cases, the Tax Division has delegated authority to the United States Attorney’s Office. See Tax Division Directive 83, located in 28 C.F.R. Pt. O, Subpt. Y, App., “Redelegation of Authority to Release Rights of Redemption in Certain Cases” (discussed at JM 6-6.700).
3. Appeal. If another party to the proceeding takes an appeal, the United States Attorney’s Office should promptly advise the Chief of the appropriate Civil Trial Section and explain the applicable time limitation. If a court renders a decision adverse to the Government on an issue that the United States Attorney’s Office has contested, the United States Attorney’s Office should submit an appeal recommendation with sufficient information to enable the Tax Division to evaluate the appropriateness of appeal. Until the Department makes a final decision regarding whether the Government should appeal, the United States Attorney’s Office should take all necessary steps to protect the Government's interest, including filing a notice of appeal and preparing the record on appeal.
4. Lien Priority. The priority of the federal tax lien is governed by section 6323 of the Internal Revenue Code (26 U.S.C.) in most § 2410 cases. Should any interpretative problems arise concerning the priority accorded to the tax lien, the United States Attorney’s Office should contact the Chief of the appropriate Civil Trial Section or the local IRS counsel.
5. Closing. The United States Attorney’s Office should notify the appropriate local IRS counsel when a case is closed.

[updated February 2018]

### 6-5.400 - Suits Against the United States or Its Officers and Employees—Generally

When served with a summons and complaint in a suit involving the internal revenue laws or otherwise connected with tax administration, the United States Attorney should forward a copy of the summons and complaint to the Chief of the appropriate Civil Trial Section and to the local IRS counsel, except as provided in JM 6-5.330 (relating to § 2410 cases). If the court sets an expedited hearing or otherwise requires the Government to respond in fewer than 60 days from the date of service on the United States Attorney, the United States Attorney’s Office should contact the Chief of the appropriate Civil Trial Section immediately and arrange to provide the relevant papers as quickly as possible.

If a person brings a suit involving the internal revenue laws or otherwise connected with tax administration in a state court and names the United States or a federal officer or employee or federal governmental entity as a party, an early determination of United States Attorney or Tax Division responsibility for handling the case should be made so that a timely removal can be filed. Additionally, the Government generally must file a responsive pleading within seven days of removal unless a motion is made to extend the time to the original 60 days from the date of service on the United States Attorney. Fed. R. Civ. P. 81(c). In any suit purporting to involve the internal revenue laws but in which the person has not named either the United States or a federal officer or employee or federal governmental entity as a party (such as a person's suit against an employer), the United States Attorney should not become involved in any manner.

[updated February 2018]

### 6-5.410 - Tax Refund Suits/Petitions for Readjustment

The Tax Division is responsible for defending tax refund suits brought pursuant to 28 U.S.C. § 1346(a)(1) and 26 U.S.C. § 7422(a), and petitions for readjustment of final partnership administrative adjustments (FPAA) brought pursuant to 28 U.S.C. § 1346(e) and 26 U.S.C. § 6226 and 6228. When a taxpayer serves the United States Attorney with a tax refund suit or readjustment petition, the United States Attorney’s Office should immediately notify both the Chief of the appropriate Civil Trial Section and the appropriate IRS counsel.

[added February 2018]

### 6-5.415 – Enforcement and Defense of Suits Regarding FBAR Penalties

The Tax Division is responsible for enforcing and collecting certain non-tax claims pursuant to 31 U.S.C. § 3711(g)(4)(C), including penalties (“FBAR penalties”) imposed for failure to report an interest in a foreign financial account as required by 31 U.S.C. § 5314 and its implementing regulations. Persons against whom an FBAR penalty is assessed have attempted to contest the assessment under a variety of statutory provisions, including the Administrative Procedure Act (5 U.S.C. §§ 701-706); refund suit provisions (28 U.S.C. § 1346(a)(1) or 1491); the Little Tucker Act (28 U.S.C. § 1346(a)(2)); or the Declaratory Judgment Act (28 U.S.C. § 2201). Regardless of how a plaintiff styles an FBAR suit, on receiving notice of the suit the United States Attorney’s Office should notify both the Chief of the appropriate Civil Trial Section and the appropriate IRS counsel.

