§ 7433. Civil damages for certain unauthorized collection actions

Legislative history

Reconstructed from this section’s Code source credit and amendment notes, resolved against the local Statutes at Large. Editorial notes are evidence, not the law that made the change.

1. 1988

   Omnibus Taxpayer Bill of Rights

   Pub. L. 100–647 title VI § 6241(a) · 102 Stat. 3342

   Enacted · 26 U.S.C. § 7433

   Added Pub. L. 100–647, title VI, § 6241(a), Nov. 10, 1988, 102 Stat. 3747

   Source evidence

   Code source credit
   Added Pub. L. 100–647, title VI, § 6241(a), Nov. 10, 1988, 102 Stat. 3747

   Enacted provision · exact public law section
   (a) In General.— Subchapter B of chapter 76 of the 1986 Code (relating to proceedings by taxpayers and third parties) is further amended by redesignating section 7433 as section 7434 and by inserting after section 7432 the following new section: “SEC. 7433. CIVIL DAMAGES FOR CERTAIN UNAUTHORIZED COLLECTION ACTIONS. “(a) In General.— If, in connection with any collection of Federal tax with respect to a taxpayer, any officer or employee of the Internal Revenue Service recklessly or intentionally disregards any provision of this title, or any regulation promulgated under this title, such taxpayer may bring a civil action for damages against the United States in a district court of the United States. Except as provided in section 7432, such civil action shall be the exclusive remedy for recovering damages resulting from such actions. “(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 lesser of $100,000 or the sum of— “(1) actual, direct economic damages sustained by the plaintiff as a proximate result of the reckless or intentional actions of the officer or employee, and “(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.”

2. 1996

   Taxpayer Bill of Rights 2

   Pub. L. 104–168 § 801(a) · 110 Stat. 1452

   Substituted · 26 U.S.C. § 7433(b)

   Pub. L. 104–168, § 801(a), substituted “$1,000,000” for “$100,000”

   Source evidence

   Code amendment note
   Subsec. (b). Pub. L. 104–168, § 801(a), substituted “$1,000,000” for “$100,000”.

   Enacted provision · exact public law section
   (a) General Rule.— Subsection (b) of section 7433 (relating to damages) is amended by striking “$100,000” and inserting “$1,000,000”.

3. 1996

   Taxpayer Bill of Rights 2

   Pub. L. 104–168 § 802(a) · 110 Stat. 1452

   Amended · 26 U.S.C. § 7433(d)(1)

   Pub. L. 104–168, § 802(a), amended par. (1) generally. Prior to amendment, par. (1) read as follows:

   Source evidence

   Code amendment note
   Subsec. (d)(1). Pub. L. 104–168, § 802(a), amended par. (1) generally. Prior to amendment, par. (1) read as follows:

   “(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.”

   Enacted provision · exact public law section
   (a) General Rule.— Paragraph (1) of section 7433(d) (relating to civil damages for certain unauthorized collection actions) is amended to read as follows: “(1) Award for damages may be reduced if administrative remedies not exhausted.— The amount of damages awarded under subsection (b) may be reduced if the court determines that the plaintiff has not exhausted the administrative remedies available to such plaintiff within the Internal Revenue Service.”.

4. 1998

   Taxpayer Bill of Rights 3

   Pub. L. 105–206 § 3102(a)(1)(A) · 112 Stat. 685

   Inserted · 26 U.S.C. § 7433(a)

   Pub. L. 105–206, § 3102(a)(1)(A), inserted “, or by reason of negligence,” after “recklessly or intentionally”

   Source evidence

   Code amendment note
   Subsec. (a). Pub. L. 105–206, § 3102(a)(1)(A), inserted “, or by reason of negligence,” after “recklessly or intentionally”.

   Enacted provision · exact public law section
   (A) in subsection (a), by inserting “, or by reason of negligence,” after “recklessly or intentionally”; and

   Effective date note
   Amendment by Pub. L. 105–206 applicable to actions of officers or employees of Internal Revenue Service after July 22, 1998, see section 3102(d) of Pub. L. 105–206, set out as a note under section 7426 of this title.

5. 1998

   Taxpayer Bill of Rights 3

   Pub. L. 105–206 § 3102(a)(1)(B)(i) · 112 Stat. 685

   1. Inserted · 26 U.S.C. § 7433(b)

      Pub. L. 105–206, § 3102(a)(1)(B)(i), (c)(2), in introductory provisions, inserted “or petition filed under subsection (e)” after “subsection (a)”

   2. Inserted · 26 U.S.C. § 7433(b)

      Pub. L. 105–206, § 3102(a)(1)(B)(i), (c)(2), in introductory provisions, inserted “($100,000, in the case of negligence)” after “$1,000,000”

   Source evidence

   Code amendment note
   Subsec. (b). Pub. L. 105–206, § 3102(a)(1)(B)(i), (c)(2), in introductory provisions, inserted “or petition filed under subsection (e)” after “subsection (a)” and inserted “($100,000, in the case of negligence)” after “$1,000,000”.

