Cohen v. United States

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 29, 2010 Decided July 1, 2011

No. 08-5088

NEILAND COHEN,
APPELLANT

v.

UNITED STATES OF AMERICA,
APPELLEE

Consolidated with 08-5093, 08-5174

Appeals from the United States District Court
for the District of Columbia
(Nos. 1:07-cv-00051, 06–cv–00483, 07–cv–00050)

On Petition for Rehearing En Banc

Thomas Goldstein argued the cause for appellants. With
him on the briefs were Isaac J. Lidsky, Michael A. Bowen,
Marc B. Dorfman, Jonathan W. Cuneo, Robert J. Cynkar,
William H. Anderson, Nicholas E. Chimicles, Benjamin F.
Johns, Henry D. Levine, Charles Tiefer, Mark C. Rifkin, Mark
Griffin, and Randy J. Hart.
 2
Kristin E. Hickman was on the brief of amicus curiae in
support of appellants.

Gilbert S. Rothenberg, Acting Deputy Assistant Attorney
General, U.S. Department of Justice, argued the cause for
appellee. With him on the brief were Ronald C. Machen, Jr.,
U.S. Attorney, and Teresa E. McLaughlin and Ellen P.
DelSole, Attorneys. Kathleen E. Lyon, Attorney, and R. Craig
Lawrence, Assistant U.S. Attorney, entered appearances.

Before: SENTELLE, Chief Judge, GINSBURG, HENDERSON,
ROGERS, TATEL, GARLAND, BROWN, GRIFFITH, AND
KAVANAUGH, Circuit Judges.

Opinion for the Court filed by Circuit Judge BROWN.

Dissenting opinion filed by Circuit Judge KAVANAUGH,
with whom Chief Judge SENTELLE and Circuit Judge
HENDERSON join.

BROWN, Circuit Judge: After illegally collecting a three
percent excise tax, the Internal Revenue Service (“IRS” or “the
Service”) created a refund procedure for taxpayers to recoup
their money. That procedure, Appellants argue, is unlawful.
We have no occasion to visit the merits of Appellants’ claims,
as we granted rehearing en banc only to determine whether we
have the authority to hear the case. We do.
 3
I1

The Internal Revenue Code imposes a three percent excise
tax on phone calls. 26 U.S.C. § 4251. Telephone service
providers collect the tax and pay it over to the IRS. See id.
§ 4291. Individual taxpayers are not required to calculate
their own excise tax liability or to maintain adequate
supporting documentation to do so. See Rev. Rul. 60-58,
1960-1 C.B. 638. The Code taxes communications charges
that are based upon distance and transmission time. 26 U.S.C.
§ 4252(b). Decades ago, these requirements posed no
problem, as phone companies based their billing on multiple
factors, including the key components of distance and time.
Nat’l R.R. Passenger v. United States, 431 F.3d 374, 375 (D.C.
Cir. 2005). The telecommunications revolution has changed
all that. Many consumers now pay strictly based on
transmission time; frequently, rates no longer vary based on the
distance of a call. Id. Despite recognizing this shift, the IRS
continued to collect taxes on all long-distance
communications. See I.R.S. Notice 2005-79, 2005-2 C.B. 952
(“Notice 2005-79”); see also Rev. Rul. 79-404, 1979-2 C.B.
382 (determining communication between ships at sea or other
offshore facilities and telephone subscribers in the United
States were subject to the excise tax though the charges varied
only based on transmission time).

Multiple corporate taxpayers brought refund suits
claiming the excise tax was illegal and several circuits,
including this one, concluded time-only rate structures render
calls nontaxable under the Code. Nat’l R.R. Passenger,

1
The panel decision, Cohen v. United States, 578 F.3d 1, 3–4 (D.C.
Cir. 2009), sets out much of the relevant factual and procedural
background of this case. We draw, often verbatim, from that
decision in summarizing the background here.
 4
431 F.3d at 375–76. While these lawsuits proceeded, the IRS
remained adamant regarding the continuing applicability of the
excise tax. After it lost an appeal in the Eleventh Circuit, see
Am. Bankers Ins. Group v. United States, 408 F.3d 1328 (11th
Cir. 2005), the Service declared it would continue to litigate the
applicability of the tax and directed phone service providers to
continue collecting the tax, even from individuals in the
Eleventh Circuit’s jurisdiction. Notice 2005-79. The IRS
further ordered taxpayers to continue paying the tax, but
permitted place-holder refund claims “for overpayments.” Id.
Taxpayers were advised, however, the Service would not
process place-holder refund claims while related cases
remained pending in federal courts of appeals. Id.

The IRS lost in each of the five circuits that considered its
application of § 4251. All held the tax inapplicable to
long-distance rates calculated without reference to distance.
Reese Bros., Inc. v. United States, 447 F.3d 229, 231 (3d Cir.
2006); Fortis, Inc. v. United States, 447 F.3d 190, 191 (2d Cir.
2006); Nat’l R.R. Passenger, 431 F.3d at 374; OfficeMax, Inc.
v. United States, 428 F.3d 583, 585 (6th Cir. 2005); Am.
Bankers Ins. Group, 408 F.3d at 1338. On May 26, 2006,
after the last of these rulings came down, the IRS issued Notice
2006-50, discontinuing the excise tax for phone charges based
solely on transmission time. See I.R.S. Notice 2006-50,
2006-1 C.B. 1141 (“Notice 2006-50”).2

Notice 2006-50 provided a one-time exclusive mechanism
for taxpayers to obtain a refund for excise taxes erroneously
collected between February 28, 2003, and August 1, 2006.3
2
The IRS modified Notice 2006-50 on January 29, 2007. See
I.R.S. Notice 2007-11, 2007-1 C.B. 405 (“Notice 2007-11”).
3
The IRS promulgated a different procedure for business entities (as
opposed to individuals) seeking an excise tax refund. See Notice
 5
Id. § 5(a) (agreeing to provide refund “if the taxpayer requests
the credit or refund in the manner prescribed in this notice”);
id. § 5(g) (refusing to process refund requests “that do not
follow the provisions of this notice”). Although the IRS
collected the excise tax through telephone service providers,
Notice 2006-50 required individual taxpayers to request a
refund on their 2006 federal income tax returns. Id. § 5(a)(2).
Taxpayers who otherwise did not need to file income tax
returns nevertheless had to file a return in order to submit a
refund request. Id. Taxpayers could request either a “safe
harbor” amount, which required no documentation, or the
actual amount of tax they paid, for which the IRS could
demand documentation. 4 Id. § 5(c); Notice 2007-11, § 11
(setting the safe harbor at between $30 and $60 depending on
the number of exemptions and refusing to require telephone

2007-11. Enities could use the “Business and Nonprofit Estimation
Method” formula to calculate their refund, or gather all their phone
records during the refund period instead. See id. § 12.
4
Notice 2006-50 ultimately proved an ineffective means of
refunding the excise tax. According to a report issued by the
Treasury Inspector General for Tax Administration, the IRS illegally
collected approximately $8 billion between February 28, 2003, and
August 1, 2006. TREASURY INSPECTOR GENERAL FOR TAX
ADMINISTRATION, REPORT NO. 2007-30-178, ALTHOUGH STRONG
EFFORTS WERE MADE, A SIGNIFICANT AMOUNT OF THE TELEPHONE
EXCISE TAX OVERCOLLECTED FROM INDIVIDUAL TAXPAYERS MAY
NEVER BE REFUNDED 6 (Sept. 26, 2007). But the IRS only
refunded “just over half” that amount, id. at 5 n.3, as only 1.7 percent
of the 10 to 30 million eligible individuals without income tax filling
obligations actually sought a refund. U.S. GOVERNMENT
ACCOUNTABILITY OFFICE, GAO-07-695, TAX ADMINISTRATION:
TELEPHONE EXCISE TAX REFUND REQUESTS ARE FEWER THAN
PROJECTED AND HAVE HAD MINIMAL IMPACT ON IRS SERVICES 10
(2007).
 6
companies to supply customers with billing records during the
refund period).

Various lawsuits challenged the lawfulness and adequacy
of the refund process. See In re Long-Distance Tel. Serv. Fed.
Excise Tax Refund Litig., 469 F. Supp. 2d 1348 (J.P.M.L.
2006) (Transfer Order). The Multidistrict Litigation
(“MDL”) Panel consolidated and transferred three district
court cases, Cohen, Sloan, and Gurrola into an MDL
proceeding before the United States District Court for the
District of Columbia. Id. at 1350. In each of the three
consolidated suits, Appellants purported to represent a class of
taxpayers who lacked the resources or expertise necessary to
individually seek a refund under Notice 2006-50, or amounts at
stake sufficient to make individual actions worthwhile. 5
Appellants claim Notice 2006-50 is substantively flawed
because it undercompensates many taxpayers for the actual
excise taxes paid and is procedurally flawed because the IRS
did not comply with the notice and comment procedures
required under the Administrative Procedure Act (“APA”), 5
U.S.C. § 551 et seq., when it issued the notice. See Second
Amended Complaint ¶ 2 (“The I.R.S.’s program is unlawful
because it fails to compensate consumers for anything
approaching the full amount of the money illegally taken, is
without a basis in law, is arbitrary in the extreme, and was
promulgated without any of the procedures that are required to
accompany agency rulemaking.”).

The district court dismissed the cases after concluding
Appellants failed to exhaust the administrative remedies for
5
The three suits differ in one important respect. The Cohen
plaintiffs separately filed a refund claim with the Service, which the
district court dismissed as premature. Our panel decision affirmed
the dismissal, Cohen, 578 F.3d 1, 14–15 (D.C. Cir. 2009), and that
claim is not at issue here.
 7
their refund claims and failed to state valid claims under
federal law. In re Long-Distance Tel. Serv. Fed. Excise Tax
Refund Litig., 539 F. Supp. 2d 281, 287 (D.D.C. 2008) (“[N]o
refund claim, no refund suit.”). That court further found
Notice 2006-50 was an “internal policy,” did not adversely
affect Appellants, and therefore constituted unreviewable
agency action. Id.; see 5 U.S.C. § 702; Bennett v. Spear, 520
U.S. 154, 177–78 (1997) (requiring “final agency action” to be
the “consummation” of agency decisionmaking and either
affect legal “rights or obligations” or result in “legal
consequences”); Trudeau v. FTC¸456 F.3d 178, 185 (D.C. Cir.
2006) (explaining the “final agency action” requirement is not
jurisdictional, but rather a limitation on an APA cause of
action). The district court also ruled Appellants’ APA claims
for injunctive and declaratory relief were mooted by the IRS’s
decision to discontinue the tax on time-based phone charges.
539 F. Supp. 2d at 287.

A divided panel of this court reversed, holding Notice
2006-50 constituted final agency action reviewable under the
APA. Cohen, 578 F.3d 1, 4–14 (D.C. Cir. 2009). Before
doing so, the majority rejected two challenges to the court’s
jurisdiction. In the majority’s view, neither the
Anti-Injunction Act (“AIA”), which provides that “no suit for
the purpose of restraining the assessment or collection of any
tax shall be maintained in any court by any person,” 26 U.S.C.
§ 7421(a), nor the Declaratory Judgment Act (“DJA”), which
authorizes declaratory relief except “with respect to Federal
taxes,” 28 U.S.C. § 2201(a), stripped the court of jurisdiction
to hear Appellants’ claims for equitable relief. Cohen, 578
F.3d at 5. Although the text of the AIA and DJA differ, the
majority reasoned, our circuit precedent held the two
“coterminous.” Id. Thus, if one did not bar Appellants’ APA
claims, neither did the other. Id. at 13 (citing “Americans.
United,” Inc. v. Walters, 477 F.2d 1169, 1176 (D.C. Cir.
 8
1973), rev’d on other grounds sub nom. Alexander v.
“Americans United” Inc., 416 U.S. 752 (1974) (“The breadth
of the tax exception of [the DJA] is co-extensive with the effect
of [the AIA], and so the applicability of the latter to our
situation is determinative of jurisdiction.”)).