[added February 2018]

### 6-5.420 - Actions to Enjoin Tax Assessment or Collection

Taxpayers sometimes bring suit to quash or enjoin an IRS examination or investigation. The tax Anti-Injunction Act, 26 U.S.C. § 7421(a), provides that, except as permitted by the Internal Revenue Code, no person shall maintain a suit for the purpose of restraining the assessment or collection of any tax in any court, whether or not the IRS assessed a tax against that person. Under the Anti-Injunction Act, a person may obtain injunctive relief only when: (1) the person was certain to succeed on the merits, and could demonstrate that the action would cause irreparable harm; or (2) in the extremely rare situation where Congress has provided no judicial review of the IRS's assessment or collection actions, as set forth in South Carolina v. Regan, 465 U.S. 367 (1984). A person who brings suit to attempt to restrain the assessment or collection of taxes must serve the Attorney General. On receiving such a suit, the United States Attorney’s Office should immediately notify the Chief of the appropriate Civil Trial Section and the appropriate IRS counsel.

If a court sets a hearing on a motion for a temporary restraining order or a preliminary injunction, the United States Attorney’s Office should immediately notify the Chief of the appropriate Civil Trial Section. The courts often set hearings on injunction cases on very short notice. When necessary, the Tax Division may consent to an arrangement in which the IRS agrees to take no collection activity for a specified period of time, or alternatively, the Tax Division may consent to a temporary restraining order (TRO). See Fed. R. Civ. P. 65(b). Before committing the United States to temporarily cease collection action or to consent to entry of a TRO, however, the United States Attorney’s Office must obtain authorization from the Chief of the appropriate Civil Trial Section.

[added February 2018]

### 6-5.430 - Declaratory Judgment Actions with Respect to Federal Taxes

The Declaratory Judgment Act, 28 U.S.C. § 2201, excludes from its coverage any suit that a person brings “with respect to Federal taxes,” other than actions brought under 26 U.S.C. § 7428 (tax-exempt organizations) or 11 U.S.C. §§ 505 and 1146 (bankruptcy). The federal tax exception to the Declaratory Judgment Act has the same scope and judicially created exceptions as the Anti-Injunction Act. See Bob Jones University v. Simon, 416 U.S. 725, 732-733 n.7 (1974). Persons who seek declaratory judgments with respect to federal taxes often seek injunctive relief at the same time. As is the case with suits seeking injunctions against federal taxes, the United States Attorney’s Office should immediately notify both the Chief of the appropriate Civil Trial Section and the appropriate IRS counsel on receiving such a suit.

[added February 2018]

### 6-5.440 - Jeopardy and Termination Assessment Cases

In suits for judicial review of jeopardy or termination assessments, 26 U.S.C. § 7429 requires the court to hold an expedited hearing within 20 days of the filing of the complaint. On receiving notice of the suit—by service of process or otherwise—the United States Attorney's Office should immediately notify both the Chief of the appropriate Civil Trial Section and the appropriate IRS counsel office.

[updated February 2018}

### 6-5.445 - Suits Contesting IRS Certification of Delinquency for Passport Revocation Purposes

The Internal Revenue Service is authorized to certify taxpayers with “seriously delinquent tax debt” (more than $50,000 in unpaid tax assessments, including any assessed interest and penalties) to the State Department for denial or revocation of a passport, under legislation enacted in 2015. See 26 U.S.C. § 7345. A taxpayer may challenge the IRS’s certification (or failure to reverse the certification) in either a district court or Tax Court proceeding. See 26 U.S.C. § 7345(e)(1). The Tax Division will handle all suits filed in district court challenging the IRS’s certification, and the United States Attorney’s Office should immediately notify both the Chief of the appropriate Civil Trial Section and the appropriate IRS counsel on receiving notice of such a suit.

[added February 2018]

### 6-5.450 - Suits Under the Freedom of Information Act and the Privacy Act of 1974

The Tax Division's Civil Trial Section, Eastern Region, handles suits against the IRS or the Tax Division brought under the Freedom of Information Act (FOIA), 5 U.S.C. § 552, or the Privacy Act of 1974, 5 U.S.C. § 552a. When a plaintiff serves the United States Attorney’s Office with a complaint in a tax-related FOIA or Privacy Act suit, the United States Attorney’s Office should immediately notify the Chief of the Civil Trial Section, Eastern Region, of the filing, and should also notify the appropriate IRS counsel if the suit concerns IRS documents or activities.

