Laing v. United States

Mr. Justice Marshall

delivered the opinion of the Court.

These companion cases involve two taxpayers whose taxable years were terminated by the Internal Revenue Service (IRS) prior to their normal expiration date pursuant to the jeopardy-termination provisions of § 6851 (a)(1) of the Internal Revenue Code of 1954 (Code), 26 U. S. C. § 6851 (a)(1).1 Section 6851 (a)(1) allows the IRS immediately to terminate a taxpayer’s taxable period when it finds that the taxpayer intends to do any act tending to prejudice or render ineffectual the collection of his income tax for the current or preceding tax*164able year. Upon termination the tax is immediately owing and, after notice, the IRS may, and usually does, levy upon the taxpayer’s property under § 6331 (a) of the Code, 26 U. S. C. § 6331 (a), to assure payment.

We must decide whether the IRS, when assessing and collecting the unreported tax due after the termination of a taxpayer’s taxable period, must follow the procedures mandated by § 6861 et seq. of the Code, 26 U. S. C. § 6861 et seq., for the assessment and collection of a deficiency whose collection is in jeopardy.2 The answer, as we shall see, depends on whether the unreported tax due upon such a termination is a “deficiency” as defined in § 6211 (a) of the Code, 26 U. S. C. § 6211 (a) (1970 ed. and Supp. IV). The Government argues that the tax liability that arises after a § 6851 termination cannot be a “deficiency,” and that the procedures for the assessment and collection of deficiencies in jeopardy are therefore inapplicable. We reject this argument. We agree with the taxpayers that any tax owing, but unreported, after a § 6851 termination is a deficiency, and that the assessment of that deficiency is subject to the provisions of § 6861 et seq. We reverse in No. 73-1808 and affirm in No. 74-75.

I

A. No. 73-1808, Laing v. United States. Petitioner James Burnett McKay Laing is a citizen of New Zea*165land. He entered the United States from Canada on a temporary visitor’s visa on May 31, 1972. On the following June 24, Mr. Laing and two companions sought to enter Canada from Vermont but were refused entry by Canadian officials. As they turned back, they were detained by United States customs authorities at Derby, Vt. Upon a search of the vehicle in which the three were traveling, the customs officers discovered in the engine compartment a suitcase containing more than $300,000 in United States currency. The IRS District Director found that petitioner Laing and his companions were in the process of placing assets beyond the reach of the Government by removing them from the United States, thereby tending to prejudice or render ineffectual the collection of their income tax.3 He declared the taxable periods of petitioner and his companions immediately terminated under § 6851 (a). An assessment of $310,000 against each was orally asserted for the period from January 1 through June 24, 1972. The assessment against Mr. Laing was subsequently abated to the amount of $195,985.55 when a formal letter-notice of termination and demand for payment and the filing of a return were sent. Mr. Laing received no deficiency notice under § 6861 (b) and no specific information about how the amount of the tax was determined.4

After Mr. Laing and his companions refused to pay the tax, the IRS seized the currency that had been found *166in the vehicle. A portion thereof was applied to the tax assessed against Mr. Laing.5

On July 15, petitioner filed suit against the United States, the Commissioner of Internal Revenue, the District Director, and the Chief of the Collection Division, District of Vermont, in the United States District Court for the District of Vermont. He asserted the absence of a notice of deficiency, which he claimed was required under § 6861 (b), and he challenged as violative of due process both the provisions of the levy and distraint statute, § 6331 (a), and the actions of the IRS in seizing and retaining the currency “without any finding of a substantial or probable nexus between that money and taxable income.” App. in No. 73-1808, p. 20.6

The District Court, relying on its controlling court’s decision in Irving v. Gray, 479 F. 2d 20 (CA2 1973), held that a notice of deficiency is not required when a taxable period is terminated pursuant to § 6851 (a)(1), and dismissed the suit as prohibited by the Federal Anti-Injunction Act, § 7421 (a) of the Code, 26 U. S. C. § 7421 (a), and as within the plain wording of the exception to the Declaratory Judgment Act, 28 U. S. C. § 2201, for a controversy with respect to federal taxes. 364 F. Supp, 469 (1973).

Adhering to its earlier ruling in Irving, the Second Circuit affirmed per curiam. 496 F. 2d 853 (1974). It expressly declined to follow the Sixth Circuit’s decision in Rambo v. United States, 492 F. 2d 1060 (1974).7 These rulings of the Second Circuit, and one of the *167Seventh Circuit, Williamson v. United States, 31 A. F. T. R. 2d 73-800 (1971), appeared to be in conflict with holdings by other Courts of Appeals, Rambo v. United States, supra; Hall v. United States, 493 F. 2d 1211 (CA6 1974); and Clark v. Campbell, 501 F. 2d 108 (CA5 1974).8 Suggesting that the conflict was irreconcilable and noting that some 70 pending cases in the federal courts depended on its resolution, the Solicitor General did not oppose Mr. Laing’s petition for certiorari. We granted certiorari to resolve the conflict.9 419 U. S. 824 (1974).