The panel dissent, on the other hand, argued the DJA
barred Appellants’ APA claims. In the dissent’s view, our
precedent required the AIA and DJA to be read coterminously,
but permitted us to select the broader of the two provisions as
the baseline. As between the two, the dissent argued “reading
the two statutes to coterminously bar declaratory and
injunctive relief with respect to federal taxes is consistent with
precedent, adheres to the plain text of the later-enacted [DJA],
and corresponds to the well-established principle that
challenges to tax regulations should be brought in refund
suits.” Id. at 18 (Kavanaugh, J., dissenting). The dissent also
argued Appellants’ claims were not ripe because Appellants
had not filed refund requests under Notice 2006-50. Id. at 20
(citing Stephenson v. Brady, 927 F.2d 596 (table), 1991 U.S.
App. LEXIS 2886, at *4 (4th Cir. 1991) (per curiam)).

On September 21, 2009, the IRS petitioned the court for
rehearing en banc. We granted the petition, limiting our en
banc review to four questions, all concerning (1) whether we
have jurisdiction and (2) whether Appellants state a valid claim
upon which relief may be granted. Our review is de novo.
Kassem v. Wash. Hosp. Ctr., 513 F.3d 251, 253 (D.C. Cir.
2008).

II

We address jurisdiction first. See Steel Co. v. Citizens for a
Better Env’t, 523 U.S. 83, 94 (1998). In that regard, two
different questions are pertinent: Does section 10(a) of the
 9
APA, 5 U.S.C. § 702, waive sovereign immunity with respect
to Appellants’ claims, and does the AIA, DJA, or both provide
“other limitations on judicial review?” 5 U.S.C. § 702.

A

Our jurisdiction extends generally to cases and
controversies involving questions of federal law. 28 U.S.C.
§ 1331. The APA—a federal law—provides a “generic cause
of action in favor of persons aggrieved by agency action,”
though it is not an independent source of jurisdiction. Md.
Dep’t of Human Res. v. Dep’t of Health & Human Servs., 763
F.2d 1441, 1445 n.1 (D.C. Cir. 1985); cf. Natural Res. Def.
Council, Inc. v. Hodel, 865 F.2d 288, 318 (D.C. Cir. 1988)
(“Congress has seen fit to provide broadly for judicial review
of those actions, affecting as they do the lives and liberties of
the American people. This is fully in keeping with fundamental
notions in our policy that the exercise of governmental power,
as a general matter, should not go unchecked.”); Trudeau, 456
F.3d at 183 (“[T]he APA does not afford an implied grant of
subject matter jurisdiction permitting federal judicial review of
agency action.”) (quoting Califano v. Sanders, 430 U.S. 99,
107 (1977)).

In contrast, “[s]overeign immunity is jurisdictional” and
“[a]bsent a waiver, . . . shields the Federal Government and its
agencies from suit.” FDIC v. Meyer, 510 U.S. 471, 475
(1994). Appellants, who seek only equitable relief, argue
Congress provided the necessary waiver of immunity in § 702,
which reads in part:

An action in a court of the United States seeking relief
other than money damages and stating a claim that an
agency . . . acted or failed to act . . . shall not be
dismissed nor relief therein be denied on the ground
 10
that it is against the United States or that the United
States is an indispensable party.

5 U.S.C. § 702. We agree. Even construing § 702 “strictly,”
as the Service requests, see Dep’t of the Army v. Blue Fox, Inc.,
525 U.S. 255, 260–61 (1999), there is no doubt Congress lifted
the bar of sovereign immunity in actions not seeking money
damages. See Trudeau, 456 F.3d at 186. The IRS is not
special in this regard; no exception exists shielding it—unlike
the rest of the Federal Government—from suit under the APA.
See e.g., Foodservice & Lodging Inst., v. Regan, 809 F.2d 842
(D.C. Cir. 1987) (per curiam) (concluding the district court
allowed under the APA a challenge to an IRS regulation
unrelated to the assessment or collection of tax); Tax Analysts
& Advocates v. Shultz, 376 F. Supp. 889, 892 (D.D.C. 1974)
(invalidating a Revenue Ruling under the APA, quoted
approvingly in Hibbs v. Winn, 542 U.S. 88, 103 (2004)); Nat’l
Restaurant Ass’n v. Simon, 411 F. Supp. 993, 995–99 (D.D.C.
1976) (allowing a challenge to a Revenue Ruling to proceed
under the APA).

The IRS insists § 702’s waiver of sovereign immunity
does not apply here because it does not encompass review of
actions “committed to agency discretion.” 5 U.S.C.
§ 701(a)(2). We previously rejected this argument when the
Service couched it in terms of a want of “final agency action”
under § 704, see Cohen, 578 F.3d at 7–10, and did not request
briefing on the issue in our order granting en banc review.
There is no need to revisit the issue now. Put simply, “Notice
2006-50 binds the IRS.” Cohen, 578 F.3d at 8. Because the
IRS “forfeited the discretion it retained prior to issuing the
notice,” id. at 8, we need not address whether the APA’s “final
agency action” requirement limits its waiver of sovereign
immunity. In any event, we have previously held it did not.
Trudeau, 456 F.3d at 187 (“We also hold that the waiver
 11
applies regardless of whether the FTC’s press release
constitutes ‘final agency action.’”).

B

Even though § 702 waives the Government’s immunity, it
preserves “other limitations on judicial review” and does not
“confer[] authority to grant relief if any other statute . . .
expressly or impliedly forbids the relief which is sought.” 5
U.S.C. § 702; see Schnapper v. Foley, 667 F.2d 102, 108 (D.C.
Cir. 1981) (stating the Government’s immunity remains intact
when “another statute expressly or implicitly forecloses
injunctive [or declaratory] relief”); Smith v. Booth, 823 F.2d
94, 97 (5th Cir. 1987) (same); Fostvedt v. United States, 978
F.2d 1201, 1204 (10th Cir. 1992) (same); see also H.R. REP.
NO. 94-1656, at 12, reprinted in 1976 U.S.C.C.A.N. 6121,
6132–33 (stating that § 702 of the APA is to have no effect on
limitations and prohibition of the AIA and DJA). The IRS
argues the AIA and DJA provide such “other limitations” on
our review. At the en banc stage, we may “set aside [our] own
precedent” reading the two statutes as coterminous. Critical
Mass Energy Project v. NRC , 975 F.2d 871, 876 (D.C. Cir.
1992); see also id. at 880 (Randolph, J., concurring) (noting
stare decisis is “most compelling” in cases of statutory
interpretation) (quoting Hilton v. S.C. Pub. Rys. Comm’n¸ 502
U.S. 197, 205 (1991)). We therefore address separately
whether each statute limits judicial review under the APA.

The dissent suggests these questions of statutory
interpretation are academic. Diss. Op. at 17 n.12. But this
statement is puzzling. These questions are the same ones the
dissent raised at the panel stage, the same questions the court
granted en banc review to consider, and the same questions the
court asked the litigants to address. The court did not grant en
banc review to reconsider whether this case was ripe, or
 12
whether Appellants failed to exhaust their administrative
remedies.

1

Enacted in 1867, the AIA “apparently has no recorded
legislative history, but its language could scarcely be more
explicit.” Bob Jones Univ. v. Simon, 416 U.S. 725, 736
(1974) (footnote omitted). It states:

[N]o suit for the purpose of restraining the assessment
or collection of any tax shall be maintained in any
court by any person, whether or not such person is the
person against whom such tax was assessed.

26 U.S.C. § 7421(a). “The manifest purpose of § 7421(a) is to
permit the United States to assess and collect taxes alleged to
be due without judicial intervention, and to require that the
legal right to the disputed sums be determined in a suit for
refund.” Enochs v. Williams Packing & Nav. Co., 370 U.S. 1,
7 (1962) (interpreting AIA by looking at “comparable” Tax
Injunction Act (“TIA”) of 1937, 50 Stat. 738 (codified as
amended at 28 U.S.C. § 1341)). As the Supreme Court
explained, the provision reflected “appropriate concern about
the . . . danger that a multitude of spurious suits, or even suits
with possible merit, would so interrupt the free flow of
revenues as to jeopardize the Nation’s fiscal stability.”
Alexander v. “Americans United” Inc., 416 U.S. 752, 769
(1974) (Blackmun, J., dissenting); see also California v. Grace
Brethren Church, 457 U.S. 393, 410 (1982) (interpreting TIA).

The AIA has “almost literal effect”: It prohibits only those
suits seeking to restrain the assessment or collection of taxes.
Bob Jones, 416 U.S. at 737 (quoting Williams Packing, 370
 13
U.S. at 6-7) 6; see also Hibbs, 542 U.S. at 102–03. Thus, in a
late nineteenth century case, the AIA prohibited enjoining the
collection of a tax on tobacco on the theory the tax was
“illegally assessed.” Snyder v. Marks¸ 109 U.S. 189, 192–93
(1883); see also Hannewinkle v. City of Georgetown, 82 U.S.
547, 548 (1872). Similarly, in Bob Jones University v. Simon,
the AIA precluded injunctive relief when Bob Jones University
lost its status as a tax exempt organization under § 501(c)(3) of
the Internal Revenue Code. 416 U.S. at 739. An injunction
would have impacted the university’s future tax liability
because § 501(c)(3) organizations are exempt from FICA
(social security) and FUTA (unemployment) taxes. Id.; see
also “Americans United” Inc., 416 U.S. at 762 n.13 (holding a
suit for injunctive relief barred by the AIA because “[s]o long
as the imposition of a federal tax, without regard to its nature,
follows from the Service’s withdrawal of § 501(c)(3) status,
[injunctive relief is barred and] a refund suit following the
collection of that tax is an appropriate vehicle for litigating the
legality of the Service’s actions under § 501(c)(3).”). By
contrast, in Hibbs v. Winn, Arizona taxpayers sought to
invalidate an Arizona tax credit that allegedly supported
parochial schools in violation of the Establishment Clause.
542 U.S. at 92. The Supreme Court allowed the state
taxpayers’ suit for declaratory and injunctive relief to proceed

6
In Williams Packing, the Supreme Court recognized a narrow
judicially created exception to the AIA’s prohibition on injunctive
relief: when “it is clear that [1] under no circumstances could the
Government ultimately prevail, the central purpose of the Act is
inapplicable and . . . [2] the attempted collection may be enjoined if
equity jurisdiction otherwise exists.” Williams Packing, 370 U.S. at
7. South Carolina v. Regan provides a similar escape valve in the
absence of an alternative remedy. 465 U.S. 367, 374 (1984).
Because we hold the AIA does not preclude Appellants’ claims,
there is no need to inquire whether an exception to the AIA would
apply if it did.
 14
despite the comparable TIA because the suit did not alter the
taxpayers’ individual tax liability or deplete the state’s tax
revenue in any way. See id. at 107.

This suit does not seek to restrain the assessment or
collection of any tax. The IRS previously assessed and
collected the excise tax at issue. The money is in the U.S.
treasury; the legal right to it has been previously determined.
As a result, this suit is similar to Hibbs. Hearing it—whatever
its merit—will not obstruct the collection of revenue as in
Snyder, alter Appellants’ future tax liabilities as in Bob Jones,7
or shift the risk of insolvency as the Court feared in Grace
Brethren Church. This suit is strictly about the procedures
under which the IRS will return taxpayers’ money. In any
event, whether the IRS’s procedures are upheld or the
Appellants succeed in forcing a different set of procedures,
those procedures are not retroactive; they do not and cannot
affect the assessment or collection of taxes after the fact.