[updated Febraury 2018]

### 6-5.460 - Damage suits under Bivens or Tort Theories

If requested and authorized, the Tax Division represents IRS officers and employees and Department of Justice personnel in civil damage suits based on Bivens v. Six Unknown Named Agents of Federal Bureau of Narcotics, 403 U.S. 388 (1971). The Tax Division also substitutes in and represents the United States when IRS officers and employees and Department of Justice personnel are subject to civil damages suits based on common-law tort theories when the alleged misconduct relates to the internal revenue laws or tax administration. Upon receiving a complaint in such actions, the United States Attorney’s Office should immediately notify the Chief of the appropriate Civil Trial Section and the appropriate IRS counsel. Either the United States Attorney for the district or a Director of the Torts Branch, Civil Division, Department of Justice, will certify that the federal defendants were acting within the scope of their employment. See 28 U.S.C. § 2679 and 28 C.F.R. §15.4.

In many Bivens or common-law tort suits, defendants other than IRS or Department of Justice employees are named, and misconduct is alleged relating to matters in addition to the internal revenue laws or tax administration. In such cases, and as needed, the United States Attorney’s Office should coordinate with the Chief of the appropriate Civil Trial Section and the Civil Division Constitutional and Specialized Torts Staff. See https://dojnet.doj.gov/usao/eousa/ole/tables/subject/liab.htm .

[updated February 2018]

### 6-5.470 - "Wrongful Disclosure" Suits Against the United States

The Internal Revenue Code provides a taxpayer with a cause of action to recover damages where the taxpayer’s tax returns or tax return information allegedly have been disclosed or inspected contrary to the Internal Revenue Code’s strict privacy requirements. See 26 U.S.C. §§ 6103, 6110(j), 7431. The Civil Trial Section, Southern Region, reviews these cases. When the plaintiff serves the United States Attorney’s Office with a complaint in a wrongful disclosure suit, the United States Attorney’s Office should immediately notify both the Chief of the Southern Region and the appropriate IRS counsel.

[updated February 2018]

### 6-5.480 - "Wrongful Collection" Suits Against the United States

The Internal Revenue Code provides specific causes of action against the United States to recover damages where the IRS allegedly has engaged in collection practices that contravene or fail to meet statutory or regulatory standards. First, a taxpayer who alleges that an IRS employee has negligently, recklessly, or intentionally disregarded any provision of the Internal Revenue Code or the applicable regulations may file suit against the United States to recover economic damages. See 26 U.S.C. § 7433. Second, for wrongful failure to release a federal tax lien, a taxpayer may also file a damage suit against the United States. See 26 U.S.C. § 7432.

In addition, non-taxpayers who allege the IRS wrongfully levied their property may file an action against the United States. See 26 U.S.C. § 7426(a).

When a plaintiff serves the United States Attorney’s Office with a complaint citing any of these statutes or asserting such claims, the United States Attorney’s Office should immediately notify both the Chief of the appropriate Civil Trial Section and the appropriate IRS counsel.

Taxpayers may contest the filing of a Notice of Federal Tax Lien or a levy under 26 U.S.C. §§ 6320 or 6330 only by filing suit in the United States Tax Court. See 26 U.S.C. § 6330(d). Accordingly, the United States Attorney’s Office should immediately notify the appropriate IRS counsel if served with such a complaint filed in district court.

[updated February 2018]

### 6-5.490 - Subpoenas Served on Employees of the Internal Revenue Service

Frequently, subpoenas are served upon IRS employees in cases not involving federal taxes and in which the United States is not a party. The subpoenas purport to require these persons to appear in court to produce official IRS documents and records or to testify with respect to matters that have come to their attention in their official capacity.

Title 26 C.F.R. § 301.9000-1 et seq. (the IRS’s Touhy regulations) provides that, in such cases, unless certain strict requirements are met, the IRS employee should appear in court and respectfully decline to testify or produce records on the ground that the Treasury regulations prohibit the employee from doing so. In most cases, the IRS will issue the employee specific written instructions that the employee can furnish to the United States Attorney’s Office.

