[ll Pillsi 230C 2 2014 (th order to p] matter. A and capiita of Perju 'y 11 shurq Winthrop Shaw Pittman LLP Street, NW Washington, DC 20037-1122 tel 202.663.8000 fax 202.663 jeffery 014 vered evenue Service tricia L. Thomas Law Specialist empt Organizations chnical Group 1 stitution Avenue NW m, DC 20224-0002 . Thomas: is letter and its attachments (together, this ?Second Supple it the ?lings Crossroads Grassroots Policy Strategies ?Revised Protest?) and (ii) May 7, 2014 (the ?First-Supple resent previously unavailable information that bears upon a ll of the information presented in the two referenced docun lized terms, is incorporated herein by reference. While GI Statement is necessary due to the nature and content of thi 1 GPS pr: or .8007 Jeffery L. Yablon tel 202.663 .8441 yablon@pillsburylaw.com mental Submission?) made on February 28, nental Submission?)1 in iproper resolution of this tents, including the de?ned '8 does not believe a Penalty 3 Second Supplemental iously designated the First Supplemental Submission as the ?Supplemental Submission.? ylaw.com This documen twas obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) Internal June 20, 2 Page 2 Submission President I. In evenue Service 014 of GPS. ei-nal Service Memorandum of October 8, 2010 Y?r 0 House of Conservati included Nonpro? attached he The Service Investiga organizat Service 11 iS 1 reto as Exhibit B. BI sonnel agreed with understanding of the applicable June 16, 2016, the Committee on Oversight and Governme epresentatives released a Staff Report titled How Politics 1 ve Tax-Exempt Applicants for their Political Beliefs (the Political Speech? (the ?Internal Memorandum?). The relev Internal Memorandum summarizes an October 8, 2010, sonnel and attorneys from both the Department of Justice 1 ion. These individuals discussed ?recent attention to the pol .ons? and the laws governing such activity. The Internal Me attached as Exhibit A is a Penalty of Perjury Statement signed by Steven Law, nt Reform of the US. .66! the IRS to Target Leport?). The Report Figure 8 an ?Intemal IRS Memorandum on Justice Department Meeting about ant excerpt of the Report is eeting between key md the Federal Bureau of itical activity of exempt morandum reveals that key law in two crucial regards. First, the Internal Memorandum records Ms. Kindell?s concern about the continued viability 4 Supreme 2004-6, litigated.? facts and Section studied thi? Court?s decisions in WRTL and Citizens United. ?She point 5 rcumstances test an impermissible burden on free speech. 3 issue, evidently including Ms. Kindell, agree. Moreover, ryaw.com i This docume 319 the facts and circumstances test of Rev. Rul. 2004-6 and rich Was drafted in light of the electioneering communicati< GPS has previously explained why these Supreme Court The Service?s Standards Are Unconstitutional, at pages 52 .ev. Rul. 2007-41 after the ad to Revenue Ruling )n rules before they were ecisions have made the See Revised Protest, 2-58. Those who have Ms. Kindell?s statement was obtained and uploaded by the Center for Responsive Politics (OpenSecretS-Org) Internal June 20, 2 Page 3 about the provides Election N1 af th in pL Se unconstiti rampant ?advocac Mr. Lerni of the or Jenue Service 14 e1 0 origins of Rev. Rul. 2004-6 is troubling because of 2 U.S.C. ollowing with respect to electioneering communications ,ameaign Act: )thing in this subsection may be construed to establish, modi Feet the de?nition of political activities or electioneering acti a de?nition of participating in, intervening in, or in?uencing ?pence a political campaign on behalf of or in opposition to blic of?ce) for purposes of the Internal Revenue Code of 19 cond, the facts and circumstances test of Rev. Rul. 2004-6 a itionally vague. The Internal Memorandum shows Ms. Lem 3" LC ?lobbying, political intervention,? and ?express advoca 3r admits that ?men of common intelligence? could not unde reover, Ms. Lerner stated that a case like this, the de? 1ization?s expenditures and explain why it is not political.? statement 2007-41 1 activities prepared a compla own organ is true because the facts and circumstances test of Rev. Rul 'e t( to repeat the process upon audit. But as a complaint, this sta nt by the Director of Exempt Organizations about a rule cre -zation. To be sure, reviewing each action and expenditure ry aw.com 434(f)(7), which as de?ned in the Federal fy, or otherwise vities (including or attempting to any candidate for 86. nd Rev. Rul. 2007-41 is er?s awareness that there is nfusion with respect to the law. By observing that the terms ?political committee,? icy? are not clear to juries, rstand and apply the law. arise will go through each As an observation, this 2004-6 and Rev. Rul. quires every Code section 501(c)(4) organization that engages in any political both monitor and characterize each of its expenditures during operations and be tement is odd because it is ated and enforced by her is onerous, tedious, and This document was obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) Intemal F. June 20, 2. Page 4 time-cons process tl II. venue Service 14 uming and likely to produce a multitude of disagreements 0 rat was created by the Service itself and the Service alone. 2 Street Decision On Service?s of tax-ex: 2014), C. This Service 3 process. complexity 111-9. Code sec by the Se May 27, 2014, the United States District Court for the Dist motion to dismiss a suit by Street, Inc, a non-pro?t corpc an Street, Inc. v. Koskinen, No. 12-cv-0401, a copy of which is ase shows that GPS will have a right to pursue its First Arne it This case also shows that the courts will not allow the somet onclusion ne Revised Protest demonstrates that GPS quali?es as a tax- tion 501(c)(4). The First Supplemental Submission demonsi rvice to produce the Proposed Adverse Letter is, at best, tain question' its legal 1 Amendmei ble. This Second Supplemental Submission demonstrates tosition cannot be defended and that GPS will be able to sue it claims in federal court. 2 The iron proble these rul by Rev. Rul. 2004-6 and Rev. Rul. 2007-41 while sitting a few of the situation should not be overlooked: Ms. Lerner was complainin 3, Ms. Kindell. ryIaw.com ver minutia. But it is the riot of Columbia denied the ration seeking recognition status under Code section 501(c)(3). See Memorandum Opinion (D.D.C. May 27, attached hereto as Exhibit ndment claims against the )uld GPS not receive approval through the Service?s internal administrative review imes foreboding of the tax laws to deter them from vindicating constitutional rights. exempt organization under rates that the process used ted and highly oth that the Service knows seed on its First about the burdens of and feet away from the author of This documen was obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) Internal 1 June 20, Page 5 the issua favorabl This docume {avenue Service 2014 11 in the interests of all concerned to avoid the years of litigation that will surely follow ace of an adverse determination letter. The Service should imlinediately issue a determination letter to GPS. spectfully submitted this 20th day of June, 2014. l? L. ablon Pillsbury Winthrop aw Pittman LLP 2300 Street, NW Washington, DC 20037 Telephone: 202-663-8441 Facsimile: 202?663-8007 Torn ose?ak Jason Torchinsky Michael Bayes Holtzman Vogel Jose?ak PLLC 45 North Hill Drive, Suite 100 Warrenton, VA 20186 Telephone: 540-341-8808 Facsimile: 540-341-8809 Alvin Dunn Stephen S. Asay Pillsbury Winthrop Shaw Pittman LLP 2300 Street, NW Washington, DC 20037 Telephone: 202?663?8000 Facsimile: 202-663-8007 urylawcom it was obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) EXHIBIT A Penalty of Perjury Statement Steven Law, President of Crossroads This document was obtained and uploaded by the Center for Responsive Politics (OpenSecretsorg) Penalg of Per-jug; Statement U11 der penalties of perjury, I declare that I have examined this protest statement, including LC companying documents, and, to the best of my knowledge and belief, the statement contains 3.1 the relevant facts, and such facts are true, correct, and complete. :9 I Ma Preside? of ?ssroads GPS Dated This documemt was obtained and uploaded by the Center for Politics (OpenSecrets.org) EXHIBIT Excerpt from How Politics Led the IRS to Target Conservative Tax-Exempt Applicants for their Political Beliefs, Staff Report, U.S. House of Representatives Committee on Oversight and Government Reform (June 16, 2014) This docume n1. was obtained and uploaded by the Center for Responsive Politics (OpenSecretsorg) U.S. House of Representative Committee on Oversight and Cover ment Reform Darrell Issa (CA-49), Chairman HoIiv Politics Led the IRS to Target Conservative Tax-Exempt Applicants for their Political Beliefs Staff Report 1 13th Congress June 16, 2014 This docume wt was obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) Figure 7: 1 mail from Sarah Hall Ingram to Steve Miller et al., Sept. 29, 2010 From: Sent: To: Cc: Subject: Importande: This is to 11 Justice. from her yr Commissic to The plan anything carefully These 31 should 6 Would on the mat PS. Steve Ingram Sarah Wednesday, September 29, 2010 5:29 PM Miller Steven T: Song Victor 0: Raven Rick A Lerner Lois DOJ Meeting High eadsmup you about the 1018 mootlng we have been inultod to m) rpresarva the civil criminal wall. sting and any follow-up issue-s. Lois and I are on your calendar this Friday on the Baucus la sis will take the lead for us as i will be out of town. Lois knows ears working in this of?ce {a while back and before she worker no walk them through the basic clle law roles within our iunsc so they are looking for. if they need more than the. primer the not tax people so she may also take Joe Urban to do clear pdrimelers about tax info want to do any 6103 ?shing {as opposed to puhllc record 61 ~61 like to send anyone with us? Anyone want to be prs~briof at the Criminal Division of at least some of those folks :l at Fed Election ictlon and ?nd out what if we would need to assign 04 info). ad? We would report back liar. meeting activity political speech. explains: 501(c) 0 FEC lavT :c rh l: 7 A interest i proposec prevent 1: to bring skepticis organizar 1 ,ic anizations are actually political committees ?posing? as and therefore may be subject to criminal liability.?198 whether a three-way partnership among the FEC, an )ns. 200 lb This docume 54 wt was obtained and uploaded by the Center for Resp 3 meeting occurred on October 8, 2010.196 An memor m?rms that the discussion resulted from recent media atten exempt organizations??7 This document also demonstrat retoric contributed to the Justice Department?s examination sing the same words used by the President on the campaigr ?The [Public Integrity] section?s attorneys expressed conc cording to this memorandum, the Justice Department?s Pul how to proactively address nonpro?t political speech. The )hibited activity by these organizations,? and they discusse iminal charges under FEC law.?199 According to Pilger, hc about the practicality of using criminal law to address poli .evenue Serv., Untitled Meeting Memorandum (undated). 