B. No. 74-75, United States v. Hall. Respondent Elizabeth Jane Hall is a resident of Shelbyville, Ky. After the arrest of her husband in Texas on drug-related charges, Kentucky state troopers obtained a warrant and searched respondent’s home on January 31, 1973. They found controlled substances there. The next day the Acting District Director notified respondent Hall by letter that he found her “involved in illicit drug activities, thereby tending to prejudice or render ineffectual collection of income tax for the period 1-1-73 thru 1-30-73.” App. in No. 74-75, p. 11. Citing § 6851, the Acting Director declared respondent’s taxable period for the first 30 days of 1973 “immediately terminated” and her income tax for that period “immediately due and payable.” Ibid. He further informed respondent that a tax in the amount of $52,680.25 for the period “will be immediately assessed” and that “[d]emand for immediate payment of the full amount of this tax is hereby made.” Ibid. A return for the terminated period, pursuant to § 443 (a) (3) of the Code, 26 U. S. C. § 443 *168(a)(3), was requested but not filed. The formal assessment was made on February 1. As was the case with Mr. Laing, Mrs. Hall received no deficiency notice under § 6861 (b) and no specific information about how the amount of the tax had been determined.

Respondent was unable to pay the tax so assessed. Therefore, the IRS, acting pursuant to § 6331, levied upon and seized respondent’s 1970 Volkswagen and offered it for sale.10

Respondent Hall instituted suit on February 13 in the United States District Court for the Western District of Kentucky, seeking injunctive relief and compensatory and punitive damages. The court issued an order temporarily restraining the IRS from selling the automobile and from seizing any more of respondent’s property. Thereafter, relying upon Schreck v. United States, 301 F. Supp. 1265 (Md. 1969), the court held that the Federal Anti-Injunction Act, § 7421 (a), was inapplicable because of the IRS’s failure to follow the procedures of § 6861 et seq. The court ordered the return of respondent’s automobile upon her posting a bond in the amount of its fair market value.11 It issued a preliminary injunction restraining the defendants (the United States, the Acting District Director, the Group Supervisor of Internal Revenue, and a lieutenant of the Kentucky State Police) “from harassing or intimidating [respondent] in any manner including but not limited to trespassing on, seizing or levying upon any of her property of whatever nature, be it rental property or not.” Pet. for Cert. in No. 74-75, p. 5a.

*169On appeal, the United States Court of Appeals for the Sixth Circuit affirmed per curiam, 493 F. 2d 1211 (1974), relying upon its opinion and decision in Rambo v. United States, supra, decided one month earlier. In Rambo the court had held that the failure of the IRS to issue a deficiency notice for a terminated taxable period, and the consequent unavailability of a remedy in the United States Tax Court, entitled the taxpayer to injunctive relief. Because of the conflict, indicated above, we also granted certiorari in Mrs. Hall’s case. 419 U. S. 824 (1974).

II

In these cases, the taxpayers seek the protection of certain procedural safeguards that the Government claims were not intended to apply to jeopardy terminations. Specifically, the taxpayers argue that the procedures mandated by § 6861 et seq. for assessing and collecting deficiencies whose collection is in jeopardy also govern assessments of taxes owing, but not reported, after the termination of a taxpayer’s taxable period under § 6851. Resolution of this claim requires analysis of the interplay between these two basic jeopardy provisions — § 6851, the jeopardy-termination provision, and § 6861, the jeopardy-assessment provision.

The initial workings of the jeopardy-termination provision, which essentially permits the shortening of a taxable year, are not in dispute. When the District Director determines that the conditions of § 6851 (a) are met — generally, that the taxpayer is preparing to do something that will endanger the collection of his taxes12 — the District Director may declare the taxpayer’s *170current tax year terminated. The tax for the shortened period and any unpaid tax for the preceding year become due and payable immediately, § 6851 (a), and the taxpayer must file a return for the shortened year. § 443 (a)(3).

The disagreement between the taxpayers and the Government focuses on the applicability of the jeopardy-assessment procedures of § 6861 et seq. to the assessment13 and collection of taxes that become due upon a § 6851 termination. Section 6861 (a) provides for the immediate assessment of a deficiency, as defined in § 6211 (a), whenever the assessment or collection of the deficiency would be “jeopardized by delay.” By allowing an immediate assessment, § 6861 (a) provides an exception to the general rule barring an assessment until the taxpayer has been sent a notice of deficiency and has been afforded an opportunity to seek resolution of his tax liability in the Tax Court.14 Certain procedural safeguards are provided, however, to the taxpayer whose deficiency is as*171sessed immediately under § 6861 (a). Within 60 days after the jeopardy assessment, the District Director must send the taxpayer a notice of deficiency, § 6861 (b), which enables the taxpayer to file a petition with the Tax Court for a redetermination of the deficiency, 26 U. S. C. § 6213 (a) (1970 ed., Supp. IV). The taxpayer can stay the collection of the amount assessed by posting an equivalent bond, § 6863 (a). Any property seized for the collection of the tax cannot be sold until a notice of deficiency is issued and the taxpayer is afforded an opportunity to file a petition in the Tax Court. If the taxpayer does seek a redetermination of the deficiency in the Tax Court, the prohibition against sale extends until the Tax Court decision becomes final. § 6863 (b) (3) (A).15