When a subpoenaed IRS employee contacts the United States Attorney’s Office, the United States Attorney’s Office should take steps to protect the employee’s and the Government’s interests. The United States Attorney’s Office should first contact the Chief of the Civil Trial Section, Eastern Region, and then contact the opposing counsel. In the Tax Division’s experience, if the United States Attorney’s Office explains the prohibition, the attorney who issued the subpoena often will agree to release the employee from complying, obviating any need to seek court assistance to secure that release. Third, if necessary, the United States Attorney’s Office should appear with the individual employee before the court issuing the subpoena. See also https://dojnet.doj.gov/usao/eousa/ole/tables/subject/touhy.htm .

[updated February 2018]

### 6-5.500 - Suits Involving Governmental Immunity from State and Local Taxes

The Tax Division represents the interests of the United States in contesting the improper imposition of state or local taxes on the federal government. Requests for assistance come directly from government agencies, government contractors, and members of the Armed Forces. Tax Division attorneys handle all tax immunity matters. The United States Attorney’s Office should promptly refer to the Chief of the Civil Trial Section, Eastern Region, all requests for advice on tax immunity matters or for representation in persuading taxing authorities not to impose a tax or to institute litigation..

[updated February 2018]

### 6-5.600 - Claims of the United States in Bankruptcy, Receivership, Probate, and Insolvency Proceedings—Generally

The IRS files proofs of claim for unpaid taxes in bankruptcy cases, receivership proceedings, and state-court probate and insolvency proceedings. Ordinarily, the IRS does not notify the Tax Division of the filing of these claims. It also may or may not advise the United States Attorney’s Office of the filing. The bankruptcy trustee, receiver, or state-court administrator often pays tax claims in due course.

When the IRS requests that the United States Attorney’s Office take action or make a court appearance in a bankruptcy matter, the United States Attorney’s Office does not need to notify the Tax Division unless he or she wishes to consult with the Chief of appropriate Civil Trial Section about the matter. See JM 6-5.6 10.

[updated February 2018]

### 6-5.610 - Bankruptcy Cases—Allocation of Responsibility

The United States Attorneys’ Offices generally handle the following bankruptcy matters:

- Complaints or other pleadings to sell property
- Cash collateral hearings
- Conversion from chapter 11 or 13 to chapter 7, or dismissal of chapter 11 or 13 cases
- Motions to compel distribution and accounting
- Motions to pay taxes (including administrative expenses) or stop the pyramiding of taxes
- Motions for a more particularized disclosure statement
- Motions for relief from the automatic stay
- Objection to confirmation of a plan
- Motion for order compelling the production of records and/or the filing of pre-petition tax returns
- Motion for order compelling the filing of post-petition tax returns
- Motion for order requiring the segregation and/or the deposit of post-petition trust fund taxes
- Adversary proceedings involving dischargeability (except those involving an attempt to evade tax or filing a fraudulent return (11 U.S.C. § 523(a)(1)(C)), fraud, or novel issues)
- Turn-over hearings
- Motions concerning valuation of property
- Objections to proofs of claims or proceedings to determine tax liability brought under 11 U.S.C. § 505(a) (except those involving substantive tax issues, trust fund recovery penalties, evidentiary hearings on disputed matters, or important or novel issues)
- Motions for return of funds retained in violation of the automatic stay or order of discharge (unless it is an action for contempt or damages are sought)

The United States Attorney’s Office and/or the IRS will refer all other tax-related bankruptcy matters to the Tax Division, including matters for which IRS National Office requires review, cases in which the debtors are prominent individuals or major corporations, and any matters not subject to the direct referral procedure. A Tax Division trial attorney also may assume responsibility for bankruptcy matters normally assigned to the United States Attorney’s Office if the trial attorney is involved in other aspects of the bankruptcy case or in other litigation with the debtor, or if the Tax Division has other reasons for handling the matter.

[updated February 2018]

###

### 6-5.611 - Bankruptcy Cases—Contested Matters and Adversary Proceedings

In contested matters and adversary proceedings, the United States Attorney’s Office should promptly forward any pleading involving matters relating to the internal revenue laws to the appropriate IRS counsel and IRS Insolvency Unit. The United States Attorney’s Office should notify the Tax Division only when it appears, pursuant to JM 6-5.610, that the Tax Division will handle the matter, for example: dischargeability proceedings implicating 11 U.S.C. § 523(a)(1)(C); objections to proofs of claims or proceedings to determine tax liability brought under 11 U.S.C. § 505(a) involving substantive tax issues, trust fund recovery penalties, or important or novel issues; and motions for contempt for violation of the automatic stay or order of discharge.