But the IRS thinks otherwise. The Service argues the
Court has construed the AIA to preclude suit in similar
circumstances. In support, the Service points to United States
v. Clintwood Elkhorn Mining Co., 553 U.S. 1 (2008), and

7
The IRS argues Bob Jones, and its companion case Alexander v.
“Americans United,” Inc., support reading the AIA to preclude
Appellants’ claims because neither “directly involve[d] assessment
or collection.” This misconstrues the holding of Bob Jones and
“Americans United.” In both cases, the judicial relief requested
would have impacted the litigants’ future tax liability because only
501(c)(3) organizations are exempt from FICA and FUTA taxes.
Bob Jones, 416 U.S. at 727–28. The Court emphasized this point in
characterizing both Bob Jones and “Americans United” as
pre-enforcement cases. Id. at 727 (“This case and [“Americans
United”] involve . . . whether, prior to the assessment and collection
of any tax, a court may enjoin the Service . . . .”).
 15
United States v. Dalm, 494 U.S. 596 (1990). But Clintwood
Elkhorn and Dalm are distinguishable. The Court’s focus in
each was on how the AIA and § 7422(a), together, establish the
statutory conditions upon which a taxpayer may bring a refund
suit without interrupting the orderly assessment and collection
of taxes. Clintwood Elkhorn and Dalm do not speak to suits
outside the § 7422(a) refund process. See Dalm, 494 U.S. at
601.

The IRS envisions a world in which no challenge to its
actions is ever outside the closed loop of its taxing authority.
It argues assessment and collection are part of a “single
mechanism” that ultimately determines the amount of revenue
the Treasury retains. Because this suit will ultimately affect
the money Treasury retains, the IRS argues, it involves
“assessment and collection.”8 But the Supreme Court rejected
this “single mechanism” theory of assessment and collection in
Hibbs, choosing instead to define “assessment and collection”
as is done in the Internal Revenue Code. “[A]ssessment” is
not “synonymous with the entire plan of taxation,” but rather
with “the trigger for levy and collection efforts,” 542 U.S. at
102, and “collection” is the actual imposition of a tax against a
plaintiff, and does not concern third-parties trying to contest
the validity of a tax or to stop its collection. Id. at 104. The
assessment and collection in this case are long-since completed
and no “single mechanism” theory will revive them.

8
Furthermore, because the AIA strips the court of its authority to
issue injunctive relief, the IRS’s proposed reading of “assessment
and collection” would also preclude equitable relief in § 7422(a)
proceedings (i.e. refund suits), since a refund claim may ultimately
alter the amount of revenue the Treasury retains. This result,
however, is at odds with the Service’s subsequent argument that
Appellants could obtain the relief they sought in a refund suit. Oral
Arg. 41.
 16
The IRS has a third theory—this one structural rather than
textual. The IRS argues, as did the dissent at the panel stage,
that the AIA bars Appellants’ APA claims because a complex
regulatory scheme requires that “challenges to tax laws,
regulations, decisions, or actions ordinarily be brought in
refund suits after plaintiffs have sought a refund from, and
exhausted their administrative remedies with, the IRS.”
Cohen, 578 F.3d at 17 (Kavanaugh, J., dissenting). But this
neglects the nuance. The Supreme Court, this court, and other
circuits have allowed challenges to tax laws outside the context
of a 26 U.S.C. § 7422(a) proceeding (a refund suit). For
example, in South Carolina v. Regan, the Supreme Court
rejected the IRS’s argument that, because a taxpayer could
have filed a refund suit instead, the AIA prohibited a suit in
which South Carolina challenged the constitutionality of a
federal statute imposing restrictions on the state’s issuance of
bonds. 465 U.S. at 378. The Court concluded the AIA “was
intended to apply only when Congress has provided an
alternative avenue for an aggrieved party to litigate its claims
on its own behalf.” Id. at 381. For reasons developed more
fully below, a refund suit is not an “alternative avenue” here.

Similarly, this court has allowed constitutional claims
against the IRS to go forward in the face of the AIA. Thus, in
We the People Foundation, Inc. v. United States, we held the
AIA “[b]y its terms,” did not bar “a straight First Amendment
Petition Clause claim,” 485 F.3d 140, 143 (D.C. Cir. 2007)
(Kavanaugh, J.), even though it did bar a tax collection claim
“couched . . . in constitutional terms,” id.; see also, e.g,
Foodservice & Lodging Inst., 809 F.2d at 846 n.10 (allowing
APA challenge to IRS tip regulation). Contrary to the IRS’s
position here, We the People does not support reading the AIA
to reach all disputes tangentially related to taxes. Quite the
opposite. It requires a careful inquiry into the remedy sought,
the statutory basis for that remedy, and any implication the
 17
remedy may have on assessment and collection. This is in
accord with the holdings of several other courts. See, e.g.,
Linn v. Chivatero, 714 F.2d 1278 (5th Cir. 1983) (allowing
Fourth Amendment claim against IRS for return of seized
materials); see also Tax Analysts & Advocates¸ 376 F. Supp. at
892 (allowing action to compel IRS to collect additional taxes);
McGlotten v. Connally, 338 F. Supp. 448, 453–54 (D.D.C.
1972) (three judge court) (allowing challenge to IRS grants of
income tax exemptions to discriminatory organizations). The
principle the case law elucidates is therefore quite simple: The
AIA, as its plain text states, bars suits concerning the
“assessment or collection of any tax.” It is no obstacle to
other claims seeking to enjoin the IRS, regardless of any
attenuated connection to the broader regulatory scheme. As
Appellants’ suit does not implicate assessment or collection,
the AIA does not apply.

2

Having established our authority to hear Appellants’ claim
for injunctive relief, we pause to consider whether it is
necessary, or prudent, to wander further. Appellants claim
not to care about the declaratory relief they seek, as it may
become academic if they succeed in enjoining the IRS. Even
so, Appellants refuse to waive the argument. Admittedly, it is
odd “to think that a court with authority to issue [an injunction]
is without power to declare the rights of the parties in
connection therewith.” Tomlinson v. Smith, 128 F.2d 808 (7th
Cir. 1942). Nevertheless, establishing our jurisdiction over
Appellants’ claim for declaratory relief is not an academic
exercise. Appellants do not abandon their claim and the DJA
is a distinct grant of judicial authority, separate and apart from
the court’s power to award injunctive relief under 28 U.S.C.
§ 1331. Moreover, if the district court determines an
injunction is not warranted on remand, questions about its
 18
jurisdiction to hear Appellants’ claim for declaratory relief will
unnecessarily prolong the case even further. We therefore
venture onward, and consider whether the DJA is an “other
limitation[] on judicial review,” 5 U.S.C. § 702, precluding the
court’s power to award Appellants the declaratory relief they
seek.
As before, our inquiry begins with the statutory text.
Unlike the AIA, the DJA seems to carve out of its ambit any
suit “with respect to Federal taxes.” 28 U.S.C. § 2201(a).
But precedent interprets the DJA and AIA as coterminous.
See E. Kentucky Welfare Rights Org. v. Simon, 506 F.2d 1278,
1284 (D.C. Cir. 1974); “Am. United,” Inc., 477 F.2d at 1176.
In other words, “with respect to Federal taxes” means “with
respect to the assessment or collection of taxes.” This
interpretation is consistent with law in several other circuits.
See United Mine Workers of Am. 1992 Benefit Plan v. Leckie
Smokeless Coal Co. (In re Leckie Smokeless Coal Co.), 99 F.3d
573, 583–84 (4th Cir. 1996); Ecclesiastical Order of ISM of
AM v. IRS, 725 F.2d 398, 404–05 (6th Cir. 1984); Perlowin v.
Sassi, 711 F.2d 910, 911 (9th Cir. 1983) (per curiam); McCabe
v. Alexander, 526 F.2d 963 (5th Cir. 1976) (per curiam);
Tomlinson, 128 F.2d at 811.

The panel dissent read things differently. While
acknowledging our prior interpretation of the AIA and DJA as
coterminous, the dissent questioned such cases’ precedential
value, and wondered why a coterminous reading of the two
statutes narrowed the scope of the DJA rather than broadening
the scope of the AIA. Cohen¸ 578 F.3d at 18. Favoring the
latter, the dissent concluded the text of the DJA (and
deductively that of the AIA) “squarely precludes this APA suit
at this time.” Id. at 17. But the dissent went further,
suggesting our precedent stemmed from a different and unruly
era in which judges viewed statutory text not as an analytic
starting point, but as a necessary formality in crafting opinions.
 19
To remedy this, the dissent urged the “en banc Court [to] clear
this up,” “pay greater attention to statutory text,” and “not find
[the AIA and DJA] coterminous.” Id. at 19 n.6.

So is Appellants’ APA challenge properly characterized as
a suit “with respect to Federal taxes”? It is in the sense the
action is against the IRS, the agency charged with
administering our federal tax system, and concerns refund
procedures for a previously collected federal tax. This suit
eludes that characterization in the sense its result—regardless
of who wins—will not directly affect the disposition of any
federal tax. Even if Appellants win, it does not follow that
they are entitled to a tax refund. Whatever Appellants
ultimately hope to achieve, this is not a refund suit. The IRS
may still adopt a new version of the same notice after fixing
any substantive and procedural defects. Which scope of “with
respect to Federal taxes” is correct then—the broad one or the
narrow one?

Despite our obligation to begin with the statutory text,
discerning our jurisdiction to hear Appellants’ request for
declaratory relief must come not from staring hard at the phrase
“with respect to Federal taxes,” but from its
context—linguistic, historical, and functional. A fuller
consideration of the phrase reveals that both “actions brought
under section 7428 of the Internal Revenue Code of 1986,
[and] a proceeding under section 505 or 1146 of title 11,” are
outside the tax exception. 28 U.S.C. § 2201(a). To oust the
courts of jurisdiction, it is not enough that claims relate in the
loose sense to “Federal taxes”; they must also not pertain to the
status and classification of section 501(c)(3) organizations
(i.e., 26 U.S.C. § 7428 proceedings), unpaid tax liability of the
debtor in a Chapter 11 reorganization (i.e., 11 U.S.C. § 505
proceedings), or the tax effects of a Chapter 11 reorganization
plan if not obtained from the IRS within 270 days (i.e., 11
 20
U.S.C. § 1146 proceedings). These carve outs are notable:
first, because they cabin the phrase “with respect to Federal
taxes,” thus implying an all-encompassing reading is
inappropriate, and second, because each relates to tax
assessment or collection, thus suggesting the term “Federal
taxes” similarly pertains to assessment or collection.

The earliest cases construing the DJA’s tax exception also
rejected a broad construction of the statute. In Tomlinson v.
Smith, 128 F.2d 808 (7th Cir. 1942), for example, the IRS
sought to collect a partnership’s taxes from the owners of a
property leased by the partnership. The property’s trustee
sued the IRS in federal court seeking declaratory relief
concerning title to the debt. The IRS argued the court was
precluded by the DJA from declaring the parties’ rights
concerning the property, because the action related to federal
taxes and impinged on the Service’s collection efforts. On
appeal from entry of an interlocutory injunction, the court
determined the matter was appropriate for injunctive relief
under a previous version of the AIA9 because “plaintiff is not
the alleged tax debtor” and “sues in the capacity of a trustee for
the purpose of protecting the mortgage lien on property” the
IRS was encumbering to extract taxes owed by the partnership.
Id. at 810–11. The court then considered whether declaratory
relief was barred by the DJA, and concluded:

It is unreasonable to think that a court with authority
to issue a restraining order is without power to declare
the rights of the parties in connection therewith. In
other words, it is our view that the language which
excepts federal taxes from the Declaratory Judgment

9
Congress subsequently amended the AIA to preclude suits by
third-party property holders. Federal Tax Lien Act of 1966, Pub. L.
No. 89-719, § 110, 80 Stat. 1125, 1144.
 21
Act is co-extensive with that which precludes the
maintenance of a suit for the purpose of restraining
the assessment or collection of a tax.