The taxpayers view the provisions of § 6861 et seg. as complementary to those of § 6851. They contend that to the extent the tax owing upon a jeopardy termination has not been reported, it is a “deficiency” as that term is defined in § 6211 (a) and used in § 6861 (a), and that the deficiency, being of necessity one whose assessment or collection is in jeopardy,16 must be assessed and collected in accordance with the procedures of § 6861 et seg.

Under the Government’s view, on the other hand, §§ 6851 and 6861 are aimed at distinct problems and have no bearing on each other. “Section 6851,” according to the Government, “advances the date when *172taxes are due and payable, while Section 6861 advances the time for collection of taxes which are already overdue [i e., already owing for a prior, normally expiring taxable year].” Brief for United States 10. The validity of this distinction rests on the Government’s claim that a deficiency can arise only with respect to a nonterminated taxable year, so that no deficiency can be created by a § 6851 termination. If there is no deficiency to assess, of course, the provisions of § 6861 et seq. cannot apply.

Thus, under the Government’s reading of the Code, the procedures for assessment and collection of a tax owing, but not reported, after the termination of a taxable period are not governed by § 6861 et seq.17 The Government argues that, with the single exception of the bond provision of § 6851 (e), the taxpayer’s only remedy upon a jeopardy termination is to pay the tax, file for a refund, and, if the refund is refused, bring suit in the district *173court or the Court of Claims. See 28 U. S. C. § 1346 (a) (1). Since the IRS has up to six months to act on a request for a refund, the taxpayer, under the Government's theory, may have to wait up to half a year before gaining access to any judicial forum. See 26 U. S. C. §§ 6532 (a), 7422 (a) (1970 ed. and Supp. IV).

The Government does not seriously challenge the taxpayers’ conclusion that if the termination of their taxable periods created a deficiency whose assessment or collection was in jeopardy, the assessments and collections in these cases should have been pursuant to the procedures of § 6861 et seq. The question, then, is whether the tax owing, but not reported, upon a jeopardy termination is a deficiency within the meaning of § 6211 (a).

Ill

In essence, a deficiency as defined in the Code is the amount of tax imposed less any amount that may have been reported by the taxpayer on his return.18 § 6211 *174(a). Where there has been no tax return filed, the deficiency is the amount of tax due. Treas. Reg. § 301.6211-1 (a), 26 CFR § 301.6211-1 (a) (1975). As we have seen, upon terminating a taxpayer’s taxable year under § 6851, the District Director makes a demand for the payment of the unpaid tax for the terminated period and for the preceding taxable year. The taxpayer is then required to file a return for the truncated taxable year. § 443 (a)(3). The amount due, of course, must be determined according to ordinary tax principles, as applied to the abbreviated reporting period. The amount properly assessed upon a § 6851 termination is thus the amount of tax imposed under the Code for the preceding year and the terminated short year, less any amount that may already have been paid. To the extent this sum has not been reported by the taxpayer on a return, it fits precisely the statutory definition of a deficiency.19

The Government resists this conclusion by reading the definition of “deficiency” restrictively to include only those taxes due at the end of a full taxable year when a return has been or should have been made. It argues that a “deficiency” cannot be determined before the close of a taxable year. Of course, we agree with the Govem*175ment that a deficiency does not arise until the tax is actually due and the taxable year is complete. The fact is, however, that under § 6851 the tax is due immediately upon termination. Moreover, upon a § 6851 termination, the taxpayer’s taxable year has come to a close. See Sanzogno v. Commissioner, 60 T. C. 321, 325 (1973).20 Section 441 (b) (3) defines as a “taxable year” the terminated taxable period on which a return is due under § 443 (a)(3). See also § 7701 (a) (23). Under the statutory definition of § 6211 (a), the tax owing and unreported after a jeopardy termination, which in these cases and in most § 6851 terminations is the full tax due, is clearly a deficiency. We see nothing in the definition to suggest that a deficiency can arise only at the conclusion of a 12-month taxable year; it is sufficient that the taxable period in question has come to an end and the tax in question is due and unreported.21

*176Besides conflicting with the plain language of the Code provisions directly before us, the Government’s position in these cases would, for no discernible purpose, isolate the taxpayer subjected to a jeopardy termination from most other income-tax payers. If the unreported tax due after a jeopardy termination is not a deficiency, the IRS need not issue the taxpayer a deficiency notice and accord him access to the Tax Court for a redetermination of his tax. Denial of an opportunity to litigate in the Tax Court is out of keeping with the thrust of the Code, which generally allows income-tax payers access to that court. Where exceptions are intended, the Code is explicit on the matter. See, e. g., § 6871 (b). Denying a Tax Court forum to a particular class of taxpayers is sufficiently anomalous that an intention to do so should not be imputed to Congress when the statute does not expressly so provide. This is particularly so in view of the Government’s concession that the jeopardy-assessment procedures of § 6861 et seq. are sufficient to protect its interests, and that providing taxpayers with the *177limited protections of those procedures would not impair the collection of the revenues.22