3843 aTsis added). ed interview of Richard Pilger, U.S. Dep?t of Justice, in Wash, DC, a andum summarizing the tion on ?the political as that the President?s of nonpro?t political trail, the memorandum em that certain section if they are not subject to >lic Integrity took an active Justice Department 1 the IRS is possible to ?several possible theories ?wever, Lerner expressed tical speech by 501(c)(4) 94-95 (May 6, 2014). onsive Politics (OpenSecrets.org) Figure 8: temal IRS Memorandum on Justice Department Meeting about Nonpro?t Political Speech Ont - her 8. 2010, Lois Lerner, Joe Urban, Judy Kindell, Justin Lowe and Siri Butler met nizat'ions are aclu ly political committees ?posing? as if they are not sublect to EC i . and therefore ma - abject to criminal liability. The attorneys mentioned several ibla theories to bri . mlnal charges under FEC law. in response, Lois and Judy at uently explained the id 0? points: - der section 7805(b), we may only revoke or modify an organ *5 exemption - if it omitted or misstated a material fact or operated in manner materidly rent from that originally represented. if we do not have. these misrepresentations, the organized may rely on our determination that it is exempt. However, the likelihood of vocation is dininished by the fact that section organ? to apply for recognition of exemption. 0 We discussed the hypothetical situation of a section 501(c} 3 organization that cladares itself exempt as a social welfare organization. but the and ofthe taxable year has in fact functioned as a political organized . Judy explained that such an organization, in order to be in compliance, ld simply ?le Form 1120.POL and paying tax at the hlghest corporate rate. ?one are not required tated that although we do not beileve that organizations which a subject to a civil lubsequently receive any type of Immunity from a criminal lnvesti ation. she will refer 0 individuals from Cl who can better answer that question. She xplained that we are required to separate the civil and criminal aspects of any exami ation and that while not have E0 law experts in CI, our agents are experienced in coordinating with asked whether a change in the law is necessary. and w. ther a three-way rel-tip among DOJ, the FEC, and the IRS is possible to prevent ohibited activity by rganizations. Lois listed a number of obstacles to the attorneys theories: - 13 nitions of the following terms are not clear to a jury. A "political committee? ?Advocacy? ?Politlcal intervention? ?Express advocacy? - are is Geniusion over the difference between political campaign Tciivity and lobbying, 00000 ich we see in the referrals we receive. receive Forms 990 long after the activity has conducted. are is pubtic fatigue over this diswssion. a case like this. the defense will: go through each of the organization's expenditures explain why it is not political. apply 0 section 501(c)(4) organizational but we have no Chief Counse ruling on whether theyI different de?nitions. She pointed to Revenue Ruling 2004-5, ich was drafted in light the electioneering communication rules before they were litigate d. Jud} Iso explained that the political activity de?nitions of sections and 527 both 55 This docume hi was obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) EXHIBIT Memorandum Opinion Denying Motion to Dismiss, Street, Inc. v. Koskinen, No. 12-cv-0401 (D.D.C. May 27, 2014) This docume 11 was obtained and uploaded by the Center for Responsive Politics (OpenSecretsorg) UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA 1] STRELT, INC., Plaintiff, v. Civil Action No. 12-cv-0401 (KBJ) JOHN KQSKINEN, IN HIS OFFICIAL CAPACITY AS COIN ISIONER 0F INTERN REVENUE, Defendant. 1 MEMORANDUM OPINION ziintiff Street (?Plaintiff? or Street?) is a non-pro fit corporation in that is dedicated to educating the public about various issues related to Israel and the Middle East. Street originally filed this lawsuit in the Eastern District of in December of 2010, naming the Commission?er of the Internal Revenue Service, in his of?cial capacity, as the defendant.1 The complaint alleges that the Internal Revenue Service or ?Defendant?) violated the First Amendment when it mplemented an internal review policy that subjected Israel-related organizations that are applying for tax-exempt status under Section 501(c)(3) of Title 26 of the US. Code to more rigorous review procedures than other organizations applying for that same status. Plaintiff maintains that this so-called ?Israel Special 1 This case was initially brought against Douglas H. Shulrnan, who was Commissioner of Internal Revenue at the time the complaint was ?led. John Koskinen has been substituted pursuant to Federal Rule of Civil Procedure 25(d). 1 This docume It was obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) Policy? governir pursuan respect subject argumer constitu 26 the Cou Act immunii a claim law, the does n01 whether underpinsi each of Defendant?s grounds for dismissal?the Cou assertio equitable relief and that Plaintiff has an adequate remedy at la is correi Defendant?s motion to dismiss the complaint must be DENIEI efore this Court at present is Defendant?s motion to di 0 its that the Court nevertheless lacks subj ect-matter juri this Court?s jurisdiction under 28 U.S.C. 1331, De tipnal claim. Defendant maintains, first, that the Anti- 3; 7421 (2013), precludes this Court from exercising 1, 28 U.S.C. 2201 (2013); and third, that the doct upon which relief can be granted because Plaintiff has accept Defendant?s core contention that Street seek . . . . . . conSIStent With this opinion Will follow. 2 Plaintifi This docume 2 represents impermissible viewpoint discrimination on 1 rent, and has requested declaratory and injunctive relie 0 Rules 12(b)(1) and 12(b)(6) of the Federal Rules 01 Plaintiff?s contention that this case raises a federal bars Plaintiff?s suit. Defendant further argues that reby foreclosing the equitable relief that Plaintiff seek:' or not it is entitled to Section 501(c)(3) tax status thro :ti that it is permitted to press its constitutional claim ir he part of the federal f.2 smiss the complaint :?Civil Procedure. With uestion and is thus fendant presses three sdiction over Plaintiff?s Injunction Act jurisdiction; second, that cannot grant the relief that Plaintiff requests under tlie Declaratory Judgment rine of sovereign laintiff has failed to state an adequate remedy at .. Because this Court 3 a determination of ugh this action?which rt rejects Defendant?s '1 that the AIA, the BIA, or sovereign immunity bars Plaintiff?s request for N. Accordingly, Plaintiff federal court, and D. A separate order 150 seeks recover of all of the attorne ?s fees that it has incu ed in ursuin this action. 1? If nt was obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) I. ACKGROUND AND PROCEDURAL HISTORY hie allegations in Street?s complaint have roots that stretch back to the organization?s founding in late 2009. According to the complaint, Street was incorpo 'ated as a non-profit corporation on November 24, 2009, for the purpose of ?educating the public about Zionism; about the facts relating to the Middle East and to the existence of Israel as a Jewish State; and about Israel?s right to refuse to negotia?e with, make concessions to, or appease terrorists.? (Amended Complaint (?Am ECF No. 10, A, 3.) Approximately one month after its formation, on Dece rnber 29, 2009, Street filed an application with the IRS, seeking to be recognizdd as an organization that qualified for tax-exempt status under Section 501(c)(3) of the Internal Revenue Code, 26 U.S.C. 501(c)(3) (2013). (Id. 1] 4.)3 A in May 15, 2010, IRS Agent Diane Gentry, who was handling Street?s Section 501(c)(3)? application, sent a letter to Street requesting additional information to aid her review. (Am. Compl. 1] 16.) The amended complaint does not specify what particulai' information Agent Gentry requested, but it does allege that Street?s counsel provided additional information to the IRS on June 17, 2010. [101.) Street?s counsel then att to follow up with Agent Gentry on several occasions to find out about the status of the organization?s Section 501(c)(3) application, and was finally able to 3 Section 501(c)(3) provides a federal tax exemption for certain organizations. In relevant part, the statute a1:p ies to entities organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or educational purposes . . . no part of the net earnings of which i ?res to the benefit of any private shareholder or individual, [anc] no substantial part the activities of which is carrying on propaganda, or otherwise attempting, to influence legislation[.] 