Id. (emphasis added).

The Second Circuit relied on Tomlinson in a 1962 decision
involving similar facts. Bullock v. Latham, 306 F.2d 45, 47
(2d Cir. 1962). Although Bullock v. Latham did not explicitly
hold the AIA and DJA were co-extensive, it quoted
Tomlinson’s determination that the court’s ability to provide
injunctive relief was “determinative of its jurisdiction” to
provide declaratory relief. Id. at 47. Bullock thus follows
Tomlinson by reading the DJA’s federal tax exemption
narrowly. It applies to “controversies involving tax liabilities
of parties qua taxpayers,” but not all conceivable controversies
relating to Federal taxes, even those altering the Service’s
ability to assess and collect. Id. at 48.

Congress did not intend to provide declaratory relief for
litigants when the AIA barred injunctive relief. Holding to the
contrary, as the IRS urges, would vitiate the structural design
of the DJA. The legislative history speaks directly to this
point. A year after passing the DJA, in § 405 of the Revenue
Act of 1935, Congress amended the statute to expressly except
disputes “with respect to Federal taxes.” The Senate Finance
Committee Report explained the animating purpose of the
amendment, noting “[t]he application of the Declaratory
Judgments Act to taxes would constitute a radical departure
from the long-continued policy of Congress (as expressed in
[the AIA] and other provisions) with respect to the
determination, assessment, and collection of Federal taxes.”
S. REP. NO. 74-1240, at 11 (1935) (emphasis added).
 22
When reading the legislative history, the Supreme Court
declared: “[i]t is clear enough that one ‘radical departure’
which was averted by the amendment was the potential
circumvention of the ‘pay first and litigate later’ rule by way of
suits for declaratory judgments in tax cases.” Flora v. United
States, 362 U.S. 145, 165 (1960). By design, the DJA tax
exception serves a critical but limited purpose. It strips courts
of jurisdiction to circumvent the AIA by providing declaratory
relief in cases “restraining the assessment or collection of any
tax.” 28 U.S.C. § 2201(a). Our prior case law—that from
another era—also acknowledged the instructive role the DJA’s
legislative history plays in its construction. See, e.g., E. Ky.
Welfare Rights Org., 506 F.2d at 1285 n.11 (citing examples of
1935 cases attempting to circumvent the prohibitions of the
AIA by using the DJA); “Americans United” Inc., 477 F.2d at
1176. The same is true of the first court to describe the DJA
as “coterminous,” see McGlotten, 338 F. Supp. at 453 n.22, as
well as other circuits to consider the issue, see, e.g., In re
Leckie Smokeless Coal Co., 99 F.3d at 585; Ecclesiastical
Order of ISM of AM, 725 F.2d at 405.

Of course, “it is the enacted text rather than the unenacted
legislative history that prevails.” Owner-Operator Indep.
Drivers Ass’n, Inc. v. Mayflower Transit, LLC, 615 F.3d 790,
792 (7th Cir. 2010) (Easterbrook, J.). “Legislative
history—what would in contract interpretation be called
extrinsic ambiguity—does not justify revising a text that has no
intrinsic ambiguity or any difficulty in application.” Id.
Here, “with respect to Federal taxes” is intrinsically
ambiguous. It does not bar all suits against the IRS, and thus
does not encompass everything conceivably “with respect to
Federal taxes.” Having eliminated this broad interpretive
gloss, what is and is not “with respect to Federal taxes” is left a
mystery, with no great direction from the statutory text.
Although we have questioned the utility of relying on
 23
legislative history, see, e.g., Block v. Meese, 793 F.2d 1303,
1309–10 (D.C. Cir. 1986) (Scalia, J.), the legislative history of
the DJA is quite small—a single paragraph—and surprisingly
straightforward. It bears repeating: “Your committee believes
that the orderly and prompt determination and collection of
Federal taxes should not be interfered with.” S. REP. NO.
74-1240, at 11 (1935) (emphasis added).

Finally, a functional concern exists with construing the
DJA’s exception to bar relief otherwise allowed under the AIA.
The court would have jurisdiction to enjoin the parties
appearing before it, but not to declare their rights. This defies
common sense, however, “since an injunction of a tax and a
judicial declaration that a tax is illegal have the same
prohibitory effect on the federal government’s ability to assess
and collect taxes.” Bentsen, 82 F.3d at 933. A
non-coterminous reading of the two statutes thus poses an
insurmountable obstacle. The court would not have
jurisdiction to provide declaratory relief but could effectively
do so anyway.

The Supreme Court suggested an answer to this riddle in
Hibbs. Recall, Arizona taxpayers challenged the
constitutionality of an Arizona statute permitting tax credits for
contributions to Arizona parochial schools. 542 U.S. at 92.
To determine whether jurisdiction existed, the Court had to
interpret the Tax Injunction Act (TIA), 28 U.S.C. § 1341. The
TIA, “modeled” after the AIA, id. at 102, “shields state tax
collections from federal-court restraints,” id. at 104. Before
beginning its interpretive quest, the Court “identif[ied] the
relief sought.” Id. at 99. As Appellants do here, the Arizona
taxpayers sought both an injunction and a declaratory
judgment. Id. Rather than bifurcate the inquiry, however, as
we do here, the Court classified the requested remedies as a
single form of relief—“prospective relief only.” Id.
 24
(“Respondents seek prospective relief only. Specifically, their
complaint requests ‘injunctive relief . . . .’ Complaint 7, App.
15. . . . [,] a ‘declaration . . . .’ Ibid. [and] ‘[a]n order . . . .’
Complaint 7-8, App. 15.”); see also Grace Brethren Church,
457 U.S. at 408 (“[T]here is little practical difference between
injunctive and declaratory relief.”).

A coterminous reading of the DJA and the AIA makes
sense in light of Hibbs, which construed the relief Appellants
seek in the singular, as equitable relief, and not separately, as
an injunction and declaratory judgment. In this light, the case
is greatly simplified. The DJA falls out of the picture because
the scope of relief available under the DJA is subsumed by the
broader injunctive relief available under the AIA.

But what to make of the bugle sounding the textualist
battle cry? It is true, the AIA and DJA use different words.
But this observation does not beget a certain interpretive result.
A baker who receives an order for “six” donuts and another for
“half-a-dozen” does not assume the terms are requests for
different quantities of donuts. Similarly, a man does not
receive different directions to Dupont Circle if he is told by one
person to “take the Metro” and by another to “catch the Red
Line.” What the AIA accomplishes by denying its application
to “any suit for the purpose of restraining the assessment or
collection of any tax” the DJA accomplishes by an exception
“with respect to Federal taxes.” By nature, language is
simultaneously robust and precise. Different verbal
formulations can, and sometimes do, mean the same thing.

In sum, we hold that APA § 702’s waiver of sovereign
immunity permits Appellants’ APA cause of action and neither
the AIA nor DJA otherwise limits our review.
 25
III

We now consider whether Appellants state a valid cause of
action. Under § 704, “[a]gency action made reviewable by
statute and final agency action for which there is no other
adequate remedy in a court are subject to judicial review.”10 5
U.S.C. § 704. The IRS argues, and Appellants concede, if an
adequate remedy at law exists, equitable relief is not available
under the APA.

The IRS and the dissenting opinion contend § 7422(a) of
the Internal Revenue Code, the refund suit mechanism,
provides Appellants the relief they seek. 11 That provision
bars any lawsuit for recovery of excessive or wrongfully
collected taxes “until a claim for refund or credit has been duly
filed with the Secretary, according to the provisions of law in
that regard, and the regulations of the Secretary established in
pursuance thereof.” 26 U.S.C. § 7422(a).

At first blush, § 7422(a) does not apply. This is not a suit
“for the recovery of any internal revenue tax alleged to have
been erroneously or illegally assessed or collected.” Id.
Even if Appellants are entirely successful, they cannot recover
the wrongfully assessed tax unless they follow whatever new

10
Section 704 “is not a jurisdiction-conferring statute.” Trudeau,
456 F.3d at 183; see also Micei Int’l. v. Dep’t. of Commerce, 613
F.3d 1147, 1152 (D.C. Cir. 2010); Oryszak v. Sullivan, 576 F.3d 522,
525 n.2 (D.C. Cir. 2009).
11
To clarify, although 28 U.S.C. § 1346(a)(1) grants concurrent
jurisdiction to district courts and the Court of Federal Claims, the
Code speaks of refund suits as those filed “under section 7422(a),”
26 U.S.C. § 6532, and “filed with the Secretary,” id. § 7422(a).
 26
administrative procedures the IRS decides to implement. 12
This suit is an APA action; it questions the administrative
procedures by which the IRS allows taxpayers to request
refunds for the wrongfully collected excise tax. Moreover,
§ 7422(a) would not provide Appellants the equitable relief
they seek. Section 7422(a) provides “for the recovery of any
internal revenue tax.” Id. It does not, at least explicitly,
allow for prospective relief. The Service itself unknowingly
concedes this point, as it believes the AIA and DJA preclude
equitable remedies outside of a refund suit and is agnostic
concerning the availability of broad equitable remedies as part
of a refund suit. Apparently, even if § 7422(a) allowed for an
injunction or declaratory judgment, the relief would be
individualized, not class wide as Appellants seek. Each
taxpayer would have to litigate separately the Service’s use of
Notice 2006-50. As the IRS explained at oral argument: “just
because we lose in one court doesn’t mean that we give up.”
Oral Arg. Tr. 39.

The dissent assumes a refund suit provides an adequate
remedy at law. If this were the case, it is undisputed
Appellants would have to proceed through Notice 2006-50. If
adequate, Notice 2006-50 would render Appellants’ claims
unripe before they filed their refund actions. See Full Value

12
The dissent argues Appellants’ “objectives” are monetary:
“billions of dollars in additional refunds” and a “class-wide jackpot.”
Diss. Op. at 2, 3. But this framing is misleading. Although
Appellants may ultimately seek additional refunds if IRS Notice
2006-50 is invalidated and they succeed in substituting a more
“effective” (and perhaps more fruitful) refund mechanism in its
stead, Appellants’ APA suit is a distinct part of their bifurcated
litigation strategy. It offers no monetary relief, tax refund or
otherwise. Furthermore, the IRS is no victim. And Appellants are
not raiders in pursuit of an unwarranted windfall; they are aggrieved
citizens in search of accountability.
 27
Advisors, LLC v. SEC, No. 10-1053, slip op. at 9 (D.C. Cir.
Feb. 4, 2011) (“[Petitioner’s] failure to fully comply with the
Commission’s process (i.e. exhaust) has left some of its claims
unfit for review (i.e. unripe) and that is perhaps not surprising
given the two doctrines’ common origins; they are both
‘prudential doctrines’ designed to ‘respond to pragmatic
concerns about the relationship between courts and agencies.’”
(quoting John Doe, Inc. v. Drug Enforcement Admin., 484 F.3d
561, 567 (D.C. Cir. 2007))).