IV

While the plain language of the provisions at issue here and their place in the legislative scheme suggest that the unreported tax due upon a § 6851 termination is a deficiency and that the deficiency, its collection being in jeopardy, must be assessed and collected according to the procedures of § 6861 et seq., the Government attempts to undercut this conclusion by pointing to the legislative history of the several provisions at issue in this case. We are unpersuaded. The jeopardy-assessment and jeopardy-termination provisions have long been treated in a closely parallel fashion, and nothing that the Government points to in the early codifications suggests the contrary.

As the Government points out, the Revenue Act of 1918 (1918 Act) contained a termination provision, § 250 (g), 40 Stat. 1084, that was very similar to the present § 6851. Under the 1918 statute all assessments were made under the authority of Rev. Stat. § 3182,23 and the taxpayer could attack an assessment only by paying the amount claimed and bringing suit for a refund in district court. Since there was no way for the taxpayer to contest assessments prior to payment, the Government had no need for any expedited jeopardy-assessment procedure *178such as is now authorized in § 6861.24 When a termination was made under § 250 (g), the tax assessment and collection thus proceeded exactly as in any other case— the taxpayer had to pay first and litigate later.

In the Revenue Act of 1921 (1921 Act), 42 Stat. 227, Congress added both a special procedure for prepayment challenges to assessments and an exception to that procedure. The special procedure made available, under certain circumstances, a limited administrative remedy within the Bureau of Internal Revenue (predecessor to the IRS) by which taxpayers could question assessments before paying the taxes assessed. § 250 (d) of the 1921 Act, 42 Stat. 266. The Commissioner could, however, *179pretermit that procedure if he believed that collection of the revenues might be jeopardized by-delay. This exception, contained in a proviso to § 250 (d), was the precursor of § 6861. Since the proviso limited the availability of the administrative remedy to cases where collection of the taxes due would not be “jeopardized by such delay,” the remedy was necessarily inapplicable to cases in which a § 250 (g) termination was made. As of 1921, then, the nascent prepayment remedy was available to ordinary taxpayers but not to taxpayers in either jeopardy situation — where the tax year had been terminated pursuant to § 250 (g), or where the full tax year had run and the Commissioner had determined that the collection of the tax would be jeopardized under the proviso to § 250 (d).

The Government, however, relies heavily on the 1921 Act, claiming that £<[t]he key to an understanding of the term 'deficiency' lies” therein. Brief for United States 42. It relies on a reference to the term “deficiency” in § 250 (b), which set out the procedure for handling underpayments after returns had been filed:

“If the amount already paid is less than that which should have been paid, the difference, to the extent not covered by any credits due to the taxpayer under section 252 (hereinafter called 'deficiency') . . . shall be paid upon notice and demand by the collector.” 40 Stat. 265.

This “hereinafter” reference was permanently eliminated when the Act was revised in the Revenue Act of 1924 (1924 Act) and the word “deficiency” precisely defined — in much the same way as it is today. Nonetheless, the Government persists in viewing the reference in the 1921 Act as an authoritative definition of “deficiency.” Since the reference related only to money owed after a return had been filed and examined, the Govern*180ment argues that Congress in 1921 did not consider the amount assessed pursuant to a jeopardy termination— which often must be assessed before a return is filed — to be a “deficiency.” This supposed limitation in the 1921 Act continues, in the Government's view, to this day. We disagree with the Government’s analysis.

To understand the use of the word “deficiency” in the 1921 Act, it is necessary to begin with the 1918 Act, where the term first appeared. In the 1918 statute the term was not formally defined but appeared in various provisions dealing with underpayments and overpayments of tax, referring to the difference between the amount due and the amount already paid. “Deficiency” was used synonymously with the word “understatement,” and it is clear from the context that neither word was being used as a term of art. In the 1921 Act, the 1918 language was left largely unchanged, except that after the reference to the difference between the amount paid and the amount due, Congress added the parenthetical expression “(hereinafter called ‘deficiency’),” and from that point on replaced all references to “understatement” with the word “deficiency.” From the context, it is evident that the “hereinafter” parenthetical term was not intended as a restrictive definition of deficiency, but merely as an indication that throughout the subsection the word would be used as shorthand for the difference between the amount paid and the amount that should have been paid.25 We thus find nothing in the informal use of the term “deficiency” in the 1921 Act to limit our construc*181tion of the precise definition in § 6211 (a) of the present Code.