26 use 501(c)(3). This docume it was obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) reach her by phone on July 19, 2010. (Id. 111] 17-18.) The complaint alleges that during that con versation, Agent Gentry told Street?s counsel that sh 3 had two major concerns about approving the application: first, that the organization engaged in ?advocacy? activities that are not permitted under Section 501(c)(3); and second, that the IRS had special concerns about applications from organizations whose activities relate to Israel, and who se positions with respect to Israel contradict the current policies of the US. Govemrn nt. (Id. 18.) According to the complaint, Agent Gentry told Street?s counsel connect tlat the IRS carefully scrutinizes all Section 501(c)(3) :d with Israel, and that ?these cases are being sent to a applications that are special unit in the DC. office tc determine whether the organization?s activities contradict the Administration?s public policies.? (Id. 1111 24-25.) August 25, 2010, just over one month after the telep ione conversation between Street?s counsel and Agent Gentry, Street filed an initial complaint in the Eastern D?istrict of it filed an amended complaint in that court on December 17, 2010. (See ECF Nos. 1, 10.) Based upon Agent Gentry?s statements to Street?s unsel, the amended complaint alleges that the IRS maintains an ?Israel Special Policy? with respect to the Section 501(c)(3) applicatic us of organizations whose stance on Israel differs from that of the Obama administration, and that such applicat are subject to additional review procedures not otherwise applicable. (Am. i Compl. Street?s sole claim in this action is that the so-called Israel Special Policy on stitutes viewpoint discrimination in violation of the First Amendment, (id. 1111 42-44) and Street requests both a declaration that this policy is unconstitutional, and an injunction that orders the IRS to disclose information about the policy and that also This docume it was obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) bars the adjudica (ECF Nc Defenda of Februaiy 13, 2012, ECF No. 28.) The Transfer Order stated best con declaratory judgments in suits related to the classification of or Section jurisdicticn over suits arising under Section 7428: the United United St District appropri Claims, a declari However Plaintiff? U.S.C. 503(c) [sip] classi?cation process.? (Transfer Order at 1.) Columbiaion March 15, 2012. (ECF No. 29.) On April 20, 20 parties I This docume ?ll. 1.1.115- 7: nl LLJI, agency from employing the policy when it ?expeditiou tes Plaintiff?s Section 501(c)(3) application. (Id. at 16 i nia sua sponte ordered the case transferred to this Co strued as a controversy arising under 26 U.S.C. 7428 The Transfer Order also noted that ates Court of Federal Claims, or the United States Dis of Columbia. (Id. at n. see also 26 U.S.C. 7428 ate pleading, the United States Tax Court, the United 5 oir the district court of the United States for the Distric ttion with respect to? an organization?s classi?cation the Transfer Order was also careful to observe that View that this is a case about constitutionally valid 7428 is the statute which establishes Plaintiff?s right 1 sly and fairly? -) Defenth filed a motion to dismiss the amended complaint on August 8, 2011 . 19)?the motion that is the subject of this Opinion. However, after ?s motion was fully briefed, the presiding judge in thie Eastern District of urt. (See Transfer Order that Street?s case ?is which provides for ganizations under nly three courts have States Tax Court, the trict Court for the ?[U]pon the filing of an tates Court of Federal of Columbia may make nder Section [t]he Court shares rocess, and finds that 26 challenge the he case was transferred to the United States District Court for the District of 12, the Court ordered the oisupplement their existing briefing with legal authority from the DC. Circuit. was obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) til?VJ V11. Hvxil (quoting Thomas v. Principi, 394 F.3d 970, 972 (DC. Cir 2005)). Nevertheless, ??the court ne :d not accept factual inferences drawn by plaintiffs if those inferences are not supportedby facts alleged in the complaint, nor must the Court accept plaintiff's legal conclusiairs.? Disner v. United States, 888 F. Supp. 2d 83, 87 (D.D.C. 2012) (quoting Speelmaniv. United States, 461 F. Supp. 2d 71, 73 (D.D.C. 2005)). ally, when the court considers a motion to dismiss for lack of subject-matter jurisdiction under Rule the court ?is not limited to the allegations of the complaint.? Hohrz? v. United States, 782 F.2d 227, 241 (DC. Cir. 1986), vacated on other gr Hinds, 482 US. 64 (1987). Rather, ?a court may consider such materials outside the pleadings as it deems appropriate to resolve the question [of] whether it has jurisdiction to hear the case.? Scolaro v. D. C. Bd. ofElectz'ons Ethics, 104 F. Supp. 2d 18, 22 (D.D.C. 2000) (citing Herbert v. Nat ?IAcad. ofScz's., 974 F.2d 192, 197 (DC. Cir. 1992)). 2. Failure To State A Claim Under Rule 12(b)(6) A Rule 12(b)(6) motion tests the legal sufficiency of a complaint. Browning, 292 F.3d at 242. ?To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.? Ashcroft Iqbal, 556 US 662, 678 (2009) (internal quotation marks and citation omitted). y?The plausibility standard is not akin to a ?probability requirement,? but it asks for more than a sheer possibility that a defendant has acted unlawfully.? Id. (citation omitted). Although a plaintiff may survive a Rule 12(b)(6) motion even where ?recover is very remote and the facts alleged in the complaint ?must be enough to raise a right to relief above the speculative BellAtl. Corp. v. This docume was obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) Twombly i550 US. 544, 555?56 (internal quotation marks and citation omitted). Moreover,} a pleading must offer more than ?labels and conclusions? or a ?formulaic recitation of the elements of a cause of Iqbal, 556 US. at 678 (quoting Twombly, 550 US. at 555). If the facts as alleged, which must be taken as true, fail to establish that a plaintiff has stated a claim upon which relief can be granted, the Rule 12(b)(6) motion must be granted. See, Am. Chemistry Council, Inc. v. US. Dep ?t ofHealtli Human Servs., 922 F. Supp. 2d 56, 61 (D.D.C. 2013). Finally, unlike in a motion tinder Rule in deciding a 12(b)(6) motion, a court may ?consider only the facts alleged in the complaint, any documents either attached to or incorporated in the com}: laint and matters of which [the Court] may takejudici a1 notice.? EEOC v. St. Francis Xavier Parochial Sch, 117 F.3d 621, 624 (DC. Cir. 1997). B. The Anti-Injunction Act And The Declaratory Act Tax Exception A explained in more detail below, because Street seeks a declaratory judgment against the federal agency that is responsible for the assessment and collectiorn of federal taxes, its complaint requires an evaluation of the pertinence of certain statutory jurisdictional bars designed to prevent lawsuits that would otherwise interfere with the revenue collection functions. Specifically, Defendant argues that botl the AIA and the so-called ?tax exception? of the DJA bar Plaintiff?s claim. Tie AIA was first enacted in 1867, and states in relevant part that ?no suit for the purp )s?e 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 Supreme Court has noted that the AIA This document was obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) This docume ?apparent explicit. Enochs Fed ?n of Govemn enjoin to limit federal General ?may de declarat There is of actua Federal ?tax exc containe use the tax exce ?e Bob Jones Univ. v. Simon, 416 US. 725, 736 (1974). [t]he manifest purpose of [the is to permit judicial intervention, and to require that the legal disputed sums be determined in a suit for refund. manner the United States is assured of prompt co its lawful revenue. lndep. Bus. v. Sebelius, 132 S. Ct. 2566, 2582 (2012) ient?s ability to collect a consistent stream of revenue, 1 a'wsuits that have been brought to restrain or otherwis 1 vernment 5 assessment and collection? of taxes. speaking, the DJA merely provides a mechanism by dn, whether or not further relief is or could be sought. controversy within [a federal court?s] jurisdiction, ex Jd. (emphasis added). This statutory exception, com eption,? is directly related to the AIA. When first ado 3 1A as an end-run around the AIA, Congress amended ption. See ?Americans United? Inc. v. Walters, 477 ly has no legislative history,? but that ?its language States to assess and collect taxes alleged to be du Williams Packing Navigation Go, 370 US. 1, 7 (l ptherwise obstruct the collection of taxes?). Thus, tl DJA, by contrast, is not specifically aimed at curbir Clare the rights and other legal relations of any interest owever, one major limitation on the reach of the DL tines other than actions brought under [Sjection 7428 no tax exception. A year later, after plaintiffs in sev ould scarcely be more In short: he United 3 Without right to the In this llection of 962); see also Nat ?l (The AIA ?protects the by barring litigation to re clear purpose is interfere with the tax-related litigation. which federal courts ed party seeking such 28 U.S.C. 2201. it applies to ?case[s] crept with reSpect to of the Internal Revenue monly known as the DJ A pted in 1934, the DJA eral lawsuits sought to the statute by adding the 2d1169, 1175 (DC. Cir. hi was obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) This docume 1973), US. 752. DJA). 1 ?