[updated February 2018]

###

### 6-5.612- Bankruptcy Cases—Appeals from Bankruptcy Court Decisions

The Tax Division decides whether to appeal an adverse bankruptcy court decision, and Tax Division attorneys handle all appeals from such decisions. The United States Attorney’s Office should promptly notify the Chief of the appropriate Civil Trial Section and IRS counsel of any adverse bankruptcy court decision, and take all steps necessary to protect the Government's interest, including filing a notice of appeal. The time for appeal from an order of a bankruptcy court is only 14 calendar days, but the bankruptcy court may extend the time for an additional 21 days under certain circumstances. See Fed. R. Bankr. P. 8002. Given this short time limit, the United States Attorney’s Office should consider requesting an extension of time at the same time that he or she refers the matter to the Tax Division.

The United States Attorney’s Office should also promptly notify the Chief of the appropriate Civil Trial Section and IRS counsel if an adverse party appeals a decision favorable to the Government. The Tax Division also handles these appeals.

In jurisdictions where there is a Bankruptcy Appellate Panel, the United States Attorney’s Office should consult with the Chief of appropriate Civil Trial Section and determine whether the Government should elect to proceed in the district court rather than before the Bankruptcy Appellate Panel.

The court of appeals have discretionary jurisdiction, under some circumstances, to hear a direct appeal from a judgment or order of the bankruptcy court, bypassing a district court’s or Bankruptcy Appellate Panel’s intermediate review. 11 U.S.C. § 158(d)(2). This procedure is similar to the interlocutory appeal process under 28 U.S.C. § 1292(b). The Solicitor General must approve a direct appeal that the Government initiates under § 158(d)(2).

For the procedure regarding appeals from orders of a United States district court or Bankruptcy Appellate Panel to a court of appeals, see JM 6-5.700.

[updated February 2018]

### 6-5.630 - Receivership Proceedings

When a federal or state court appoints a receiver for the taxpayer, the IRS may immediately assess any tax due and file a proof of claim. 26 U.S.C. § 6871(a). The United States asserts its priorities in receivership proceedings under the Federal Insolvency Statute, 31 U.S.C. § 3713.

Whenever a contest develops as to the merits or priority of an IRS claim, the United States Attorney’s Office should notify the Chief of the appropriate Civil Trial Section by sending all relevant pleadings and information. In state-court proceedings, the courts generally require the United States to follow the procedural rules and time limits applicable in those proceedings.

[updated February 2018]

### 6-5.640 - Probate Proceedings

In probate proceedings, the IRS may file a proof of claim or send a proof of claim to the decedent’s personal representative. Generally, the representative allows and pays the claim in the due course of administering the estate. When the representative rejects or does not pay the claim and the IRS wants to initiate collection action, IRS counsel will ask the Tax Division to initiate suit or take other action. When a pleading contesting an IRS proof of claim or seeking other relief against the United States is filed in probate court, the United States Attorney’s Office should promptly notify both the Chief of the appropriate Civil Trial Section and the appropriate IRS counsel. Some of these matters may be removable to federal district court.

Occasionally, the IRS will request that the United States Attorney’s Office seek an order from the probate court compelling the personal representative to satisfy the IRS’s claim. If the estate is insolvent, the United States Attorney’s Office can sometimes discourage the personal representative's failure to recognize the Government’s priority by calling the representative’s attention to the provisions of the Federal Insolvency Statute, 31 U.S.C. § 3713.

[updated February 2018]

### 6-5.650 - Insolvency Proceedings

Insolvency proceedings in state court take various forms; the most frequent is an assignment for the benefit of creditors. The IRS files proofs of claim in such proceedings. If litigation arises, the Federal Insolvency Statute, 31 U.S.C. § 3713 applies. When an objection to an IRS claim is filed, the United States Attorney’s Office should notify the Chief of the appropriate Civil Trial Section prior to taking any action and should furnish all relevant pleadings and information.

