
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC7432]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                Subtitle F--Procedure and Administration
 
                    CHAPTER 76--JUDICIAL PROCEEDINGS
 
        Subchapter B--Proceedings by Taxpayers and Third Parties
 
Sec. 7432. Civil damages for failure to release lien


(a) In general

    If any officer or employee of the Internal Revenue Service 
knowingly, or by reason of negligence, fails to release a lien under 
section 6325 on property of the taxpayer, such taxpayer may bring a 
civil action for damages against the United States in a district court 
of the United States.

(b) Damages

    In any action brought under subsection (a), upon a finding of 
liability on the part of the defendant, the defendant shall be liable to 
the plaintiff in an amount equal to the sum of--
        (1) actual, direct economic damages sustained by the plaintiff 
    which, but for the actions of the defendant, would not have been 
    sustained, plus
        (2) the costs of the action.

(c) Payment authority

    Claims pursuant to this section shall be payable out of funds 
appropriated under section 1304 of title 31, United States Code.

(d) Limitations

      (1) Requirement that administrative remedies be exhausted

        A judgment for damages shall not be awarded under subsection (b) 
    unless the court determines that the plaintiff has exhausted the 
    administrative remedies available to such plaintiff within the 
    Internal Revenue Service.

                      (2) Mitigation of damages

        The amount of damages awarded under subsection (b)(1) shall be 
    reduced by the amount of such damages which could have reasonably 
    been mitigated by the plaintiff.

                   (3) Period for bringing action

        Notwithstanding any other provision of law, an action to enforce 
    liability created under this section may be brought without regard 
    to the amount in controversy and may be brought only within 2 years 
    after the date the right of action accrues.

(e) Notice of failure to release lien

    The Secretary shall by regulation prescribe reasonable procedures 
for a taxpayer to notify the Secretary of the failure to release a lien 
under section 6325 on property of the taxpayer.

(Added Pub. L. 100-647, title VI, Sec. 6240(a), Nov. 10, 1988, 102 Stat. 
3746.)


                            Prior Provisions

    A prior section 7432 was renumbered 7437 of this title.


                             Effective Date

    Section 6240(c) of Pub. L. 100-647 provided that: ``The amendments 
made by this section [enacting this section] shall apply to notices 
provided by the taxpayer of the failure to release a lien, and damages 
arising, after December 31, 1988.''

                  Section Referred to in Other Sections

    This section is referred to in section 7433 of this title.