In 1924 Congress made a number of important changes in the jeopardy-assessment scheme. The termination section, § 282, 43 Stat. 302, remained basically the same as it had been in § 250 (g) of the 1921 Act, but taxpayers’ prepayment remedies in the jeopardy-assessment provision were substantially altered. Section 274 (a) of the 1924 Act, 43 Stat. 297, provided that if, “in the case of any taxpayer, the Commissioner determine [d] that there is a deficiency” in the tax imposed by the Act, the Commissioner was required to mail a notice of deficiency to the taxpayer. Within 60 days of mailing of the notice, and prior to payment of the deficiency, the taxpayer was entitled to file an appeal with the Board of Tax Appeals, an agency independent of the Bureau of Internal Revenue. The only exception to this statutory provision permitting general access to the Board of Tax Appeals was that for a jeopardy assessment. The jeopardy-assessment provision, § 274 (d), permitted the Commissioner to assess and collect a deficiency immediately, bypassing various procedures set out in § 274 (a) for the ordinary assessment and collection of deficiencies. Even in the jeopardy-assessment situation, however, the taxpayer could gain access to the Board of Tax Appeals by posting a bond. § 279 (a).

Section 273 of the 1924 Act defined “deficiency,” much as it is now defined, as the amount by which the tax due exceeds the tax shown on the taxpayer’s return, or, “if no return is made by the taxpayer, then the amount by which the tax exceeds the amounts previously assessed (or collected without assessment) as a deficiency.” § 273 (2). In cases in which no return was filed and no amount had previously been assessed or collected, § 273 (2) in effect defined a “deficiency” simply as the amount *182of tax due. Since § 282 — the termination provision— provided that at the time of termination the Commissioner would demand “immediate payment of the tax for the taxable period so declared terminated and of the tax for the preceding taxable year or so much of such tax as is unpaid . . . and that the tax demanded would become “immediately due and payable,” the tax “due and payable” at the time of the termination notice, to the extent unreported, would appear to fit the definition of “deficiency” in § 273 (2). This being so, the Government’s assertion that under the 1924 Act, § 282 terminations were not subject to the procedures of § 274 (d) is incorrect, and much of the force of its argument from the history of the statute is lost.

With the amendments made by the Revenue Act of 1926, c. 27, 44 Stat. 9, the statutory provisions relevant to these cases took essentially their present form. The jurisdiction of the Board of Tax Appeals (subsequently renamed the Tax Court) was broadened, in part by granting taxpayers subjected to jeopardy assessments a means of having their assessment redetermined by the Board without having to post bond as had previously been required. Under the new jeopardy-assessment procedures, the Commissioner could immediately assess the deficiency, but in addition to a demand for payment, he was required to send a notice of deficiency, § 279 (b), which allowed the jeopardy taxpayer immediate access to the Board of Tax Appeals. § 274 (a). As in the 1924 Act, there was no indication that taxpayers subjected to a jeopardy termination would not then be assessed under the jeopardy-assessment procedures to the extent a deficiency was owing, and thereby allowed to follow the same route to the Board of Tax Appeals that was available to other jeopardy taxpayers.

*183In sum, to the extent that it sheds any light on the question at all, the legislative history seems to help the taxpayers rather than the Government. In the course of the development of a prepayment remedy and a jeopardy exception to that remedy between 1918 and 1926, taxpayers subjected to jeopardy terminations and those subjected to jeopardy assessments for nontermi-nated taxable years were consistently treated alike. In 1921, when the administrative remedy was first created, neither those subjected to a jeopardy assessment for a nonterminated year nor those subjected to a termination could avail themselves of that remedy. In 1924, those terminated and those subjected to jeopardy assessments for nonterminated years were similarly denied access to the Board of Tax Appeals, unless they filed a bond in the amount of the claim. And in 1926, when the scheme assumed its current form, there was no indication that Congress intended for the first time to treat the two groups separately by granting direct access to the Board of Tax Appeals to those subjected to a jeopardy assessment for a nonterminated year, but denying it to those subjected to an assessment following a jeopardy termination.

V

Based on the plain language of the statutory provisions, their place in the legislative scheme, and the legislative history, we agree with the taxpayers’ reading of the pertinent sections of the Code.26 Under that reading, the *184tax owing, but not reported, at the time of a § 6851 termination is a deficiency whose assessment and collection are subject to the procedures of § 6861 et seq. Section 6861 (b) requires a notice of deficiency to be mailed to a taxpayer within 60 days after the jeopardy assessment. Section 6863 bars the offering for sale of property seized until the taxpayer has had an opportunity to litigate in the Tax Court. Because the District Director failed to comply with these requirements in these cases, the taxpayers’ suits were not barred by the Anti-Injunction Act,27 § 7421 (a) of the Code. The judgment of the *185United States Court of Appeals for the Sixth Circuit in No. 74 — 75 is affirmed. The judgment of the United States Court of Appeals for the Second Circuit in No. 73-1808 is reversed, and the case is remanded to that court for further proceedings consistent with this opinion.

It is so ordered.

Mr. Justice Stevens took no part in the consideration or decision of these cases.