[updated February 2018]

### 6-5.700 - Appeals in Tax Matters—Generally

The Tax Division handles all appeals in all tax cases, whether or not adverse to the Government. Only the Assistant Attorney General of the Tax Division may approve exceptions to this policy. The Tax Division’s Appellate Section handles all appeals in all tax cases in the courts of appeals. The Tax Division’s Civil Trial Sections handle appeals from the decision of a bankruptcy court in tax-related matters to a district court or a Bankruptcy Appellate Panel.

[updated February 2018]

### 6-5.710 - Appeals in Tax Matters—Taxpayer (or Other Party) Appeal

After a taxpayer or other party files a notice of appeal, the United States Attorney’s Office should notify the Chief of the appropriate Civil Trial Section, with a copy to the IRS counsel, if it appears that a Tax Division trial attorney did not receive from the court electronic notice of the appeal. The Civil Trial Section then will transfer the case to the Appellate Section of the Tax Division (except for appeals from decisions of a bankruptcy court to the district court or Bankruptcy Appellate Panel, which the Civil Trial Section will handle).

[updated February 2018]

### 6-5.720 - Appeals in Tax Matters—Adverse or Partially-Adverse Decisions

After receiving an adverse or partially adverse district court, Bankruptcy Appellate Panel, or state-court decision, the United States Attorney’s Office should immediately notify the Chief of the appropriate Civil Trial Section and the IRS counsel, if it appears that a Tax Division trial attorney did not receive from the court electronic notice of the decision. The United States Attorney’s Office also should forward a recommendation concerning appeal, along with any pertinent documents not available electronically, to the Chief of the appropriate Civil Trial Section, in cases handled by the United States Attorney’s Office. The United States Attorney’s Office is responsible for timely filing in the district court the notice of appeal and related papers, in cases handled by the United States Attorney's Office.

For a further discussion on appeals, see generally JM Title 2 (Appeals).

The Civil Trial Section prepares its own recommendation on whether to appeal, which it forwards to the Appellate Section, along with the files for preparation of the Tax Division’s recommendation to the Solicitor General.

When a court enters an adverse judgment or order that requires the United States to make a tax refund or credit, pay attorneys’ fees or costs or make some other payment, the United States Attorney’s Office should furnish two certified copies of each judgment or order to the Chief of the appropriate Civil Trial Section. The Tax Division needs these copies in order to make prompt payment of the ordered amount, should the Solicitor General decide that the Government will not prosecute an appeal or should the Government lose the appeal.

[updated February 2018]

### 6-5.730 - Appeals in Tax Matters—Government Filing of a Notice of Appeal

In cases handled by the United States Attorney’s Office, the United States Attorney’s Office is responsible for protecting the Government's interests in the case, including filing a timely notice of appeal and any related papers, until the Solicitor General decides whether the Government will prosecute an appeal.

[updated February 2018]

### 6-5.740 - Appeals in Tax Matters—When the Solicitor General Approves an Appeal

If the Solicitor General authorizes an appeal, the Civil Trial Section must take all appropriate steps to perfect an appeal under the rules of the particular court of appeals, and may request the assistance of the United States Attorney’s Office.

[updated February 2018]

### 6-5.750 - Appeals in Tax Matters—When the Solicitor General Declines to Appeal

Should the Solicitor General decide that the Government will not prosecute an appeal, the Tax Division will immediately advise the United States Attorney’s Office. If the adverse judgment or order requires the United States to make a payment to the opponent, the Tax Division will then transfer the case to its Post-Litigation Unit, which will process and make prompt payment of the judgment, when required. See JM 6-7.200. In consultation with the Chief of the appropriate Civil Trial Section, the United States Attorney’s Office should take all other appropriate action in the trial court in accordance with the Solicitor General's decision.

[added February 2018]

### 6-5.800 - Applications for Attorneys' Fees and Litigation Expenses

The United States Attorney’s Office should notify the Chief of the appropriate Civil Trial Section and the IRS counsel of applications for attorneys' fees and related expenses filed in cases handled by the United States Attorney’s Office. Attorneys’ fees in tax cases are governed by 26 U.S.C. § 7430, not the Equal Access to Justice Act (28 U.S.C. § 2412).

[added February 2018]

Updated September 19, 2018