[t]he application of the Declaratory Judgment[] Act to taxes departui other pr Federal United 1 and the a recent ase that courts ail urisdiction to circumvent the AIA by providing decl restrain] 717, 72! relation to concluude that the scope of the tax exception is ?coter with the Smokele texts are, Inc. v. Pe co exten the Anti of Ore. "Ilhe well?documented history behind the tax exception ?0 ?d on other grounds sub nom. Alexander v. ?Americc (1974) (discussing the legislative history of the tax e: ~he Senate report related to the proposed tax-exception from the long-continued policy of Congress (as expr avisions) with respect to the determination, assessment taxes.? S. Rep. No. 1240, 74th Cong, Sess. 11 (19 i ?the DJ A tax exception serves a critical but 1 rig the assessment or collection of any tax.? Cohen v. 9 (DC. Cir. 2011) (en banc) (internal quotation marks ship to the AIA has led numerous courts of appeal, incl prohibition. See, Cohen, 650 F.3d at 730- ss Coal Co., 99 F.3d 573, 583 (4th Cir. 1996) (finding in underlying intent and practical effect, coextensive ntsen, 82 F.3d 930, 933 (10th Cir. 1996) (?The reach 3i 1 [nj unction Act?) (internal quotation marks and citatic 10 ms United? Inc., 416 rception provision of the amendment noted that tould constitute a radical assed in [the and and collection of 35); see also Flora v. "titles, 362 US. 145, 164 (1960). And the link between the DJA tax exception 70A has been con?rmed by the courts. The DC. Circriit, for example, noted in imited purpose. It strips aratory relief in cases United States, 650 F.3d omitted). the DJA and its uding the DC. Circuit, minous? or ?coextensive? 31; In re Leckie that ?the two statutory Wyo. Tru'cking Ass of these two statutes is ve, with the Declaratory Judgment Act reaffirming thie restrictions set out in omitted); 1000 Friends Brady, 898 F.2d 156 (9th Cir. 1990) (?The Declaratory Judgment Act is co- ht was obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) extensiv v. IRS, 7 worded ar 811 (7th from the maintenz tax?) synonyrr collection 2! mi in with the Anti-Inj unction Act?); Ecclesiastical Order 5 F.2d 398, 404-5 (6th Cir. 1984) (?The two Actsinterpreted Tomlinson Cir. 1942) is our View that the language which cc of a suit for the purpose of restraining the assessrn 5 means that the exemption for suits ?with res of federal taxes. Thus, the DJA is not available as declaratory relief in suits that the AIA otherwise bars. As that it (5 7428. organiza determir qualifice ?a failure Section limitation such sui District are empi This docume Lt? is of the ISM ofAM, Inc. ugh not similarly Smith, 128 F.2d 808, excepts federal taxes Declaratory Judgment Act is co-extensive with that which precludes the ent or collection of a pect to Federal taxes? is ous with the bar against suits that seek to restrain the ?assessment and a means to seek C. Challenges To An Organization?s Section 501(c)(3) Status Pursuant to 26 U.S.C. 7428 noted above, this case was originally transferred to this Court on the grounds as a case arising under Section 7428 of the Internal Re (Transfer Order at 1.) That statute provides a mechani tions that have applied for Section 501(c)(3) status can ation by the with respect to the initial qualificati on of an organization as an organization described in by the to make a determination with respect to? 501(c)(3) status. 26 U.S.C. 7428(3). Section 7428 a on such suits, three of which are relevant here. Firs venue Code, 26 U.S.C. sm by which either challenge ?a on or continuing [S]ection or an organization?s so places certain t, it limits the venue for to three courts: the US. Tax Court, the Court of Federal Claims, and the US. Ciourt for the District of Columbia. 26 U.S.C. 7428(. 11 1). Second, those courts )wered only to provide declaratory relief. Id. Third, organizations wishing to nt was obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) bring suit under Section 7428 to challenge either the agency?s Section 501(c)(3) determin a tion or the agency?s failure to make a Section 501(c)(3) determination in a timely fashion must exhaust all available administrative remedi i 2b; see also id. (stating that, in the case of a suit challe es. See 26 U.S.C. 7428(b)( nging the failure to provic . . shall be [6 a Section 501(c)(3) status determination, organization . Ci deemed have exhausted its administrative remedies . . . at ill! 3 expiration of 270 days after the ate on which the request for such determination was nade if the organization has take] the DJA 1,3 in a timely manner, all reasonable steps to secure suc action 7428 also has a direct relationship to the DJA. i :h determination?). Ks noted above, under tions ?with respect to tax exception, declaratory relief is not available for ac Federal es other than actions brought under [S]ection 7428 of the Internal Revenue 28 U.S.C. 2201 (emphasis added). Thus, suits brought under Section 7428 to challenge the determination of an organization?s Secti on 501(c)(3) status or the failbre to act with respect to an organization?s Section 501 application are expressl exempted from the tax exception. In other we rds, the plain language of the carves out an exception to its own tax exception, such that even if a lawsuit that is ught under Section 7428 may be considered a suit ?w ?7 ith respect to federal taxes? for? the purpose of the tax exception, declaratory relief is nevertheless 4 available. Jei explained in Part infra, although the district court in ion to be a case arising under Section 7428, this Court conclude 1e here. Consequently, the exception to the DJA tax exception pla onwhether there is a statutory bar to Street?s lawsuit. 12 ht was obtained and uploaded by the Center for Resp 4 As will i instant ac applicab analysis considered the that Section 7428 is not ys no part in the Court?s This docume onsive Politics (OpenSecrets.org) This docume Constitu U.S.C. l331?the general federal-question jurisdiction statut provides arising l. establisl review a (interna FTC, 61 gives th motion 1 exercise the Cou Mem. 01 Second, granting argues 16-20.) cotermii a single conside ALYSIS A. Subject Matter Jurisdiction aintiff asserts that, because the complaint alleges a Vic ti?on, this Court has subject matter jurisdiction over thi that ?the district courts shall have original jurisdictior inder the Constitution, laws, or treaties of the United [ed that the federal-question statute ?confer[s] jurisdict gency action.? Oryszak v. Sullivan, 576 F.3d 522, 525 quotation marks and citation omitted); see also Ass ?11 7 F.2d 611, 619 (DC. Cir. 1979) (?General federal que district courts the power to review agency action?). 1 dismiss, Defendant asserts three different arguments jurisdiction over Plaintiff?s claim. First, Defendant a1 and similarly, Defendant argues that the DJA tax exce the declaratory relief that Plaintiff seeks. (Id. at 14-1 the complaint should be dismissed on sovereign im ecause the jurisdictional bars of the AIA and DJA ta icius under the law of this Circuit, as explained above, aiialysis to determine Whether the two statutes prevent 13 rtifrom granting the injunctive relief Plaintiff seeks in i ?Law in Supp. Of Mot. To Dismiss (?Def ECF 1 ilation of the dispute under 28 3, which by its terms 1 of all civil actions tates.? Indeed, it is well- ion on federal courts to (DC. Cir. 2009) ofNat ?1 Advertisers v. :stionjurisdiction . . . \Ievertheless, in its that this Court cannot gues that the AIA bars ts complaint. (Def?s ~10. 19-1, at 4-12.) ption bars the court from 6.) Finally, Defendant munity grounds. (Id. at exception are this Court has employed the Court from 'ihg Plaintiff?s claim. Cf. Fla. Bankers Ass ?Treasury, 13-cv- nt was obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) This docume 529,201 together the reasor preclude sovereign 114519, at *6~7 (D.D.C. Jan. 13, 2014) (evaluat i immunity bar the instant action. of restrdining the assessment or collection of any tax,? 26 US. i tax exce (other tl repeatec therefor DJ A bar restrain already collectic questior taxes. 6 had dev telephor U.S.C. In ption prevents a declaratory judgment action ?with res 1 above, these two categories of cases are effectively a, the question that this Court must answer in determin the ?assessment and collection? of taxes. Fortunately, p1 m? prohibition. a. Suits Brought to Restrain The ?Assessment Taxes Cohen v. United States, the DC. Circuit (sitting en calls that the agency had previously illegally extract 14 );iJustin v. United States, 607 F. Supp. 2d 73, 76-77 (E LS explained below, this Court concludes that the AIA he exercise ofjurisdiction over Plaintiff?s constitutio 1. The AIA And DJA Do Not Bar Plaintiff?s Cor nits face, the AIA precludes lawsuits that have been one brought under Section 7428), 28 U.S.C. 2201. Street?s claim is whether the instant lawsuit is, in fa "ovided substantial guidance regarding the scope of tl 50 F.3d at 724-31. Cohen involved a challenge to a re alpped to permit aggrieved taxpayers to recoup a three- 1251). Corporate taxpayers initially challenged the tl ng AIA and DJA 2009) (same). For and DJA do not nal claim, nor does lstitutional Claim rought ?for the purpose C. 7421, and the pect to Federal taxes? As has been stated one and the same; mg whether the AIA and ct, one that seeks to the DC. Circuit has re ?assessment and and Collection Of anc) grappled with the )f precisely when the operate to bar a lawsuit related to federal fund scheme that the IRS percent excise tax on ed. Id. at 720 (citing 26 iree-percent excise tax by nt was obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) launching was illeg through time exc collectec objectinl Procedu District dismisse exhaust the DC. and also United .5 and like that the examine assessna to Feder ?almost collectic actions reasonec This docume refund suits in multiple federal courts, each of which :ail. Id. Thereafter, the IRS?which had continued to [usive mechanism for taxpayers to obtain a refund