City of Galt v. United States

MEMORANDUM OF DECISION AND ORDER

LEVI, District Judge.

This dispute arises out of certain bonds that were issued in 1986. The City of Galt and City of Galt Public Finance Authority (“Galt”) seek a preliminary injunction against defendants (“IRS”) prohibiting the IRS from declaring the interest on the bonds as taxable or from seeking to collect a rebate from Galt of certain monies known as arbitrage. For the reasons stated below, the court finds that the Anti-Injunction Act and the tax exception to the Declaratory Judgment Act bar this action.

I

The facts are complex and are in dispute. The…