Section 6851 (a)(1) provides:

“If the Secretary or his delegate finds that a taxpayer designs quickly to depart from the United States or to remove his property therefrom, or to conceal himself or his property therein, or to do any other act tending to prejudice or to render wholly or partly ineffectual proceedings to collect the income tax for the current or the preceding taxable year unless such proceedings be brought without delay, the Secretary or his delegate shall declare the taxable period for such taxpayer immediately terminated, and shall cause notice of such finding and declaration to be given the taxpayer, together with a demand for immediate payment of the tax for the taxable period so declared terminated and of the tax for the preceding taxable year or so much of such tax as is unpaid, whether or not the time otherwise allowed by law for filing return and paying the tax has expired; and such taxes shall thereupon become immediately due and payable. In any proceeding in court brought to enforce payment of taxes made due and payable by virtue of the provisions of this section, the finding of the Secretary or his delegate, made as herein provided, whether made after notice to the taxpayer or not, shall be for all purposes presumptive evidence of jeopardy.”

Section 6861 (a) provides for the immediate assessment of deficiencies whose assessment or collection would otherwise be in jeopardy:

“If the Secretary or his delegate believes that the assessment or collection of a deficiency, as defined in section 6211, will be jeopardized by delay, he shall, notwithstanding the provisions of section 6213 (a), immediately assess such deficiency (together with all interest, additional amounts, and additions to the tax provided for by law), and notice and demand shall be made by the Secretary or his delegate for the payment thereof.”

The Code provides that a § 6851 termination will be ordered by “the Secretary or his delegate,” § 6851 (a). The Regulations provide that the District Director is in all cases authorized to mahe the required findings and order the termination. Treas. Reg. § 1.6851-1 (a) (1), 26 CFR § 1.6851-1 (a) (1) (1975).

A deficiency notice is of import primarily because it is a jurisdictional prerequisite to a taxpayer’s suit in the Tax Court for re-determination of his tax liability. See infra, at 171.

Petitioner Laing has not denied ownership of the currency. Tr. of Oral Arg. 64; Tr. of Oral Rearg. 48.

Petitioner Laing also has filed suit for refund in the United States District Court for the District of Vermont. Trial is being delayed, pursuant to stipulation of the parties, pending our decision in the present case.

Rambo is before us as No. 73-2005, cert, pending.

Cert. pending svb nom. United States v. Clark, No. 74-722.

The developing conflict among the federal courts was recognized in Willits v. Richardson, 497 F. 2d 240, 246 n. 4 (CA5 1974), and Jones v. Commissioner, 62 T. C. 1, 2-3 (1974).

Counsel for respondent Hall asserted that the IRS also “seized $57 from her bank account,” and that it would, or did, seize her paycheck. Tr. of Oral Arg. 46. Counsel also stated that $77 was later refunded to Mrs. Hall. Id., at 57. We are not advised how the latter amount was computed.

A corporate surety bond in the amount of $1,650 was duly filed.

The precise findings required are: (1) that the taxpayer designs quickly to depart from the United States or to remove his property therefrom; or (2) that he intends to conceal himself or his property therein; or (3) that he is about to do any other act tending to *170prejudice or render wholly or partly ineffectual proceedings to collect income tax for the current or preceding year. § 6851 (a). See n. 1, supra.

The “assessment,” essentially a bookkeeping notation, is made when the Secretary or his delegate establishes an account against the taxpayer on the tax rolls. 26 U. S. C. § 6203. In both of the cases at bar, the assessments were made immediately upon termination of the taxpayers’ taxable years.

In the past, the Government has argued that § 6851 contained its own assessment authority, see Schreck v. United States, 301 F. Supp. 1265 (Md. 1969), but it has since abandoned that position, see Lisner v. McCanless, 356 F. Supp. 398, 401 (Ariz. 1973), and it does not press the point here. Cf. n. 17, infra.

A tax deficiency whose collection is not in jeopardy is collected according to the procedures of §§ 6211-6216 of the Code, 26 U. S. C. §§ 6211-6216 (1970 ed. and Supp. IV). Under § 6213 (a), the taxpayer ordinarily has 90 days after mailing of his deficiency notice in which to file his claim with the Tax Court.

The rule against sale of the taxpayer’s property has three limited exceptions: the property can be sold (1) if the taxpayer consents to the sale; (2) if the expenses of maintenance of the property will greatly reduce the net proceeds of its sale; or (3) if the property is perishable. §§ 6863 (b) (3) (B), 6336.

This follows because the findings necessary to terminate a taxable year under § 6851 will always justify a finding that the assessment of the taxes owed will be “jeopardized by delay.” See nn. 1 and 2, supra.

Since it does not view the termination as creating a deficiency, the Government would apply neither the ordinary nor the jeopardy deficiency assessment procedures. Under the Government’s approach, the taxes due upon a jeopardy termination are simply assessed under the general assessment section of the Code, § 6201, 26 U. S. C. § 6201 (1970 ed. and Supp. IY).