But the adequacy of Notice 2006-50 is the gravamen of
Appellants’ suit. Appellants claim Notice 2006-50 is
unlawful, and therefore inadequate, because it was not subject
to notice and comment rulemaking and is substantively
unreasonable. As a result, Appellants argue they do not have
to comply with Notice 2006-50 to challenge it. In support
they cite McCarthy v. Madigan, a case where the Supreme
Court cites several cases in which circumstances weighed
against requiring administrative exhaustion. 503 U.S. 140,
147–49 (1992). In Barry v. Barchi, a horse trainer challenged
a New York law allowing for summary suspension of his
professional license without a presuspension hearing. 443
U.S. 55, 60–62 (1979). The Board suspended Barchi’s license
for fifteen days, a time period shorter than the thirty days in
which the Board had to issue a final order. Id. at 59, 61. In
Gibson v. Berryhill, a state board, composed entirely of
members of the optometry association, sought to revoke the
licenses of a small number of optometrists who worked for a
corporation, a violation of the association’s membership code.
411 U.S. 564, 567–68 (1973). The threatened optometrists
argued the Board was unconstitutionally constituted. Id. at
569–70. Finally, in McCarthy itself, the Court declined to
require exhaustion because the Court found “Congress ha[d]
not meaningfully addressed the appropriateness of requiring
exhaustion in this context” and the plaintiff’s “individual
 28
interests outweigh[ed] countervailing institutional interests
favoring exhaustion.” 503 U.S. at 149. The Court
concluded: “exhaustion has not been required where the
challenge is to the adequacy of the agency procedure itself,
such that ‘the question of the adequacy of the administrative
remedy . . . [is] for all practical purposes identical with the
merits of [the plaintiff’s] lawsuit.’” Id. at 148 (quoting
Barchi, 433 U.S. at 63).

This is precisely such a case. Congress has not required
exhaustion in APA suits challenging the adequacy of IRS
procedures, only in suits “for the recovery of any internal
revenue tax.” 26 U.S.C. § 7422(a). Although the cases from
which the Court’s synthesis is drawn are distinguishable on
their facts, the animating principle is a perfect fit: it is
“improper to impose an exhaustion requirement” when the
allegation is that the “administrative remedy furnishes no
effective remedy at all.” Id. at 156 (Rehnquist, J., concurring
in the judgment).

In sum, this suit is sui generis. Allowing Appellants to
proceed without first filing a refund claim will not open the
courthouse door to those wishing to avoid administrative
exhaustion procedures in other cases. In the tax context, the
only APA suits subject to review would be those cases
pertaining to final agency action unrelated to tax assessment
and collection. More broadly, litigants could not avoid
exhaustion when challenging agency decisionmaking, because
McCarthy and its progeny apply only when litigants challenge
the exhaustion scheme itself. And once litigated, precedent
would preclude later litigants challenging exhaustion
procedures from relying on McCarthy in a court that had
previously rejected the same argument.
 29
The dissent argues Appellants fail to exhaust their claims
under either § 703 or § 704 of the APA because a tax refund
suit is an otherwise adequate procedure “for a taxpayer to
wrangle with the IRS over taxes, refunds, or the legality of IRS
tax collection or refund practices.” Diss. Op. at 6. But this
argument conflates the existence of an alternative remedy with
an “adequate remedy.” Even if equitable relief were possible
in a § 7422 proceeding, it would be cold comfort to direct
Appellants to proceed in a series of individual suits, submitting
themselves one by one to the very refund procedures that they
claim to be unlawful. The dissent suggests Appellants could
avoid this inefficiency by winning a single case that would
have preclusive effect across the nation. But the IRS has
already shown itself unwilling to accept the binding effect of
judicial opinions from one circuit to another, and the Supreme
Court is highly unlikely to provide a nationwide decree
because it rarely grants certiorari in an individual tax refund
dispute. Another obstacle to Supreme Court review arises
where, as here, the taxpayer wins at the appellate stage and is
left with no avenue for seeking certiorari. See Electr. Fittings
Corp. v. Thomas & Betts Co.¸ 307 U.S. 241, 242 (1939) (“A
party may not appeal from a judgment or decree in his
favor . . . .”); Camreta v. Greene, -- S. Ct. --, 2011 WL
2039369, at *2 (2011) (“As a matter of practice and prudence,
we have generally declined to consider cases at the request of a
prevailing party.”) Furthermore, the cases upon which the
dissent relies are inapposite. Clintwood Elkhorn, Hibbs,
“Americans United”, and Bob Jones involved taxpayer
challenges to the validity of an individual tax—paradigmatic
refund suits. See e.g., Clintwood Elkhorn, 553 U.S. at 4 (coal
tax); Hibbs, 542 U.S. at 103–04 (parochial school tax credits).
For example, “Americans United” and Bob Jones Univ.
addressed corporations’ status as § 501(c)(3) tax-exempt
non-profit organizations. See “Americans United” Inc., 416
U.S. at 762; Bob Jones, 416 U.S. at 746–47. None of the
 30
cases involved a challenge to an IRS regulation, action, or
procedure unrelated to the individual assessment or collection
of taxes. Cf. Foodservice & Lodging Inst., 809 F.2d at 846
n.10 (allowing APA challenge to IRS tip regulation without
individual refund suits).

Finally, the dissent concocts an extravagant scenario in an
effort to show that a refund suit would be an adequate
alternative remedy. In the dissent’s view, Appellants should
have “skip[ped] the administrative process altogether and
directly file[d] tax refund suits under 28 U.S.C. § 1346(a)(1).”
Diss. Op. at 10. Then, in order to rebuff the IRS’s inevitable
motion to dismiss for failure to exhaust administrative
remedies, the Appellants could assert that, under McCarthy,
their lack of exhaustion is excusable because the IRS’s
administrative remedies are unreasonable and unlawful. Id.

The first problem is, as explained above, this is not a
refund suit—Appellants are seeking equitable relief rather than
“recovery of any internal revenue tax.” 26 U.S.C. § 7422(a).
Therefore allowing Appellants’ APA suit to proceed does not
“duplicate existing procedures for review of agency action.”
Bowen v. Mass., 487 U.S. 879, 903 (1988). Indeed, allowing
judicial review of Appellants’ APA suit is consistent with the
APA’s underlying purpose—“remov[ing] obstacles to judicial
review of agency action,” Id. at 904 (quoting Shaughnessy v.
Pedreiro, 349 U.S. 48, 51 (1955),—and the proper
construction of § 704, Bowen, 487 U.S. at 904 (rejecting a
“restrictive” interpretation of § 704). Even putting that aside,
however, the dissent’s theory could contradict the language of
§ 7422, which states: “No suit or proceeding shall be
maintained in any court for the recovery of any internal
revenue tax . . . until a claim for refund or credit has been duly
filed with the Secretary.” This language seems not to make an
exception for suits challenging the legality of administrative
 31
procedures. Without deciding whether a McCarthy-based
objection to exhaustion procedures is cognizable in a refund
suit, we note that in McCarthy itself, “Congress ha[d] not
meaningfully addressed the appropriateness of requiring
exhaustion.” 503 U.S. at 149. And for this reason, it is far
from clear Appellants could challenge Notice 2006-50 in a
refund suit without first having to proceed through it.

The dissent’s defense of the IRS’s prerogatives is ironic.
The IRS promulgated Notice 2006-50 as a way to avoid
thousands of successful corporate refund suits and to spare
individuals, who—unlike their corporate counterparts—had no
incentive to pursue costly litigation against the IRS. By
promulgating the 2006 rule, the IRS effectively conceded a
case-by-case resolution would be both inefficient and unfair.
The moral of the dissent’s story is that such remedies are now
perfectly adequate.

IV

The IRS argues this suit is not ripe because it is a
“pre-enforcement” action. The aim of the ripeness doctrine is
to “prevent the courts, through avoidance of premature
adjudication, from entangling themselves in abstract
disagreements over administrative policies, and also to protect
the agencies from judicial interference until an administrative
decision has been formalized and its effects felt in a concrete
way by the challenging parties.” Abbott Labs. v. Gardner, 387
U.S. 136, 148–49 (1967), abrogated on other grounds by
Califano, 430 U.S. 99 (1977). “The ripeness inquiry probes
the fitness for review of the legal issue presented, along with
(in at least some cases) ‘the hardship to the parties of
withholding court consideration.’” Teva Pharm. USA, Inc. v.
Sebelius, 595 F.3d 1303, 1308 (D.C. Cir. 2010) (quoting Nat’l
Park Hospitality Ass’n v. Dep’t of Interior, 538 U.S. 803, 808
 32
(2003)); see also Nat’l Park Hospitality Ass’n, 538 U.S. at
807–08 (refusing to hear a pre-enforcement challenge because
agency guidelines did not carry the force of law); Unity08 v.
Fed. Election Comm’n, 596 F.3d 861, 865 (D.C. Cir. 2010)
(“[A] claim that a challenge to an agency’s final legal position
must await an enforcement proceeding is analyzed under the
ripeness doctrine’s requirement[] that issues be fit for
review . . . .”) “This court has long understood the approach
in Abbott Labs to incorporate a presumption of reviewability.”
Sabre, Inc. v. Dep’t of Transp., 429 F.3d 1113, 1119 (D.C. Cir.
2005) (citing Nat’l Automatic Laundry Cleaning Council v.
Shultz, 443 F.2d 689, 694 (D.C. Cir. 1971)); see also Nat’l
Ass’n of Home Builders v. U.S. Army Corps of Eng’rs, 417
F.3d 1272, 1282 (D.C. Cir. 2005) (quoting Nat’l Mining Ass’n
v. Fowler, 324 F.3d 752, 757 (D.C. Cir. 2003)).

We rejected the Service’s pre-enforcement argument at
the panel stage and did not grant en banc review to reconsider
it. The panel held this case was a post-enforcement action,
and therefore fit for review, because Notice 2006-50
constituted final and reviewable agency action barring
Appellants “from pursuing their refunds in court by virtue of
the fact that they did not exhaust their administrative remedies
under the only available avenue—Notice 2006-50.” Cohen,
578 F.3d. at 6–13; cf., McGuirl v. United States, 360 F. Supp.
2d 129, 132 (D.D.C. 2004) (reviewing post-enforcement
challenge); Nat’l Restaurant Ass’n, 411 F. Supp. at 995–99;
Tax Analysts & Advocates, 376 F. Supp. at 892, quoted
approvingly in Hibbs, 542 U.S. at 103–04 & n.6.

The dissent tweaks this argument by describing this case
as a “pre-application” challenge, rather than a
“pre-enforcement” challenge. Diss. Op. at 17. Thus, the
dissent shifts focus from the fitness of Notice 2006-50, which
the dissent concedes, Diss. Op. at 12, to the alleged “benefit”
 33
Appellants seek, i.e. the hardship inquiry. Diss. Op. at 15.
But again, conceiving of Appellants as taxpayers looking for a
handout is flawed. The APA does not offer any monetary
award. Nor is the money the IRS wrongfully took a benefit
the Service may choose (or not choose) to bestow upon
Appellants, such as amnesty for undocumented immigrants,
see Reno v. Catholic Social Services, 509 U.S. 43, 46 (1993),
or a government certification, see Toilet Goods Ass’n, Inc. v.
Gardner, 387 U.S. 158, 161, 165 (1967).

The dissent argues any delay caused by filing individual
refund claims would not “constitute [a] sufficient hardship.”
Diss. Op. at 13. But, in the context of APA challenges, we
have previously said “[lack of] hardship cannot tip the balance
against judicial review,” Nat’l Ass’n of Home Builders v. U.S.
Army Corps of Eng’rs, 440 F.3d 459, 465 (D.C. Cir. 2006)
(quoting Nat’l Mining Ass’n, 324 F.3d at 756–57) (alterations
in original), “is largely irrelevant,” Electric Power Supply
Ass’n v. FERC, 391 F.3d 1255, 1263 (D.C. Cir. 2004), and “is
not an independent requirement divorced from the
consideration of the institutional interests of the court and
agency,” AT&T Corp. v. FCC, 349 F.3d 692, 700 (D.C. Cir.
2003). “[O]nce we have determined that an issue is clearly fit
for review, there is no need to consider ‘the hardship to the
parties of withholding court consideration.’” Action for
Children’s Television v. FCC, 59 F.3d 1249, 1258 (D.C. Cir.
1995) (quoting Abbott Labs., 387 U.S. at 149). When the
hardship Appellants suffer is compliance with allegedly
unlawful administrative procedures, we have consistently held
claims are ripe for review. See Wyo. Outdoor Council v. U.S.
Forest Service, 165 F.3d 43, 51 (D.C. Cir. 1999) (dismissing
NEPA claim as unripe but considering procedural claim);
Action for Children’s Television, 59 F.3d at 1258. Moreover,
the Supreme Court implied the same in Reno—the case upon
which the dissent primarily relies. Reno, 509 U.S. at 60–61
 34
(distinguishing McNary v. Haitian Refugee Center, Inc., 498
U.S. 479, 487 (1991)).