for ,3 1. Id. Numerous interested taxpayers then filed lawsr gt 0 this refund scheme on the grounds that it violated 1 Court for the District of Columbia. Id. at 721. After t] d, administrative remedies and to state a claim under the Circuit reversed in part, holding that the suit could go rates, 578 F.3d 1, 4, 14 (DC. Cir. 2009). he entire DC. Circuit granted the Government?s petitic the panel before it, reversed the judgment of the diStl'it district court did have jurisdiction over the taxpayers? at length the scope of the prohibition on suits ant or collection of taxes? and the prohibition ag al taxes.? Discussing the former, the DC. Circuit note iiteral effect?: It prohibits only those suits seeking to of taxes.? Cohen, 650 F.3d at 724 (quoting Bob Joni allenging the new refund process were not suc] 1, because the challenges at issue were ?strictly about t1 15 declared that the tax ollect the excise tax the pendency of the litigation?discontinued the tax and promulgated ?a one- :xcise taxes erroneously rits around the country :he Administrative 'e Act those suits were subsequently consolidated in the United States 1e district court the consolidated actions on the grounds that the plairitiffs had failed both to APA, a divided panel of forward under the APA., oncluding that neither the AIA nor the DJA barred the suit. See Cohen v. in for en banc review, :t court. In concluding actions, the Cohen court ?restraining the gainst suits ?with respect (1 that the AIA ?has estrain the assessment or as, 416 US. at 736). The 1 suits, the court 1e procedures under ht- was obtained and uploaded by the Center for Resp onsive Politics (OpenSecrets.org) which the IRS will return taxpayers? money.? Id. at 725 (emphasis added). The court emphasizI that the taxes in question had already been assessed and collected. Id. (?The mohey is in the US. treasury; the legal right to it has been previously determine Therefore, the exercise ofjurisdiction over the case would not ?obstruct the colle ction of revenue? or ?alter Appellants? future tax liabilities? or?shift the risk of insolve cases and outcomes that had concerned the Supreme Court in prior AIA had led it to conclude that the bar was applicable. Id. (distingpishing Snyder v. Marks, 109 US. 189 (1883); Bob Jones, 416 US. 725 (1974); California v. Grace Brethren Church, 457 US. 393 (1982)). Moreover, the Cohen court explained that the Supreme Court has already rejected the theory that the ?assessment and collection? language bars any and all lalwsuits that might ultimately impact the amount of revenue in the US. treasury Cohen, 650 F.3d at 726 (citing Hibbs v. Winn, 542 US. 88, 102 (2004)). Althoughl? outside hl [t]he IRS envisions a world in which no challenge to its actions is ever closed loop ofits taxing the DC. Circuit made clear that, under $11 reme Court precedent, the prohibition does not sweep that broadly: [a]sse; ment? is not synonymous with the entire plan of taxation, but rather with the trigger to levy and collection efforts, and ?collection? is the actual imposition of a tax against Id. (internal quotation marks and citation omitted). It is no surprise ihen, that the DC. Circuit has ?allowed constitutional claims against the IRS to go fo 'ward in the face of the and has refused to ?read[] the AIA to reach all disputes tangentially related to taxes.? Id. at 726-27 (citing We the People Foundation, Inc. v. Un ited States, 485 F.3d 140, 143 (DC. Cir. 2007)). Rather, the circuit has 16 This docume nt was obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) clearly established that whether or not the AIA and DJA prohibit a suit against the IRS depends on whether the action is fundamentally a ?tax collection claim,? id. at 727 (quoting We the People Foundation, 485 F.3d at 143), which the Court must determine based u; o?n ?a careful inquiry into the remedy sought, the statutory basis for that remedy, and any implication the remedy may have on assessment and collection.? Id. at 727.5 b. Application ofCohen Principles To Stre at ?s Constitutional Claim When viewed in the light of the standards articulated in Cohen, Street?s First Amendment claim is not ?a tax collection claim ?couched . . . in constitutional terms,? Cohen, 550 F.3d at 727 (quoting We the People Foundation, 485 F.3d at 143), and therefore cannot properly be characterized as a lawsuit implicating the ?assessment or collection? of taxes for purposes. As noted, Street-alleges not that the IRS unlawfi?lli denied it a preferred tax status, but only that the IRS subjected it to unconstitutional Viewpoint discrimination in considering its application for that status. Thus, viJctory in this action would not provide an answer to the fundamental question of whether o'r not Street is entitled to Section 501(c)(3) status, and indeed, Street is not askin for any judicial determination to that effect. Rather, Street here seeks only to have it application?good or bad?be evaluated using the same standards and criteria that apply to other organizations that the IRS reviews. 5 With re: to the DJA, the Cohen court considered two questions that tad been raised in dissent in the earlier panel decision: whether the precedents interpreting the DJA tax exception as coterminous with the A A had been superseded, and if not, whether the scope of the tax exception in fact controlleclihe scope of the AIA, rather than the other way around. Cohen, 650 F.3d at 727-31. The court ans red both questions in the negative, ultimately concluding that ?[w]hat the AIA accompli les by denying its application to ?any suit for the purpose of restraining the assessment or collectior of any tax? the DJA accomplishes by an exception ?with respect to Federal taxes.m Id. at 731. Thu the court made clear that its consideration of whether the AIA barred the suit was equally applicabl: lo the DJA. 1 7 This docume hi was obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) This docume Ir Street?s Policy informat applicati that Si 16manner suggest own tax asking organize also Lin ?primarj brought 738)). 1 wholly the issue 501(c)(3 and also are desig th lh 1i ihis regard, looking at the requested remedy as the D. mplaint requests only two things: (1) a declaration iolates the First Amendment, and (2) an injunction that ion regarding the Israel Special Policy, bars the IRS fr reet?s application be adjudicated ?fairly? and ?expedit at comports with the Constitution. Moreover, there i 16; Court to reach any conclusion regarding (or indeed, tion?s qualifications for tax-exempt status under Sectic niv. Chivatero, 714 F.2d 1278, 1282 (5th Cir. 1983) urpose? of a lawsuit in order to decide whether the 3 Hi: restrain the assessment and collection of taxes (citin Ind the fact that Street?s Section 501(c)(3) status is, liLtinguishes the instant matter from Bob Jones?a Sup centered on the decision to revoke a university? status based on the university?s racially discriminate effectively removes Street?s claim from the realm gried to ?alter [plaintiffs?] future tax liabilities? and are 18 it was obtained and uploaded by the Center for Resp her the declaration nor the injunction, on their face, aessment or collection of taxes?Z Street merely asks iabout its usual business of evaluating Section 501(c) at Street brought this action for the purpose of resc ability because the amended complaint makes C. Circuit requires, hat the Israel Special requires disclosure of om subjecting Street?s for Section 501(c)(3) status to the Israel Special leicy, and that mandates lously.? (Am. Compl. at ave direct implications the Court to require the (3) applications in a 8 nothing in the record to lving the matter of its clear that Plaintiff is not even to consider) the in 501(c)(3). (Id) See aurts must look to the uit is one that was Bob Jones, 416 US. at here, beside the point reme Court case in which 5 existing Section ry admissions policies? ftax-related actions that therefore reasonably onsive Politics (OpenSecrets.org) categori add as suits that ?seek[] to restrain the assessment or collection of taxes.? Cohen, tiiO F.3d at 725. Se 0nd, and relatedly, even if Street prevails, there is little chance that the outcome 1f this lawsuit will actually have any impact on the S. Treasury?s bottom line. Tc be sure, this matter presents a closer case than Cohen in this regard because the IRS has not yet ruled on Street?s application for Section 501(c)(3) status. Indeed, unlike circumstances in Cohen, the taxes that would be assessed and collected if Street is not deemed eligible for Section 501(c)(3) status are far from being afait accompii; thus, there is still opportunity for any IRS-related 1i 'gation, including this one, to Iralve some theoretical impact on the ultimate amount 0 Plaintiff?s not-yet- determineid tax liability. But as far as the instant lawsuit is co cerned, any such impact is clearly too remote to transform Street?s constitutional claim into a tax collection suit. As Street itself acknowledges on the very first page of its opposition brief, ?[t]otal v1 ctory by Plaintiff in this case will not determine whether or not a tax is due: it will onl iestablish a constitutionally valid (Pl.?s Mlem. of Law in Opp. to Mot. to Dismiss (?other words, Street?s ultimate tax liability will be a function of whether it qualifies for tax-favored treatment under the criteria laid out in Section 501(c)(3), not whether it prevails in this lawsuit, and the anallysis of its qualifications will be based on Street?s activities as an organization. The only matter at issue in the instant lawsuit is whether, in addition to evaluatinig Street?s activities as it would any other organization?s, the IRS may constitutionally apply a more stringent standard of review that is allegedly reserved for organizations whose activities relate to the promotion of Israel And because a negative 19 This docume it was obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) answer to that question would not automatically ensure that Street (or any other Israel-re lated organization) will receive the tax-exempt status for which it has applied, 1 the remedy sought in this lawsuit has no direct effect on the public fisc, and certainly not one iat would impact the Treasury or otherwise affect the agency?s assessment and collection of taxes. Cf Fla. Bankers Ass ?11, 2014 WL 114519, at *6 (declining to apply the bar where ?the imposition of a federal tax does not necessarily follow? from lchallenged agency action). Ncit surprisingly, Defendant argues that the bar is implicated because ?