   Enacted provision · exact public law section
   (i) in the matter preceding paragraph (1), by inserting “($100,000, in the case of negligence)” after “$1,000,000”; and

   Effective date note
   Amendment by Pub. L. 105–206 applicable to actions of officers or employees of Internal Revenue Service after July 22, 1998, see section 3102(d) of Pub. L. 105–206, set out as a note under section 7426 of this title.

6. 1998

   Taxpayer Bill of Rights 3

   Pub. L. 105–206 § 3102(a)(1)(B)(ii) · 112 Stat. 685

   Inserted · 26 U.S.C. § 7433(b)(1)

   Pub. L. 105–206, § 3102(a)(1)(B)(ii), inserted “or negligent” after “reckless or intentional”

   Source evidence

   Code amendment note
   Subsec. (b)(1). Pub. L. 105–206, § 3102(a)(1)(B)(ii), inserted “or negligent” after “reckless or intentional”.

   Enacted provision · exact public law section
   (ii) in paragraph (1), by inserting “or negligent” after “reckless or intentional”.

   Effective date note
   Amendment by Pub. L. 105–206 applicable to actions of officers or employees of Internal Revenue Service after July 22, 1998, see section 3102(d) of Pub. L. 105–206, set out as a note under section 7426 of this title.

7. 1998

   Taxpayer Bill of Rights 3

   Pub. L. 105–206 § 3102(a)(2) · 112 Stat. 685

   1. Substituted · 26 U.S.C. § 7433(d)(1)

      Pub. L. 105–206, § 3102(a)(2), substituted “Requirement that administrative remedies be exhausted” for “Award for damages may be reduced if administrative remedies not exhausted” in heading

   2. Amended · 26 U.S.C. § 7433(d)(1)

      Pub. L. 105–206, § 3102(a)(2), amended text of par. (1) generally. Prior to amendment, text read as follows: “The amount of damages awarded under subsection (b) may be reduced if the court determines that the plaintiff has not exhausted the administrative remedies available to such plaintiff within the Internal Revenue Service.”

   Source evidence

   Code amendment note
   Subsec. (d)(1). Pub. L. 105–206, § 3102(a)(2), substituted “Requirement that administrative remedies be exhausted” for “Award for damages may be reduced if administrative remedies not exhausted” in heading and amended text of par. (1) generally. Prior to amendment, text read as follows: “The amount of damages awarded under subsection (b) may be reduced if the court determines that the plaintiff has not exhausted the administrative remedies available to such plaintiff within the Internal Revenue Service.”

   Enacted provision · exact public law section
   (2) Requirement that administrative remedies be exhausted.— Paragraph (1) of section 7433(d) is amended to read as follows: “(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.”.

   Effective date note
   Amendment by Pub. L. 105–206 applicable to actions of officers or employees of Internal Revenue Service after July 22, 1998, see section 3102(d) of Pub. L. 105–206, set out as a note under section 7426 of this title.

8. 1998

   Taxpayer Bill of Rights 3

   Pub. L. 105–206 § 3102(c)(1) · 112 Stat. 685

   Added · 26 U.S.C. § 7433(e)

   Pub. L. 105–206, § 3102(c)(1), added subsec. (e)

   Source evidence

   Code amendment note
   Subsec. (e). Pub. L. 105–206, § 3102(c)(1), added subsec. (e).

   Enacted provision · exact public law section
   (1) In general.— Section 7433 (relating to civil damages for certain unauthorized collection actions) is amended by adding at the end the following new subsection: “(e) Actions for Violations of Certain Bankruptcy Procedures.— “(1) In general.— If, in connection with any collection of Federal tax with respect to a taxpayer, any officer or employee of the Internal Revenue Service willfully violates any provision of section 362 (relating to automatic stay) or 524 (relating to effect of discharge) of title 11, United States Code (or any successor provision), or any regulation promulgated under such provision, such taxpayer may petition the bankruptcy court to recover damages against the United States. “(2) Remedy to be exclusive.— “(A) In general.— Except as provided in subparagraph (B), notwithstanding section 105 of such title 11, such petition shall be the exclusive remedy for recovering damages resulting from such actions. “(B) Certain other actions permitted.— Subparagraph (A) shall not apply to an action under section 362(h) of such title 11 for a violation of a stay provided by section 362 of such title; except that— “(i) administrative and litigation costs in connection with such an action may only be awarded under section 7430; and “(ii) administrative costs may be awarded only if incurred on or after the date that the bankruptcy petition is filed.”.

   Effective date note
   Amendment by Pub. L. 105–206 applicable to actions of officers or employees of Internal Revenue Service after July 22, 1998, see section 3102(d) of Pub. L. 105–206, set out as a note under section 7426 of this title.

10 of 10 references resolved to an enrolled provision