The Government further argues that the power to assess jeopardy terminations is derived solely from the general assessment section. While the taxpayers argue that the power to assess jeopardy terminations comes from the jeopardy-assessment provision, § 6861, rather than the general assessment provision, § 6201, we need not resolve that question here. Even if the Government is correct that the assessment power comes from § 6201, the procedural rules of § 6861 et seq. govern, on their face, when the assessment is of a deficiency whose collection is in jeopardy. See n. 2, supra. Likewise, the procedural rules of §§ 6211-6216 govern assessments empowered by § 6201 when the assessment is of a deficiency whose collection is not in jeopardy. See n. 14, supra, and accompanying text. Cf. n. 13, supra.

A deficiency is defined as follows:

“(a) In general.

“For purposes of this title in the ease of income, estate and gift taxes and excise taxes, imposed by subtitles A and B, chapters 42 and 43, the term ‘deficiency’ means the amount by which the tax imposed by subtitle A or B or chapter 42 or 43, exceeds the excess of—

“(1) the sum of

“(A) the amount shown as the tax by the taxpayer upon his return, if a return was made by the taxpayer and an amount was shown as the tax by the taxpayer thereon, plus

“(B) the amounts previously assessed (or collected without assessment) as a deficiency, over—

“(2) the amount of rebates, as defined in subsection (b)(2), made.” 26 U. S. G. §6211 (a) (1970 ed. and Supp. IY).

See also Treas. Reg. § 301.6211-1 (a), 26 CFR § 301.6211-1 (a) (1975). Thus a deficiency does not include all taxes owed by a *174taxpayer, but only those that are both owed and not reported. Cf. n. 19, infra.

To the extent the tax owing upon a jeopardy termination has been reported by the taxpayer — either because it was reported for the preceding year, or because the taxpayer immediately filed a § 443 return — no deficiency is created, even if the taxes reported have not 3ret been paid. See n. 18, supra. Of course, the procedures for assessing deficiencies whose collection is in jeopardy, § 6861 et seq., would not apply to such monies. The taxpayer has conceded owing the taxes he has reported, and those taxes, if unpaid, may be directly obtained by levy without according any prepayment access to the Tax Court. The levy provision, § 6331, contains provisions for the expedited collection of taxes owing in jeopardy situations.

The broad dictum to the contrary in the Board of Tax Appeals’ 1938 opinion in Ludwig Littauer & Co. v. Commissioner, 37 B. T. A. 840, 842, upon which the Government in part relies, was apparently rejected by the Tax Court in the Sanzogno opinion. The majority recognized in Sanzogno that “[i]t is possible that our holding is in some conflict with the rationale of our opinion in Ludwig Littauer & Co.,” 60 T. C., at 325 n. 2, and Judge Simpson wrote separately to suggest that the earlier precedent should have been given its formal burial then and there. In a subsequent § 6851 case, Jones v. Commissioner, 62 T. C. 1 (1974), the Tax Court avoided the broad rationale of Littauer and instead held simply that a termination letter was not a deficiency notice and that without a deficiency notice a taxpayer cannot litigate his claim in the Tax Court.

See 9 J. Mertens, Law of Federal Income Taxation § 49.130 (J. Malone rev. 1971); Odell, Assessments: What are they — Ordinary? Immediate? Jeopardy?, 2 N. Y. U. 31st Inst, on Fed. Tax. 1495, 1520, 1522 (1973).

The Government argues that a deficiency cannot be created by a jeopardy termination because a notice of deficiency for a terminated year would make no sense. This is so, it is argued, because *176the year is not really over and may be reopened pursuant to § 6851 (b). Brief for United States 24r-25. The Government ignores the effect of a § 6851 termination: for the taxpayer the “taxable year” is complete and taxes are immediately owing for that short year. §§441 (b)(3), 443 (a)(3), 6851. The deficiency for that period can easily be computed under § 6211 and notice of that deficiency issued. If the short year is thereafter reopened and again terminated, a new notice of deficiency can, and under our view of § 6861 et seq. must, be issued. §6861 (b).

The Government’s argument, Brief for United States 25-26, that Tax Court jurisdiction in the case of a terminated year that is subject to reopening is inappropriate must likewise fail. We see no reason why the Tax Court, applying normal tax principles, should be less capable of determining the tax owing for the short year than the district court or Court of Claims, which, under the Government’s theory, would make that determination. See also § 6861 (c).

The Government repeatedly conceded at oral argument that adoption of the taxpayers’ theory would result in no significant injury to the Government other than the loss of some of the cases now pending in the lower courts. -Tr. of Oral Arg. 9-10, 18, 21, 23, 24, 28, 30. This concession completely rebuts the dissent’s claim that our decision today deprives the IRS “of a device it obviously needs in combatting questionable tax practices . . . Post, at 189.

That statute was almost identical to § 6201 of the present Code.