[t]he rTlief plaintiff seeks is precisely the type of preenforceniient interference that the Anti-Injulnction Act prohibits.? (Def. Br. at 5 (internal quotation marks omitted).) Relying primarily on cases from other circuits that were issued prior to Cohen and that held, in way or another, that the AIA applies broadly?ta ?not only to the assessmf: and collection of taxes, but to activities which are intended to or may culminate in the assessment or collection of taxes as (Def. Br. at 5 (quoting Linn, 714 F.2d at 1282 (Clark, C.J., dissenting))?Defendant asserts that Street?s requestedi relief falls within the ambit of the prohibition because adj udicating this lawsuit would require the Court to ?interject itself into the process by which it determines whether Plaintiff is a tax-exempt organization,? and might also ?delay (and could frustrate) the eventual assessment of tax against (Def. Br. at In addition, Defendant contends that granting the injunctive relief Plaintiff seeks wauld contravene a significant ?collateral objective? ofthe wit, the goal of prote :iing the IRS from having to endure the ?costs and delays of litigation ?pending a refund claim.? (Id. at 6 (quoting Bob Jones, 416 US. at 737).) Moreover, to the 20 This docume ?t was obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) extent that the DJA ?protects the ?overall pre-enforcement assessment and collection 3, process? :in the same manner as the AIA (id. at 15 (quoting Yamaha Motor Corp, USA v. Unitei States, 779 F. Supp 610, 613 (D.D.C. 1991)), Defendant maintains that that statute, too, ?bars the relief requested for the same reason the Anti-Injunction Act does.? (Id. at 15 n. 5.)6 Whatever the merits of these AIA/DJA-related arguments at the time Defendant?s initial briief in this matter was ?led, these arguments now clearly fail for the very simple re son that viewing the AIA as an expansive shield against every lawsuit that challeng as IRS activity was resoundingly rejected in Cohen. As explained above, the en banc DC. Circuit drew a clear line between suits that themselves seek to enjoin the assessm eiit and collection of taxes?which the AIA and DJ A prohibit?and other actions at could be brought against the IRS for a different purpose and to a different effect. S"e, Cohen, 650 F.3d at 727 (?The AIA, as its plain text states, bars suits concern rig the ?assessment or collection of any tax.? It is no obstacle to other claims seeking Id enjoin the IRS, regardless of any attenuated connection to the broader regulatcir scheme.? (emphasis added)). Defendant has essentially ignored this critical line-dra wing determination by insisting that, despite the fact that Street?s action has neither 1hve purpose nor the effect of restraining the agency?s tax-collecting function, the instant constitutional claim should nevertheless be characterized as a ?pre-enforcement? tax collection matter within the sweep of the AIA. (See Def.?s Reply Brief (?Def 5 Defendant?s initial brief in this matter was filed in a district court in the Third Circuit within two months 0 he D.C. Circuit?s Cohen decision. Presumably as a result, Defendant did not assume that the AIA nii DJA were coterminous, as the en banc DC. Circuit held, although it did recognize that courts in atiher jurisdiction had so held. (See Def. Br. at 14?15 (noting that ?the federal exemption to the Decl tory Judgment Act is at least as broad as the Anti-Injunction Act? (internal quotation marks and citatziT) omitted)).) Moreover, Defendant did not directly address Cohen and the implications of that decisrjn on its argument regarding the scope of the AIA. 3 21 This docume Hi was obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) Reply?) No. 22-1, at 7.) This contention is clearly out of step with how the AIA and DJA Lave long been interpreted in this jurisdiction. See, We the People Founda i?on, 485 F.3d at 143 (holding that the AIA did not bar a First Amendment claim against lie IRS). Indeed, in the face of Cohen?s clear pronouncement about the limits to the sc dpe of the AIA and DJA, the best Defendant can do he re is to argue that Cohen is somerw inapplicable?which it predictably maintains in its First Supplemental Brief when it p?oints out that Cohen involved an APA claim and asserts that the DC. Circuit?s holding tinned on the presence of ?final agency action,? which, according to Defendant, is lackir here. (See Def.?s First Supp. Br., ECF No. 33, at 3 Street?s reliance on Cohen is inapposite because there is no final agency action for the Court to review in this casti. But Street has not brought any APA challenge as explained further below, and this Court is at a loss to see how the presence, or absence, of final agency action any bearing on the threshold issue of whether the st 1tutory prohibitions set Defendant?s attempt to recharacterize Cohen as a case that ad esses only APA claims, and ther draw attention away from its holding regarding th extent and applicability forth in the AIA and DJA prohibit Street?s constitutional claim. In any event, of the is clearly mistaken. See Cohen, 650 US. at 736 (concluding that because the suit did not concern the assessment or collection of taxes, ?neither the AIA nor the DJA provide a limitation on [the court?s] exercise of [j 7 Because this Court concludes that the AIA and DJA on their face are not applicable to Plaintiff?s claim, it clqes not need to address Defendant?s additional arguments as to why Plaintiff?s claim does not meet the :riteria for certainjudicially crafted exceptions to those statutes? jurisdictional bars. (See Def. Br. eff-14.) 22 This document was obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) 2. Sovereign Immunity Does Not Bar Plaintiff?s Constitutional Claim As an alternative to the argument that the AIA and DJ A bar Plaintiff?s First Amendinent claim, Defendant argues that the Court nonetheless lacks jurisdiction because of sovereign immunity. Under the firmly-established doctrine of sovereign immunity, the United States is immune to suit unless Congress has expressly waived the immunity defense. See, United States v. Mitchell, 463 US. 206, 212 (1983) (?It is axiomaiic that the United States may not be sued without its cansent and that the existence of consent is a prerequisite CoheTs v. Virginia, 19 US. 264, 411-112 (1821) (?The universally received opinion is, that no suit can be commeTced or prosecuted against the United Webman v. Fed. Bureau of Prisons, 441 F.3d 1022, 1025 (DC. Cir. 2006). The sovereign immunity doctrine applies equally to the government itself and to a federal official sued in his official capacity. Jackson v. Donovan, 844 F. Supp. 2d 74, 76 (D.D.C. 2012) (citing Kentucky v. Graham, 473 US. 159, 165-66 (1985)). Where a plaintiff hias brought suit against the federal government (or a government official sued as such), a federal court is withoutjurisdiction to consider the complaint in the absence of an express waiver of sovereign immunity. See FDIC v. Meyer, 510 US. 471, 475 (1994) (noting that ?[s]ove "eign immunity is jurisdictional in nature?); Fleming v. Nat ?l Transp. Safety Bd, 13-5287, 2014 WL 590974, at *1 (DC. Cir. Feb. 7, 2014) (same). The plaintiff bears the of establishing that sovereign immunity has been waived or abrogated. Tri- State H) p. Supply Corp. v. United States, 341 F.3d 571, 575 (DC. Cir. 2003). recording to Defendant, Street has failed to carry this burden because its complaint invokes only the BIA (28 U.S.C. 2201) and the general federal-question 23 This docume it was obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) This docume jurisdic Plaintif waiver correct waiver 107, 11 bars the Br. at 8 i 5 U.S.C. moneta employ repeate aHeged certain damage the ageT 3 Plaintif" contentio sovereign immunity. (Def. Br. at 17-18.) As an ini tliat neither Section 2201 nor Section 1331 of Title 28 3 sovereign immunity. See Walton v. Fed. Bureau of 4: )8 ?he relevant APA provision provides that States is an indispensable party. 'y damages that allege wrongful action by an agency 0 3 rs, and the instant lawsuit ?ts precisely those criteria ly above, Street seeks only declaratory and injuncti process that the IRS uses to review the Section 501(c) 3] Id. Moreover, Street?s First Amendment claim dy, or its employees, in allegedly employing the Israe brief in opposition to Defendant?s motion to dismiss identifi that sovereign immunity has been expressly waived. (See P1. 