The practical consequence of the dissent’s ripeness
argument is a judicially created exemption for the IRS from
suit under the APA. There may be good policy reasons to
exempt IRS action from judicial review. Revenue protection
is one. See Hibbs, 542 U.S. at 104–05. But Congress has not
made that call. Cf. 5 U.S.C. § 701(b)(1)(A)–(H) (stating
exceptions to the APA’s definition of “agency”); Hibbs, 542
U.S. at 105 (“Nowhere does the legislative history announce a
sweeping congressional direction to prevent ‘federal-court
interference with all aspects of state tax administration.’”);
Armstrong v. Bush, 924 F.2d 282, 289 (D.C. Cir. 1991)
(concluding, based on the legislative history of the APA,
Congress “wanted to avoid a formalistic definition of
‘agency’”). And we are in no position to usurp that choice on
the basis of ripeness. Cf. Mayo Found. for Med. Educ. & Res.
v. United States, 131 S. Ct. 704, 713 (2011) (noting in the
context of tax regulations “the importance of maintaining a
uniform approach to judicial review of administrative action”
(quoting Dickinson v. Zurko, 527 U.S. 150, 154 (1999)).

V

The litigation position of the IRS throughout the history of
the excise tax has been startling. But the taxpayers’ response
to Notice 2006-50 is not so shocking. After conceding the
excise tax was collected illegally, the Service set up a virtual
obstacle course for taxpayers to get their money back.

This suit is not about the excise tax, its assessessment, or
its illegal collection. Nor is it about the money owed the
taxpayers. This suit is about the obstacle course, and the
decisions made by the IRS while setting it up. As a result, we
 35
have federal question jurisdiction, and neither the AIA nor the
DJA provide a limitation on our exercise of it. Because
Appellants have no other adequate remedy at law, the district
court should consider the merits of their APA claim on remand.

So ordered.
 KAVANAUGH, Circuit Judge, with whom Chief Judge
SENTELLE and Circuit Judge HENDERSON join, dissenting:

From 2003 to 2006, millions of Americans paid excessive
taxes on long-distance telephone calls. In 2006, the
Government announced that it would refund the overpaid
taxes. In IRS Notice 2006-50 (in what we will refer to as the
2006 “refund rules”), the Government established a simple
process for obtaining refunds. Taxpayers who wanted to
claim a standard refund amount – ranging from $30 to $60 –
could simply check a box on their 2006 income tax returns.
Those who wished to claim an amount greater than the
standard amount could file a Form 8913 with their 2006
income tax returns and itemize the refund due. And those
who would not otherwise file a tax return for 2006 could file a
newly created Form 1040EZ-T to claim the standard amount,
and attach Form 8913 to claim an amount greater than the
standard. Those who missed out when filing their 2006 tax
returns could file – and even today, still can file – amended
2006 returns to claim the refund. Someone unsatisfied with
the refund amount or with the IRS’s refund rules could file a
tax refund suit in district court or the Court of Federal Claims.
See 28 U.S.C. § 1346(a)(1).

Approximately 90 million Americans followed those
simple instructions and promptly received their refunds. As
remedial government programs go, this one worked
reasonably well. 1

1
The majority opinion suggests that the IRS’s refund program
didn’t work well because the Government did not give refunds to
people who did not request refunds. See Maj. Op. at 5 n.4. We find
that an odd criticism. The IRS aggressively publicized the refund
procedure so that people who were due refunds would know how to
request them. Ninety million taxpayers managed to do so.
 2

The ten individual plaintiffs in this case were aware of
the 2006 refund rules. But so far as the record reveals, none
of them chose any of the readily available alternatives for
obtaining a refund. None checked the standard refund box on
their 2006 tax returns. Nor did any file a Form 8913 with
their 2006 tax returns to claim a refund amount greater than
the standard refund. Nor did any file a Form 1040EZ-T. Nor
did any file a tax refund suit to complain about the amount
available from the IRS or the refund rules.

Instead, plaintiffs decided to up the ante. They filed a
purported class-action lawsuit in U.S. District Court.
Plaintiffs sued under the Administrative Procedure Act,
claiming that the IRS’s 2006 refund rules were promulgated
without proper notice and that the refund scheme would not
fully compensate them for their overpaid taxes. Plaintiffs
seek declaratory and injunctive relief. They want a judicial
declaration that the refund scheme is unlawful and an
injunction ordering the Government to devise a new refund
process so as to correct the alleged flaws.

The reader may wonder why plaintiffs didn’t simply file
the relevant forms with the IRS to get refunds, and if
dissatisfied with the amounts they received or with the IRS’s
refund rules, bring individual tax refund suits. After all, each
plaintiff could have raised complaints about the refund rules
in such a case, and each plaintiff’s litigation would have long
since concluded by now. The answer seems to be that
plaintiffs are litigating primarily on behalf of others, not
themselves. Plaintiffs’ ultimate objectives are class
certification and a court order that the U.S. Government pay
billions of dollars in additional refunds to millions of as-yet-
unnamed individuals who never sought refunds from the IRS
or filed tax refund suits. It seems that plaintiffs have
deliberately avoided filing individual refund claims with the
IRS and filing tax refund suits because they think they have a
better chance of obtaining class certification if they don’t take
 3

those steps. And class certification is a necessary prerequisite
to the class-wide jackpot plaintiffs are seeking here.

In any event, regardless of this case’s unusual
background and its potentially large effect on the U.S.
Treasury, the present appeal raises only a straightforward
legal question.

The issue, boiled down to its essentials, is whether
plaintiffs can raise their objections to the 2006 refund rules in
this APA suit – or instead must raise their claims in tax refund
suits after first filing refund claims with the IRS. It is
important to underscore that the fundamental issue here is
timing: It concerns when plaintiffs can raise their objections
to the 2006 refund rules in court, not whether plaintiffs can
raise their objections to the 2006 refund rules in court.

For two alternative reasons, plaintiffs cannot maintain
this APA suit. First, the APA itself bars this suit because
plaintiffs have an adequate alternative judicial remedy,
namely tax refund suits. Second, under the ripeness doctrine,
plaintiffs must file refund claims with the IRS before bringing
suit to challenge the 2006 refund rules. We will address each
point in turn.

I

The Government contends that the Administrative
Procedure Act itself bars plaintiffs from maintaining this APA
suit. See Gov’t Br. at 63. We agree. Under §§ 703 and 704
of the APA, plaintiffs cannot maintain this APA suit because
they have an alternative congressionally specified judicial
forum in which to pursue their complaints about the 2006
refund rules – namely, a tax refund suit.

The APA provides for judicial review of agency action.
But the APA may not be invoked when Congress has
 4

specified other judicial review procedures. Section 703 of the
APA states: “The form of proceeding for judicial review is
the special statutory review proceeding relevant to the subject
matter in a court specified by statute,” provided that the
statutorily specified review proceeding is not “inadequa[te].”
5 U.S.C. § 703 (emphasis added). Relatedly, § 704 of the
APA provides: “Agency action made reviewable by statute
and final agency action for which there is no other adequate
remedy in a court are subject to judicial review.” 5 U.S.C.
§ 704 (emphasis added).

For our purposes, both provisions make the same point:
A party cannot bring a freestanding APA suit when Congress
has specified a different judicial review procedure “relevant to
the subject matter,” so long as that congressionally specified
review procedure is “adequate.” See, e.g., ATTORNEY
GENERAL’S MANUAL ON THE ADMINISTRATIVE PROCEDURE
ACT 101 (1947) (describing adequate remedy under § 704 by
cross-reference to § 703). 2

As the Supreme Court has explained, the APA “does not
provide additional judicial remedies in situations where the
Congress has provided special and adequate review
procedures.” Bowen v. Massachusetts, 487 U.S. 879, 903
(1988). 3

2
Those § 703 and § 704 requirements are related to a bedrock
principle of the American legal system: Equitable relief is not
available when there is an adequate remedy at law. See Judiciary
Act of 1789, § 16, 1 Stat. 73, 82; Bob Jones Univ. v. Simon, 416
U.S. 725, 742 n.16 (1974) (referring to “the background of general
equitable principles disfavoring the issuance of federal injunctions
against taxes, absent clear proof that available remedies at law were
inadequate”); Richards v. Delta Airlines, Inc., 453 F.3d 525, 531
n.6 (D.C. Cir. 2006) (“The general rule is that injunctive relief will
not issue when an adequate remedy at law exists.”).
3
Numerous cases have applied that principle. See ICC v.
Brotherhood of Locomotive Engineers, 482 U.S. 270, 282 (1987)
 5

(“Hobbs Act specifies the form of proceeding for judicial review of
ICC orders,” citing § 703); Whitney Nat’l Bank in Jefferson Parish
v. Bank of New Orleans & Trust Co., 379 U.S. 411, 420 (1965)
(“where Congress has provided statutory review procedures
designed to permit agency expertise to be brought to bear on
particular problems, those procedures are to be exclusive”); Garcia
v. Vilsack, 563 F.3d 519, 523-25 (D.C. Cir. 2009) (discrimination
suit against Department of Agriculture afforded an “adequate
remedy in court” and thus precluded APA challenge); Watts v. SEC,
482 F.3d 501, 508 (D.C. Cir. 2007) (“a challenge to an agency’s
refusal to comply with a Rule 45 subpoena should proceed and be
treated not as an APA action but as a Rule 45 motion to compel,”
citing § 703); Wright v. Dominguez, No. 04-5055, 2004 WL
1636961, at *1 (D.C. Cir. 2004) (de novo district court review of
decisions of Equal Employment Opportunity Commission
precluded APA challenge to EEOC’s procedures); Women’s Equity
Action League v. Cavazos, 906 F.2d 742, 750-51 (D.C. Cir. 1990)
(individual private suits against institutions afforded adequate
remedy to private parties alleging discrimination under Titles VI
and IX; Court noted that “under our precedent, situation-specific
litigation affords an adequate, even if imperfect, remedy”); Coker v.
Sullivan, 902 F.2d 84, 89-90 (D.C. Cir. 1990) (judicial review of
state administrative hearings and federal suit against offending
states afforded adequate remedy in court to preclude APA suit
seeking to compel the Department of Health and Human Services to
enforce states’ compliance with emergency assistance plans);
Cabais v. Egger, 690 F.2d 234, 240-41 (D.C. Cir. 1982) (challenge
to individual benefit reduction afforded “adequate remedy in court”
to Social Security recipients seeking to challenge the Department of
Labor’s interpretation of a federal statute); Nassar & Co. v. SEC,
566 F.2d 790, 792 n.3 (D.C. Cir. 1977) (where there was statutory
procedure for obtaining review of an SEC order, APA suit for
declaratory judgment was barred); Nader v. Volpe, 466 F.2d 261,
266 (D.C. Cir. 1972) (“when Congress has specified a procedure
for judicial review of administrative action, courts will not make
nonstatutory remedies available without a showing of patent
violation of agency authority or manifest infringement of
substantial rights irremediable by the statutorily-prescribed method
of review”) (footnote omitted).
 6

The Supreme Court has summarized the key principle in
terms that are directly on point in this case: “Congress did not
intend the general grant of review in the APA to duplicate
existing procedures for review of agency action.” Id.; see
also Darby v. Cisneros, 509 U.S. 137, 146 (1993) (“Congress
intended by [§ 704] simply to avoid duplicating previously
established special statutory procedures for review of agency
actions.”).