The jeopardy-assessment procedure, as is indicated, supra, at 170, is an exception to the normal deficiency-assessment mechanism, which allows a taxpayer the prepayment remedy of withholding the taxes claimed by the Government until after a final judicial determination of liability. Of course, under the 1918 Act a taxpayer who sought to place in jeopardy collection of his taxes could be forestalled under the jeopardy-termination provision of §250 (g), which enabled the IRS to declare immediately owing the tax for the present or previous taxable year. That the jeopardy-assessment procedures, bom of necessity to reconcile the prepayment remedy with the occasional need for expedited collections of taxes, did not exist to govern assessments after jeopardy terminations under the 1918 Act does not mean, of course, that the procedures, once formulated, were not intended to cover assessments of deficiencies created by jeopardy terminations as well as all other jeopardy assessments.

The Government suggests that the power to assess jeopardy terminations cannot derive from the jeopardy-assessment section because the jeopardy-termination provision existed in the 1918 Act before -any provision was made for jeopardy assessments. Brief for United States 40-42. Since in our view the source of the power to assess jeopardy terminations is irrelevant in determining whéther the procedures for jeopardy assessments apply to assessments after jeopardy terminations, see n. 17, supra, this argument is of no consequence.

Examination of the entire text of § 250, including the termination provision, § 250 (g), strongly suggests that in the 1921 Act the word “deficiency” was used in its colloquial sense to mean the amount of tax remaining unpaid at the time the tax was due, and that no significance was attached to whether a return had been filed at that time.

As a final reason for adopting their construction of the Code, the taxpayers argue that the Government’s reading would violate the Due Process Clause of the Fifth Amendment. The basis for this claim is that under the assessment procedures of § 6861 et seq. the taxpayer is guaranteed access to the Tax Court within 60 days, while under the procedures suggested by the Government the taxpayer in a termination case could be denied access to a judicial forum for -up to six months. See supra, at 173. Cf. Phillips v. *184Commissioner, 283 U. S. 589 (1931). Moreover, the taxpayers argue, under the procedures of § 6861 et seq. the property seized may not be sold until after a final determination by the Tax Court, § 6863, while under the Government’s theory the property seized in a jeopardy termination may be immediately subject to sale. Because we agree with the taxpayers’ construction of the Code, we need not decide whether the procedures available under the Government’s theory would, in fact, violate the Constitution.

The taxpayers do not question here, and we do not consider whether, even if the jeopardy-assessment procedures of § 6861 et seq. are followed, due process demands that the taxpayer in a jeopardy-assessment situation be afforded a prompt post-assessment hearing at which the Government must make some preliminary showing in support of the assessment. See North Georgia Finishing, Inc. v. Di-Chem, Inc., 419 U. S. 601, 607 (1975); Mitchell v. W. T. Grant Co., 416 U. S. 600, 610-611 (1974); Fuentes v. Shevin, 407 U. S. 67, 72 (1972).

The Anti-Injunction Act generally bars suits to enjoin the assessment or collection of taxes. But § 7421 (a) is subject to several exceptions, one pertinent here: it does not forbid suits to enjoin the assessment of a deficiency, or a levy or proceeding in court for its collection, if the taxpayer has not been mailed a notice of deficiency and afforded an opportunity to secure a final Tax Court determination. § 6213 (a). On the other hand, this exception to the Anti-Injunction Act does not apply to jeopardy assessments made “as . . . provided in” § 6861. Thus jeopardy assessments ordinarily may not be enjoined. When, however, the IRS fails to follow the procedures of *185§ 6861 et seq., as in these eases, it is not assessing “as . . . provided in” § 6861, and the § 6861 exception to § 6213 (a) is inapplicable. In such cases, § 6213 (a) ’s exception to the Anti-Injunction Act becomes operative, and a suit to enjoin the collection of the jeopardy-deficiency may be brought.

In No. 73-1808, petitioner Laing brought suit approximately three weeks after the jeopardy termination and assessment. Since the IRS has up to 60 days after a jeopardy assessment to mail the notice of deficiency, § 6861 (b), no action had yet been taken that was not in conformity with the jeopardy-assessment procedures, and the suit could properly have been dismissed at that time as barred by the Anti-Injunction Act. When 60 days passed without the mailing of a notice of deficiency, however, petitioner amended his complaint to include this violation of the procedures of § 6861. App. in No. 73-1808, p. 19. At that time the IRS was violating the required procedures, the Anti-Injunction Act bar was no longer applicable, and the District Court had jurisdiction to determine petitioner’s claim. Accordingly, its dismissal of Laing’s action was improper.

Respondent Hall in No. 74^-75 likewise brought suit before the 60-day grace period had expired (although the 60-day period subsequently lapsed without the issuance of the required notice of deficiency). Mrs. Hall alleged, however, that the IRS was offering her automobile for sale before issuing her a notice of deficiency and *186affording her the opportunity to litigate in the Tax Court, an action that violated § 6863. Since the offering for sale was not in conformity with the jeopardy-assessment procedures of § 6861 et seq., the Anti-Injunction Act bar was inapplicable, and the levy and subsequent sale could properly be enjoined under § 6213 (a).