24 5 claim, neither of which, according to Defendant, pr (D.D.C. 2008). But Defendant is wrong to argue the [a]n action in a court of the United States seekin other than money damages and stating a claim th agency or an officer or employee thereof acted or failed to act in an official capacity or under color of legal shall not be dismissed nor relief therein be denie ground that it is against the United States or that 702. This section waives sovereign immunity with "ganizations submit; thus, it is an action ?seeking reli i owledging that Plaintiff relies on the APA for sovereign imm Hli was obtained and uploaded by the Center for Resp on statute (28 U.S.C. 1331) as the basis ofthis Couirt?s jurisdiction over ovides the requisite tial matter, Defendant is provides an express Prisons, 533 F. Supp. 2d Lt sovereign immunity instant action because Congress, through the Administrative Procedure Act )i has expressly waived sovereign immunity for suits such as this one. (See Pl. relief at an authority on the the United respect to suits for non- 1' its officers or As has been stated re relief regarding the (3) applications that 3f other than money hallenges the actions of 1 Special Policy. the APA as the basis for its r. at see also Def. Reply mity purposes).) onsive Politics (OpenSecrets.org) ConseqL ently, the waiver of sovereign immunity that the APA provides covers the claim at issue here. See, Kaufman v. Mukasey, 524 F.3d 1334, 1338 n. 5 (DC. Cir. 2008) (sovereign immunity did not bar constitutional claims against seeking injunctive relief against the Attorney General); Clark v. Library ofCong. 750 F.2d 89, 102 (DC. Cir. 1984) (noting that the APA ?eliminated the sovereign immunity defense in virtually all actiohs for non-monetary relief against a US. agency or officer acting in an official capacity?). De?fendant recognizes that the APA provides a sovereign immunity waiver; nevertheless, it argues that Street?s claim does not qualify for that waiver because the waiver provision appears in the APA and there has been no ?fi ial agency action? in this case, which is a prerequisite for suits in federal court that are brought pursuant to the APA. (See Def. Reply at 3-6.) See also Fundfor Animals, Inc. v. US. Bureau ofLana? Mgmt., 160 F.3d 13, 18 (DC. Cir. 2006) (?Review under the APA is . . . limited to ?final agency action for which there is no other adequate remedy in a court.? (quoting 5 U.S.C. 704)). Defendant?s argument misunderstands both the nature of the waiver of sovereign immunity and the ?final agency action? requirement. F. of all, it is clear beyond cavil that a suit need not have been brought pursuant to the APA in order to receive the benefit of that statute?s sovereign immunity waiver; indeed, the waiver of sovereign immunity app ies to any suit whether under the APA or not.? Chamber ofCommerce v. Reich, 74 F.3d 1322, 1328 (DC. Cir. 1996). 11?0 be sure, the instant action is not a suit that has been brought pursuant to the APA. ut that fact is of no moment because ?[t]here is nothing in the language of the second 5 entence of 702 that restricts its waiver to suits brought under the 25 This docume hi was obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) Trudeau ?waives relief ot it suits the means 6 suits brwiu. action? exhaust process has renc Prod. St the final into the Wright [final a admini that Cong the sco; express entirely This docume 1FTC, 456 F.3d 178, 186 (DC. Cir. 2006); see also sovereign immunity for action in a court of the 1 er than money damages,? not [solely] for an action br en conceptually related to, the statute?s sovereign im under the APA do trigger the ?final agency actio quirement that serves to protect the administrati insofar as it limits the court?s ability to consider an A (internal quotation marks and citation omitted)); se ncy action] requirement is intended both to preserve ative process and protect judicial resources?) There Waiver of immunity from suit under specified circumst different than a prescription that a claim brought unde 26 rthermore, the ?final agency action? requirement?w] have been brought under the substantively red its final decision. See Reliable Automatic Sprink 'ety Comm 324 F.3d 726, 732 (DC. Cir. 2003) (not agency action requirement is both to keep courts frorr Arthur R. Miller, Federal Practice and Procedure 8 gress intended for the ?final agency action? requireme (noting that the APA Inited States seeking I ought under the 1ich is applicable only to lifferent than, and by no unity waiver. Although I mandate, ?final agency is not a demand that relates to a federal court?s jurisdi tion but is, instead, an decision-making A claim until an agency ler Co, Inc. v. Consumer ing that the purpose of 1 ?improperly intrud[ing] agency?s decisionmaking process? and to avoid ?squamder[ing] judicial 2 also 33 Charles A. 397 (3rd ed. 2004) (?The the integrity of the is no reason to believe nt to have any bearing on of the separate sovereign immunity waiver, nor should it, given that an ances is by nature I a certain statutory was obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) provision; must be exhausted prior to suit. Cf. Reliable Automatic Sprinkler Co., 324 F.3d at 731 (noting that ?the requirement of final agency action is not Finally, and in any event, the DC. Circuit has already onsidered?and firmly This docume rejected argument also hold agency at 723. conferr' SEC, 71 claim? because affectec APA cl. action an federal 648 F.3d ll presenc citation indepeer APA c1 its cont jurisdicti 11' S1 1 1i 0 31? ?the same faulty ?no final agency action equals no so? that Defendant seeks to advance here. See Trudeau, that the [sovereign immunity] waiver applies regardl action in question] constitutes ??nal agency is well-established that, because that the APA is not statute, see Callfano v. Sanders, 430 US. 99, 107 F.3d 342, 347 (DC. Cir. 2013), the statutory prereqL ich as final agency action?have no jurisdictional im] )y agency action,? Trudeau, 456 F.3d at 185, the rest] ms apply only ifthat statute is the basis on which the do not present any jurisdictional bar to plaintiffs se courts under a cause of action unrelated to the APA. 848, 854 (DC. Cir. 2011) (?We expressly reject[] the of final agency action is ajurisdictional issue.? (inter mitted)). ent of the APA, it may eschew the statutory requirem rims and rely nevertheless on the sovereign imn lthI?l that sovereign immunity does not block the cour on over the claim. 27 And, as already noted, where a plaintiff ha zereign immunity waiver? 456 F.3d at 187 (?We :55 of whether [the see also Cohen, 650 F.3d in itself, ajurisdiction? 1977); NetCoalitz'on v. iisites to bringing an APA not. In other words, the APA simply provides ?a limited cause of action foir parties adversely ictions that attach to plaintiff states a cause of aking access to the f. Sierra Club v. Jackson, proposition that the nal quotation marks and a cause of action that is ents that apply only to iunity waiver to support from exercising was obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) inj uncti 44.) Th Hubbard sue the unconstit Thus, Pla it is here. Street seeks to proceed with an action f1 DC. Circuit ?ha[s] inferred such a Trudea v. EPA, 809 F.2d 1, 11 n.15 (DC. Cir 1986) (holding PA for violating the First Amendment because ?the utional acts by the government . . . is inherent in the intiff has a cause of action independent of the APA. i relief that arises directly out of the First Amendmen 3r declaratory and t. (Am. Comp]. 111] 42- u, 456 F.3d at 190 (citing that the plaintiff could )urt?s power to enjoin Constitution itself?)). Moreover, its First Amendfnent claim quali?es as one ?seeking relief other than money damages and stating an officia APA pr 0* this Cour I relief 0: is not are not issue 453 F3 WL 21] Federal obtainir for whi This docume )e 1.2 :l a claim that an agency or an of?cer or employee thereo Ll capacity?; therefore, it falls within the waiver of so vides. See 5 U.S.C. 702. Consequently, sovereign ofjurisdiction over Plaintiff?s claim. acted or failed to act in vereign immunity that the mmunity does not divest B. Equitable Relief Can Be Granted Because Plaintiff Has No Other Adequate Remedy At Law :fendant?s final argument is that Street has failed to be granted because it has an adequate remedy at law lilable to it. (Def. Br. at 1-2.) ?The general rule is th when an adequate remedy at law exists.? Richards 525, 531 n. 6 (DC. Cir. 2006); see also Sibley v. Mar 219 (DC. Cir. Jan. 9, 2014) (same); 11A Charles A. V1 ractice Procedure 2942 (2d ed. 1995) ma state a claim upon which and thus injunctive relief at injunctive relief Will Delta Air Lines, Inc. :aluso, 13-7128, 2014 7right Arthur R. Miller, in prerequisite to injunctive relief is a finding that plaintiffis being threatened by some injury 1 he has no adequate legal remedy?). 28 1i was obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) (D fendant purports to identify four different avenues through which Street can obtain the relief it seeks. First, Defendant suggests that Street can file a suit under 26 U.S.C. 7428 to compel a determination from a federal court as to whether or not it qualifies. for tax-exempt status under Section 501(c)(3). (Def. Br. at 3.) Second, Defenda nit contends that, if the IRS determines that Street do es not qualify for Section 5 status, Street can challenge that determination in United States Tax Court under 26 U.S.C. 6212-13. (Id.)9 Third, Defendant argues that if any tax is assessec against Plaintiff, it can pay the tax and then sue for a refund under 26 U.S.C. 7422. (1d. at 4.) And ?nally, in a variation of its third argument, Defendant argues that a drinor to Street can claim a deduction for its donation, and if the deduction is disallowed, sue for a refund under 26 U.S.C. 7422. (Id) As explained below, this Court cam cludes that none of these paths to the courthouse would in fact provide Street vsith an adequate remedy for the harm that it has alleged. 1. A Challenge To The Determination Of Plaintiff?s Qualifications Under 26 U.S.C. 8 7428 (D ction 7428 of Title 26 of the US. Code provides exclusive jurisdiction in the US. Tar Court, the Court of Federal Claims, or the US. District Court for the District of Colu ia for any controversy involving ?a determination by the with respect to the iritial qualification or continuing qualification of an organization described in? Section 501(c)(3) of the Internal Revenue Code. As noted above, the instant case was transfer 'ed to this district from the Eastern District of on the ground that it is a case arising under 26 U.S.C. 7428. (See Transfer Order at 1.) It is not difficult 9 Defendan ?5 reference to 26 U.S.C. 6613 in its brief (Def. Br. at 3) is apparent misprint; the intended ~e erence appears to be to 6213. See 26 U.S.C. 6213 (settin forth procedures for filing a deficiency uit). i 29 This docume 1i was obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) to see why Defendant points to this statute as providing Plaintiff an adequate remedy at law?