Here, Congress has established a judicial procedure that,
to use the terms of § 703, is “relevant to the subject matter” –
namely, a tax refund suit. Section 1346(a)(1) of Title 28
provides:

The district courts shall have original jurisdiction,
concurrent with the United States Court of Federal
Claims, of . . . [a]ny civil action against the United States
for the recovery of any internal-revenue tax alleged to
have been erroneously or illegally assessed or collected,
or any penalty claimed to have been collected without
authority or any sum alleged to have been excessive or in
any manner wrongfully collected under the internal-
revenue laws . . . .

As the Supreme Court and this Court have explained on many
occasions, the tax refund suit is a statutorily designed judicial
procedure for a taxpayer to wrangle with the IRS over taxes,
refunds, or the legality of IRS tax collection or refund
practices. See generally United States v. Clintwood Elkhorn
Mining Co., 553 U.S. 1, 4 (2008); Hibbs v. Winn, 542 U.S. 88,
103-04 (2004); United States v. Williams, 514 U.S. 527, 536
(1995); Alexander v. “Americans United” Inc., 416 U.S. 752,
762 (1974); Bob Jones Univ. v. Simon, 416 U.S. 725, 746-47
(1974); Inv. Annuity, Inc. v. Blumenthal, 609 F.2d 1, 9 (D.C.
Cir. 1979).
 7

The only remaining question is whether the tax refund
suit is “adequate” here. It plainly is. In tax refund suits,
plaintiffs and others similarly situated could obtain judicial
review of their complaints about the 2006 refund rules. In
such suits, plaintiffs could obtain the larger refunds they
seek, 4 as well as appropriate injunctive or declaratory relief.
See South Carolina v. Regan, 465 U.S. 367, 373-81 & 377-78
n.16 (1984); Americans United, 416 U.S. at 761-62; Bob
Jones, 416 U.S. at 748 n.22. 5

4
Plaintiffs acknowledge that they ultimately want additional
refunds of the taxes wrongly collected, in addition to equitable
relief. Indeed, they would not have standing to challenge the 2006
refund rules unless they wanted additional refunds.
5
In challenging the adequacy of tax refund suits, plaintiffs hint
that declaratory and injunctive relief might be available only in
APA suits, and not in tax refund suits. That is wrong; indeed, the
Supreme Court has indicated just the opposite.
To begin with, the Declaratory Judgment Act bars declaratory
relief “with respect to Federal taxes,” 28 U.S.C. § 2201(a), and the
Anti-Injunction Act bars injunctions “for the purpose of restraining
the assessment or collection of any tax,” 26 U.S.C. § 7421(a). By
their terms, those statutory bars apply in APA suits as well as in tax
refund suits. See 5 U.S.C. § 702 (preserving “other limitations on
judicial review”). Therefore, if a taxpayer could obtain equitable
relief in an APA suit, as plaintiffs here argue, the taxpayer could
also obtain such relief in a tax refund suit. That point alone suffices
to show that the tax refund suit is an adequate forum for plaintiffs
to seek appropriate declaratory and injunctive relief.
In addition, precedent demonstrates that declaratory relief and
injunctive relief are available in tax refund suits. The Supreme
Court has indicated that injunctive relief is available in the tax
context, despite the terms of the Anti-Injunction Act. See South
Carolina v. Regan, 465 U.S. at 373-81 & 377-78 n.16; Bob Jones,
416 U.S. at 748 n.22. Moreover, the Supreme Court has suggested
that injunctive relief would be available only in tax refund suits –
and not in APA suits – where, as here, Congress has provided tax
refund suits as “an alternative avenue for an aggrieved party to
litigate its claims.” South Carolina v. Regan, 465 U.S. at 381;
 8

Because plaintiffs can raise their objections to the 2006
refund rules and obtain tax refunds and appropriate equitable
relief in a tax refund suit, the tax refund suit is an adequate
alternative judicial procedure. 6 The majority opinion seems
to suggest that the tax refund suit is not adequate because the
2006 refund rules are alleged to be unlawful. See Maj. Op. at
27-28. That badly misstates the relevant issue. The merits of
plaintiffs’ claims are distinct from the adequacy of the
specified judicial review procedure. The proper question here

compare id. at 373-81 & 377-78 n.16 (injunction available in non-
tax-refund suit only because plaintiffs could not pursue tax refund
suit) with Bob Jones, 416 U.S. at 748 & n.22 (injunction not
available in APA suit because plaintiffs could pursue tax refund
suit); see also Americans United, 416 U.S. at 761-62. The Supreme
Court has not had occasion to expressly state that it would allow
claims for declaratory relief in tax refund suits, although that
presumably also would be permitted under the South Carolina v.
Regan/Americans United/Bob Jones reasoning. After all, injunctive
relief typically entails a declaration plus an order to do or refrain
from doing something, meaning that declaratory relief is, in
essence, a lesser-included version of injunctive relief. As plaintiffs
rightly say, it would be “logically incoherent” and “nonsensical” to
allow injunctive relief but forbid declaratory relief. See Cohen Br.
at 22, 37; see also California v. Grace Brethren Church, 457 U.S.
393, 408 (1982) (“there is little practical difference between
injunctive and declaratory relief”).
Finally, it bears mention that the Government has
acknowledged that plaintiffs could obtain appropriate declaratory
and injunctive relief in tax refund suits. See Tr. of Oral Arg. at 39-
41.
6
Even if there were somewhat greater equitable relief
available in this APA suit than in a tax refund suit (which there
isn’t), we have said that “the alternative remedy need not provide
relief identical to relief under the APA, so long as it offers relief of
the ‘same genre.’” Garcia, 563 F.3d at 522 (quoting El Rio Santa
Cruz Neighborhood Health Ctr. v. Dep’t of Health & Human
Services, 396 F.3d 1265, 1272 (D.C. Cir. 2005)).
 9

is whether the tax refund suit is an adequate forum for
plaintiffs to raise their arguments that the 2006 refund rules
are unlawful. The answer is yes. 7

The majority opinion seems to think that, in invoking
§§ 703 and 704, we are advancing an exhaustion argument.
See Maj. Op. at 26-29. We are not. There is a difference
between (i) the doctrine requiring exhaustion of
administrative remedies and (ii) the §§ 703/704 principle that
applies when, as here, Congress has provided alternative
judicial procedures. Bowen, 487 U.S. at 903. The Supreme
Court in Bowen distinguished those two principles. Id. at
902-03. The majority opinion here melds them into an
undifferentiated stew and then uses administrative exhaustion
case law to try to respond to our §§ 703/704 argument. The
cases concerning exhaustion of administrative remedies are
not responsive to our §§ 703/704 argument. The §§ 703/704
question is whether the tax refund suit is the proper judicial
forum specified by Congress for plaintiffs to raise their
claims. 8

7
The majority opinion cites one case from 1987 in which this
Court allowed a suit that might have been brought as a refund suit
to proceed under the APA. See Foodservice & Lodging Inst., Inc.
v. Regan, 809 F.2d 842, 846 (D.C. Cir. 1987). But that case did not
address the §§ 703/704 point about alternative judicial procedures
specified by Congress. It is therefore obviously not a relevant
precedent on the §§ 703/704 issue. See Arizona Christian School
Tuition Organization v. Winn, 131 S. Ct. 1436, 1448-49 (2011)
(conclusion overlooked, not raised, or assumed sub silentio in prior
cases is not precedent).
8
APA §§ 703 and 704 require plaintiffs to bring their claims
in tax refund suits; in those tax refund suits, plaintiffs in turn would
be statutorily required – absent some legitimate exception to the
exhaustion requirement – to first exhaust their administrative
remedies. See 26 U.S.C. § 7422(a) (“No suit or proceeding shall be
maintained in any court for the recovery of any internal revenue tax
alleged to have been erroneously or illegally assessed or collected,
 10

In response to this point, the majority opinion relies
heavily on McCarthy v. Madigan, 503 U.S. 140, 148 (1992),
which says that administrative exhaustion sometimes may not
be required when a plaintiff challenges the adequacy of the
administrative procedures themselves. Reliance on McCarthy
simply highlights the majority opinion’s confusion about the
§§ 703/704 issue and about the distinction between
exhaustion of administrative remedies and alternative judicial
procedures. In tax refund suits, plaintiffs can raise all of their
arguments – including about the adequacy of the
administrative exhaustion requirement that applies in tax
refund suits as a result of 26 U.S.C. § 7422(a). To be very
clear and very specific: Plaintiffs here could try to skip the
administrative process altogether and directly file tax refund
suits under 28 U.S.C. § 1346(a)(1). In such tax refund suits,
if plaintiffs had not first exhausted their administrative
remedies, the IRS no doubt would move to dismiss the suits
because of plaintiffs’ failure to exhaust pursuant to 26 U.S.C.
§ 7422(a). At that point, plaintiffs could raise to the courts
their McCarthy-based argument that they do not have to
exhaust administrative remedies – for example, if they believe

or of any penalty claimed to have been collected without authority,
or of any sum alleged to have been excessive or in any manner
wrongfully collected, until a claim for refund or credit has been
duly filed with the Secretary, according to the provisions of law in
that regard, and the regulations of the Secretary established in
pursuance thereof.”).
Contrary to what the Government argues, the § 7422(a)
exhaustion requirement would apply not because § 7422(a) itself
requires that this APA suit be deemed a tax refund suit preceded by
exhaustion of administrative remedies. Rather, the § 7422(a)
exhaustion requirement would apply because §§ 703 and 704 of the
APA, in conjunction with 28 U.S.C. § 1346(a)(1), require plaintiffs
to bring their claims in tax refund suits, and § 7422(a) in turn
requires exhaustion in those tax refund suits.
 11

the exhaustion requirement is unconstitutional. 9 And the
courts considering the refund suits could address plaintiffs’
McCarthy-based no-need-to-exhaust arguments. The courts
may well reject such attempts to evade the exhaustion
requirement. Even so, the burden of participating in a
statutorily imposed exhaustion requirement does not make an
alternative judicial forum inadequate for purposes of APA
§§ 703/704. The key point is that in tax refund suits,
plaintiffs could raise any complaint they have about the 2006
tax refund rules – including any complaint they have about
the exhaustion requirement that attaches to tax refund suits.
Given that undisputed fact, McCarthy is no answer to our
main point here: APA §§ 703/704 require dismissal of this
APA suit because the tax refund suit is the congressionally
specified judicial forum “relevant to the subject matter.” 5
U.S.C. § 703.

In sum, the tax refund suit is the proper judicial forum for
plaintiffs to raise their complaints about the 2006 refund rules.
Because the tax refund suit is a special statutory judicial
review proceeding relevant to the subject matter and because
it is an adequate forum, plaintiffs cannot maintain this APA
challenge to the 2006 refund rules.

II

The Government alternatively raises a mix of
administrative exhaustion, finality, and ripeness principles in
arguing that plaintiffs must file refund claims with the IRS
before suing. See Gov’t Br. at 54-69. Those three doctrines
are notoriously intermingled. See 2 RICHARD J. PIERCE, JR.,
ADMINISTRATIVE LAW TREATISE § 15.17 (5th ed. 2010)
(exhaustion, finality, and ripeness “overlap significantly, and

9
In the two cases McCarthy cited in describing this exception,
the plaintiffs had argued that the exhaustion requirement was
unconstitutional. See 503 U.S. at 148.
 12

. . . are sometimes indistinguishable”); Ticor Title Ins. Co. v.
FTC, 814 F.2d 731 (D.C. Cir. 1987) (three-judge panel issued
three separate opinions for a unanimous conclusion: one
based on exhaustion, one based on finality, and one based on
ripeness).