{hie statute establishes an express cause of action for organizations that seek to challenge the agency?s determination that they are not qualified for tax-exempt status under action 501(c)(3), and there is no dispute that the genesrs of the instant lawsuit is Street?s; application for Section 501(c)(3) status; indeed, Street became aware of the alleged Israel Special Policy as a result of the agency?s process of determining whether or not tlie organization would qualify for such status. But upm closer inspection, it is clear 11th Section 7428 is not, in fact, the source of Street?s claim, and what is more, Section 7428?s limited cause of action does not even authorize the relief that Street is seeking liere. By its terms, Section 7428 applies when there is an ?actual controversy? involving ?a determination by? the IRS with respect to ?the initial qualification or continu ng qualification of an organization as an organization described in? Section 501(c)(3). Accordingly, the only available remedy under Sect] on 7428 is ?a declaration with redpect to [an organization?s] initial qualification or continuing qualification? for tax status. 26 U.S.C. 7428(a)(1). This language makes clear that Congress enacted Section 7428 to provide an effective mechanism for organizations to seek juc i :ial review of an IRS determination (or lack of determination) of their Section 501(c)(3) status?an interpretation that the legislative history of the provision also support;. See, S. Rep. 94?938 at 587, 1976 U.S.C.C.A.N. 3438 at 4011 (describing Section 7428 as an ?amendment for a declaratory judgment procedure under which an organizrtion can obtain ajudicial determination of its own status as a charitable, etc., organiz ition? . 30 This docume nti was obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) By contrast, Street?s complaint does not ask this Court to review or determine whether it is entitled to Section 501(c)(3) status; rather, Street has been adamant in its papers and at the motion hearing that it does not seek through this lawsuit to be awardec that status at all. (See, Pl. Br. at 1; Hr?g Transcript, ECF No. 44, at 11219?2 4.) Instead, regardless of whether or not it is ultimately granted tax-exempt status, I?lbintiff seeks only to have a ?constitutionally valid process? used when its application for Section 501(c)(3) status is evaluated?nothing more and nothing less. (Id) This distinction is not lost on the parties: in their respective responses to the Court?s order requesting supplemental brie?ng on the question of whether this case did in fact arise under Section 7428, both denied that this was a matter brought under that statute. (See Def.?s Second Supp. Mem, ECF No. 38, at 6-9; Second Supp. Mem., ECF NC. 37, at 5-6.) And the transfer order itself stated that ?this case is about a constitutionally valid process,? not a determination of whether Plaintiff qualified for tax-exe apt status. (Transfer Order at n. 1.) Furthermore, because the plain language of the statute authorizes the reviewing court only to issue ?a declaration with reSpect to [an organization?s] initial qualification or continuing qualification? for tax-exempt status, it appears that this Court would not have the authority to grant the relief that Plaintiff has requested?a declaration that the alleged ?Israel Special Policy? is unconstitutional and an injunction against its further use?und er that statutory provisiTn. Consequently, this instant action does not arise under Section 7428, nor does that sta ute provide an adequate remedy at law through which Plaintiff can obtain the relief it seeks. 31 This documeni was obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) A Section adequatT allow an petition see also the asse action 5! under the provides 1 determina and 6213 2. A ?De?ciency? Or ?Refund? Suit Under 26 7422 sian alternative to its argument that Plaintiff could hay 7128, Defendant points to 26 U.S.C. 6212-13 as pro 1 Organization that has received a notice of deficiency emedy at law such that an injunction is not warrante ?ith the Tax Court for a redetermination of the deficie ;dment and collection of income taxes [to] litigate the I "notice to that taxpayer, who then has the right to chal ultimate alternati invocati or relies on 1 organizat constituti tax liability, which means that the invocation of those ve remedy fails for the same reason that this Court reje i 1 of Section 7428. In short, the argument that Sectior the assumption that Street?s claim in this case is ab applicat I provide F. suit pursu Plaintiff an adequate remedy for the claim it has actua inally, it almost goes without saying that Defendant?s ant to 28 U.S.C. 7422 provides an adequate remedy 32 This docume nt was obtained and uploaded by the Center for Resp ,tion of a deficiency in the Tax Court. The deficiency authorize are by their very nature aimed at the detern ion?s core contention is not about the amount of tax 0 onality of the process that the IRS employs in evalua1 SC. 86 6212-13 Or sought relief under viding Plaintiff an d. These provisions mm the IRS to ?file a ncy.? 26 U.S.C. 6213; Blob Jones, 416 US. at 730 (Sections 6212 and 6213 allow a taxpayer, ?upon egality of the petitioning the Tax Court to review a notice of deficiency?). In other words, 5e statutes, if the IRS determines that a taxpayer has atax deficiency, it lenge the suits that Sections 6212 iination of a taxpayer?s sections as an acted Defendant?s '18 6212 and 6213 apply out tax liability, when the wed but about the ing the Section 501(c)(3) ions of Israel?related organizations. Consequently, a deficiency suit will not ly brought. contention that a refund is similarly flawed. onsive Politics (OpenSecrets.org) Regardles a deductlic adminisr r4 been error specifie s, before biri 6213,Sec (erronec Bon no tax ha< related To hand, denied ta: other, eTic neither ca claim reg Therefore has an ad And give] maintaiT Court al which I This docume u, I :lief can be granted. 5 of whether Plaintiff itself brings such a suit or a do brings it (as Defendant speculates), Section 7422 ative framework under which suits seeking to recover 1eously or illegally assessed or collected? may be bro among other things, the administrative remedies a pl nging such suit. See 26 U.S.C. 7422. However, ju tion 7422 is only relevant if taxes have been assessec sly), and ifthe taxpayer seeks a refund of the money Jones, 416 US at 730-31. Here, there is no refund been assessed or collected, nor is Plaintiff?s challen any such remedy. In this regard, it makes no differei treet waits for a Section 501(c)(3) determination to t-exempt status, pays taxes and later brings a Section .ourages a donor to do so after the donor has been der LSC would a suit seeking a tax refund address the orga arding the procedures used in determining its Section this Court concludes that Defendant is mistaken wh that Street?s complaint must be dismissed pursu rejects Defendant?s contention that Street has fail 33 ni was obtained and uploaded by the Center for Responsive Politics (OpenSecrets.org) nor who has been denied rerely provides an taxes ?alleged to have ught to court, and aintiff must exhaust at like Sections 6212 and and collected that was tendered. See, 3 be requested because ge even tangentially ace whether, on one made and, if it is 7422 suit, or, on the tied a deduction?in nization?s constitutional 501(c)(3) status. en it argues that Plaintiff equate remedy at law such that it is foreclosed from seeking inj unctive relief. 1 that the ?adequate remedy at law? theory is Defendant?s only basis for ant to Rule the ed to state a claim upon IV. (FONCLUSION i ?iled to bare essence, all of Defendant?s arguments for why this matter must be immuni dismiss ej?(l) that the AIA and DJA bar Plaintiff?s claims; (2) that sovereign protects the Defendant; and (3) that no injunction is available because Plaintiff has an adequate remedy at law?rest on the character zation of Street?s claim as a con laint about tax liability, when it is not. To be sure, Congress has, for good reason, p, ovided statutory safeguards to ?protect[] the Government?s need to assess and collect ralxes as expeditiously as possible with a minimum of judicial interference.? Bob Jones, 416 US. at 736. But the importance of the tax collecti 311 function to the overall operation of the Federal government does not mean that eachland every lawsuit against the matter the actual claim?is susceptible to refra ning as one that interferes with that critical function. See Cohen, 650 F.3d at 727. 3fendant struggles mightily to transform a lawsuit that clearly challenges the constitutionality of the process that the IRS allegedly employs when it determines the tax-exempt status of certain organizations into a dispute over tax liability as a means of attempt ng to thwart this action?s advancement. But the instant complaint, which in no way seejlks an assessment of the taxes to be paid or even a dete'mination of the Plaintiff?s Section 501(c)(3) status, is not so easily deterred. Consequently, as the accomp ariying order states, Defendant?s motion to dismiss must be denied. DATE: May 27, 2014 (Mania Elbow?; yaw/wan KETANJI BROWN JACKSON United States District Judge 34 This document was obtained and uploaded by the Center for Politics (OpenSecrets.org)