We conclude that the ripeness doctrine precludes
consideration of plaintiffs’ claims at this time and requires
plaintiffs to file refund claims with the IRS before suing.
(The ripeness bar is separate from and in addition to the APA
§§ 703/704 bar that we discussed above.)

“Ripeness is a justiciability doctrine” that is “drawn both
from Article III limitations on judicial power and from
prudential reasons for refusing to exercise jurisdiction.” Nat’l
Park Hospitality Ass’n v. Dep’t of Interior, 538 U.S. 803,
807-08 (2003). A challenge to an agency regulation is ripe
for judicial review where (i) the issue is fit for decision and
(ii) delay would impose hardship on the plaintiffs. In the
classic formulation, the Supreme Court stated that a claim is
ripe where “the legal issue presented is fit for judicial
resolution, and where [the] regulation requires an immediate
and significant change in the plaintiffs’ conduct of their
affairs with serious penalties attached to noncompliance.”
Abbott Laboratories v. Gardner, 387 U.S. 136, 153 (1967).

The principal issue here concerns the second prong of the
ripeness doctrine: hardship. Do the 2006 refund rules require,
in the words of Abbott Laboratories, “an immediate and
significant change in the plaintiffs’ conduct of their affairs
with serious penalties attached to noncompliance?” Id. at
153. The answer is obviously no. Unlike a regulation that
imposes obligations or prohibits conduct (backed by
sanctions), a payment scheme like that established by the
2006 refund rules does not require “an immediate and
significant change” in plaintiffs’ conduct.
 13

To borrow the words of a recent Supreme Court ripeness
decision, the 2006 tax refund procedure “does not command
anyone to do anything or to refrain from doing anything; it
does not grant, withhold, or modify any formal legal license,
power, or authority; it does not subject anyone to any civil or
criminal liability; and it creates no legal rights or obligations.”
Nat’l Park Hospitality Ass’n, 538 U.S. at 809 (applying
Abbott Laboratories and quoting Ohio Forestry Ass’n, Inc. v.
Sierra Club, 523 U.S. 726, 733 (1998)) (alterations omitted).
Rather, the refund rules mark a path for taxpayers to obtain
money back from the Government. The refund scheme
“leaves a [taxpayer] free to conduct its business as it sees fit.”
Nat’l Park Hospitality Ass’n, 538 U.S. at 810. Thus,
requiring plaintiffs to challenge the refund rules only after
they apply to the IRS for refunds will have “no irremediably
adverse consequences” for plaintiffs. Id. (alteration
omitted). 10

Moreover, it is well settled that the mere “burden of
participating in further administrative and judicial
proceedings does not constitute sufficient hardship” for
purposes of the ripeness analysis. AT&T Corp. v. FCC, 349
F.3d 692, 702 (D.C. Cir. 2003); see also Ohio Forestry Ass’n,
523 U.S. at 734-35 (burden of going through additional

10
See also Reno v. Catholic Social Services, Inc., 509 U.S. 43,
57-61 (1993) (no hardship in requiring aliens to apply for amnesty
under agency’s amnesty rules before suing to challenge agency’s
amnesty rules); Toilet Goods Ass’n, Inc. v. Gardner, 387 U.S. 158,
164-66 (1967) (no hardship where “the impact of the administrative
action could [not] be said to be felt immediately by those subject to
it in conducting their day-to-day affairs”); Devia v. NRC, 492 F.3d
421, 427 (D.C. Cir. 2007) (claim of hardship “insubstantial” when
party “not required to engage in, or to refrain from, any conduct”);
Sprint Corp. v. FCC, 331 F.3d 952, 958 (D.C. Cir. 2003) (no
hardship where agency action leaves plaintiff “free to conduct its
business as it sees fit” and there are no “adverse effects of a strictly
legal kind”) (quoting Ohio Forestry Ass’n, 523 U.S. at 733).
 14

proceedings is not a sufficient hardship to render an agency
action ripe for review); Nuclear Energy Institute, Inc. v. EPA,
373 F.3d 1251, 1313 (D.C. Cir. 2004) (requiring party to raise
claims in agency and judicial proceedings “works no hardship
. . . sufficient to render its claims ripe”); Clean Air
Implementation Project v. EPA, 150 F.3d 1200, 1205 (D.C.
Cir. 1998) (requiring party to raise claim in agency
proceeding is not sufficient hardship for purposes of
ripeness); Florida Power & Light Co. v. EPA, 145 F.3d 1414,
1421 (D.C. Cir. 1998) (“The only conceivable hardship
Florida P&L will endure as a result of postponement is the
burden of participating in further administrative and judicial
proceedings. Such claims, however, do not constitute
sufficient hardship for the purposes of ripeness.”). Here,
therefore, the burden of filing a refund claim with the IRS
before suing does not constitute sufficient hardship for
purposes of the Abbott Laboratories ripeness inquiry.

Plaintiffs and the majority opinion suggest that it would
be easier to mount one APA challenge rather than a series of
individual tax refund suits. See Maj. Op. at 26, 29. But as the
Supreme Court has explained in a similar context, that theory
“does not explain . . . why one initial site-specific victory (if
based on the Plan’s unlawfulness) could not, through
preclusion principles, effectively carry the day. And, in any
event, the Court has not considered this kind of litigation cost
saving sufficient by itself to justify review in a case that
would otherwise be unripe.” Ohio Forestry Ass’n, 523 U.S. at
734-35 (citation omitted); see also Clean Air Implementation
Project, 150 F.3d at 1206. The Supreme Court has stated that
the “case-by-case approach that this requires” is “the
traditional, and remains the normal, mode of operation of the
courts.” Lujan v. Nat’l Wildlife Fed’n, 497 U.S. 871, 894
(1990).

Put simply, the general ripeness principle that emerges
from the case law and that governs here is this: When an
 15

agency rule prohibits conduct backed by sanctions or imposes
an obligation backed by sanctions, an aggrieved party often
may challenge the rule immediately and need not wait to
challenge it in its defense to an enforcement action after
violating the rule. The rationale is that a party should not be
forced into the “dilemma” of violating an allegedly unlawful
rule and risking a heavy sanction “if they’ve guessed wrong
and the rule is upheld in the penalty proceeding.” Abbs v.
Sullivan, 963 F.2d 918, 926 (7th Cir. 1992) (internal citations
omitted); see also Reno v. Catholic Social Services, Inc., 509
U.S. 43, 57 (1993) (describing this “dilemma”). By contrast,
as the Supreme Court decided in Reno v. Catholic Social
Services, when an agency rule establishes criteria for an
individual to obtain money or a benefit of some kind from the
government, a party must first apply to the government for the
money or benefit before bringing suit to challenge the agency
rule. See 509 U.S. at 57-61. Requiring a party to apply for
the money or benefit before suing to challenge the agency rule
does not pose the Abbott Laboratories “dilemma” because the
party will not face any sanctions if the rule is ultimately
upheld. 11

Allowing this APA suit to go forward at this time is flatly
inconsistent with the ripeness principles articulated in cases
such as Abbott Laboratories, Reno v. Catholic Social
Services, and National Park Hospitality Association.
Plaintiffs must file a refund claim with the IRS before
bringing suit.

11
Professor Pierce has described the Court’s ripeness
jurisprudence as precluding “pre-application judicial review of any
rule that purports to describe criteria for obtaining any form of
government benefit, e.g., social security, veterans benefits, any
license, or exemption from any regulatory obligation.” 2 RICHARD
J. PIERCE, JR., ADMINISTRATIVE LAW TREATISE § 15.14 (5th ed.
2010).
 16

It is true that our Court – albeit not the Supreme Court –
has sometimes permitted judicial review when an issue was fit
for resolution, notwithstanding a lack of hardship to the
plaintiffs from waiting, so long as there were “no significant
agency or judicial interests militating in favor of delay.”
Nat’l Ass’n of Home Builders v. U.S. Army Corps of Eng’rs,
440 F.3d 459, 465 (D.C. Cir. 2006) (quoting Nat’l Mining
Ass’n v. Fowler, 324 F.3d 752, 756-57 (D.C. Cir. 2003); see
also Electric Power Supply Ass’n v. FERC, 391 F.3d 1255,
1263 (D.C. Cir. 2004) (“The hardship prong under the
ripeness doctrine is largely irrelevant in cases . . . in which
neither the agency nor the court have a significant interest in
postponing review.”); AT&T Corp. v. FCC, 349 F.3d 692, 700
(D.C. Cir. 2003) (“where there are no institutional interests
favoring postponement of review, a petitioner need not satisfy
the hardship prong”); Action for Children’s Television v.
FCC, 59 F.3d 1249, 1258 (D.C. Cir. 1995) (“there is no need
to consider the hardship to the parties of withholding court
consideration, [where] there would be no advantage to be had
from delaying review”) (internal quotation marks and citation
omitted).

But here, there are “significant agency or judicial
interests militating in favor of delay.” Nat’l Ass’n of Home
Builders, 440 F.3d at 465. Those interests are some of the
very interests that are protected by the ripeness doctrine: the
courts’ interest in not “entangling themselves in abstract
disagreements over administrative policies,” and the IRS’s
interest in being protected from “judicial interference until an
administrative decision has been formalized and its effects felt
in a concrete way by the challenging parties.” Abbott
Laboratories, 387 U.S. at 148-49; see also Ohio Forestry
Ass’n, 523 U.S. at 735-37. For example, plaintiffs claim that
it was too difficult for taxpayers to gather the paperwork
needed to justify a claim for more than the standard refund
amount. That is precisely the kind of claim where court
review would benefit from prior agency application and
 17

analysis. Indeed, if the agency agreed with a taxpayer’s
argument on that issue, there would be no need for judicial
involvement at all. Also, plaintiffs claim that the IRS did not
provide adequate notice of the refund procedure. That too is
the kind of claim where judicial resolution would benefit from
a considered agency analysis of the design and limitations of
the notification process.

In any event and perhaps more to the point, we don’t
need to guess how the Abbott Laboratories test applies to the
kind of agency rule at issue here. The Supreme Court has told
us how – in cases such as Reno v. Catholic Social Services
and National Park Hospitality Association. Those cases stand
for the proposition that pre-application challenges to rules that
set forth criteria for government payments or benefits are not
ripe.

***

Under the APA, plaintiffs must file tax refund suits to
raise their complaints about the 2006 refund rules.
Alternatively, the ripeness doctrine precludes plaintiffs from
suing until after they file refund claims with the IRS. For
either of those two alternative and independent reasons,
plaintiffs’ APA suit should be dismissed. 12 We respectfully
dissent.
12
In arguing that we should not entertain plaintiffs’ APA claim
now, the Government also raises yet another alternative argument:
that the Declaratory Judgment Act and the Anti-Injunction Act
together bar APA suits challenging IRS refund rules. That
argument raises extremely difficult issues of statutory
interpretation, as the panel opinions in this case explored. But that
statutory question ultimately is not necessary to our resolution of
the case because §§ 703/704 of the APA and the ripeness doctrine
each independently bar this suit. The majority opinion chides us for
not addressing the additional statutory issue regarding the
Declaratory Judgment and Anti-Injunction Acts. See Maj. Op.
 18

at 11. Having found two separate and independent bars to
plaintiffs’ suit, we see no need to consider the several other
objections raised by the Government. Of course, in order to allow
this suit to go forward, the majority opinion by contrast must
consider and reject each of the Government’s objections. That’s
why the majority opinion needs to address the statutory issue
regarding the Declaratory Judgment and Anti-Injunction Acts, and
we do not.