US (United States) Code. Title 26. Subtitle F: Procedure and Administration. Chapter 76: Judicial Proceedings

Codificación normativa de EEUU (Estados Unidos) Legislación Federal estadounidense # Internal revenue code

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-CITE-

26 USC CHAPTER 76 - JUDICIAL PROCEEDINGS 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

-HEAD-

CHAPTER 76 - JUDICIAL PROCEEDINGS

-MISC1-

Subchapter Sec.(!1)

A. Civil actions by the United States 7401

B. Proceedings by Taxpayers and Third Parties 7421

C. The Tax Court 7441

D. Court review of Tax Court decisions 7481

E. Burden of proof 7491

AMENDMENTS

1998 - Pub. L. 105-206, title III, Sec. 3001(b), July 22, 1998,

112 Stat. 727, added item for subchapter E.

1976 - Pub. L. 94-455, title XIX, Sec. 1952(n)(4)(B), Oct. 4,

1976, 90 Stat. 1846, struck out item for subchapter E

"Miscellaneous provisions".

1966 - Pub. L. 89-719, title I, Sec. 110(d)(3), Nov. 2, 1966, 80

Stat. 1145, substituted "Taxpayers and Third Parties" for

"taxpayers" in item for subchapter B.

-SECREF-

CHAPTER REFERRED TO IN OTHER SECTIONS

This chapter is referred to in sections 7801, 7851 of this title.

-FOOTNOTE-

(!1) Section numbers editorially supplied.

-End-

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26 USC Subchapter A - Civil Actions by the United States 01/06/03

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TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter A - Civil Actions by the United States

-HEAD-

SUBCHAPTER A - CIVIL ACTIONS BY THE UNITED STATES

-MISC1-

Sec.

7401. Authorization.

7402. Jurisdiction of district courts.

7403. Action to enforce lien or to subject property to

payment of tax.

7404. Authority to bring civil action for estate taxes.

7405. Action for recovery of erroneous refunds.

7406. Disposition of judgments and moneys recovered.

7407. Action to enjoin income tax return preparers.

7408. Action to enjoin promoters of abusive tax shelters,

etc.

7409. Action to enjoin flagrant political expenditures of

section 501(c)(3) organizations.

7410. Cross references.

AMENDMENTS

1987 - Pub. L. 100-203, title X, Sec. 10713(a)(2), Dec. 22, 1987,

101 Stat. 1330-469, added item 7409 and redesignated former item

7409 as 7410.

1982 - Pub. L. 97-248, title III, Sec. 321(b), Sept. 3, 1982, 96

Stat. 612, added item 7408 and redesignated former item 7408 as

7409.

1976 - Pub. L. 94-455, title XII, Sec. 1203(i)(4), Oct. 4, 1976,

90 Stat. 1695, added item 7407 and redesignated former item 7407 as

7408.

-End-

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26 USC Sec. 7401 01/06/03

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TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter A - Civil Actions by the United States

-HEAD-

Sec. 7401. Authorization

-STATUTE-

No civil action for the collection or recovery of taxes, or of

any fine, penalty, or forfeiture, shall be commenced unless the

Secretary authorizes or sanctions the proceedings and the Attorney

General or his delegate directs that the action be commenced.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 873; Pub. L. 94-455, title XIX,

Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.)

-MISC1-

AMENDMENTS

1976 - Pub. L. 94-455 struck out "or his delegate" after

"Secretary".

-End-

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26 USC Sec. 7402 01/06/03

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TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter A - Civil Actions by the United States

-HEAD-

Sec. 7402. Jurisdiction of district courts

-STATUTE-

(a) To issue orders, processes, and judgments

The district courts of the United States at the instance of the

United States shall have such jurisdiction to make and issue in

civil actions, writs and orders of injunction, and of ne exeat

republica, orders appointing receivers, and such other orders and

processes, and to render such judgments and decrees as may be

necessary or appropriate for the enforcement of the internal

revenue laws. The remedies hereby provided are in addition to and

not exclusive of any and all other remedies of the United States in

such courts or otherwise to enforce such laws.

(b) To enforce summons

If any person is summoned under the internal revenue laws to

appear, to testify, or to produce books, papers, or other data, the

district court of the United States for the district in which such

person resides or may be found shall have jurisdiction by

appropriate process to compel such attendance, testimony, or

production of books, papers, or other data.

(c) For damages to United States officers or employees

Any officer or employee of the United States acting under

authority of this title, or any person acting under or by authority

of any such officer or employee, receiving any injury to his person

or property in the discharge of his duty shall be entitled to

maintain an action for damages therefor, in the district court of

the United States, in the district wherein the party doing the

injury may reside or shall be found.

[(d) Repealed. Pub. L. 92-310, title II, Sec. 230(d), June 6, 1972,

86 Stat. 209]

(e) To quiet title

The United States district courts shall have jurisdiction of any

action brought by the United States to quiet title to property if

the title claimed by the United States to such property was derived

from enforcement of a lien under this title.

(f) General jurisdiction

For general jurisdiction of the district courts of the United

States in civil actions involving internal revenue, see section

1340 of title 28 of the United States Code.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 873; Pub. L. 89-719, title I,

Sec. 107(a), Nov. 2, 1966, 80 Stat. 1140; Pub. L. 93-310, title II,

Sec. 230(d), June 6, 1972, 86 Stat. 209.)

-MISC1-

AMENDMENTS

1972 - Subsec. (d). Pub. L. 92-310 repealed subsec. (d) which

granted district courts jurisdiction of actions brought on official

bonds.

1966 - Subsecs. (e), (f). Pub. L. 89-719 added subsec. (e) and

redesignated former subsec. (e) as (f).

EFFECTIVE DATE OF 1966 AMENDMENT

Amendment by Pub. L. 89-719 applicable after Nov. 2, 1966,

regardless of when title or lien of United States arose or when

lien or interest of another person was acquired, with certain

exceptions, see section 114(a)-(c) of Pub. L. 89-719, set out as a

note under section 6323 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 7407, 7408, 7409, 7604 of

this title.

-End-

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26 USC Sec. 7403 01/06/03

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TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter A - Civil Actions by the United States

-HEAD-

Sec. 7403. Action to enforce lien or to subject property to payment

of tax

-STATUTE-

(a) Filing

In any case where there has been a refusal or neglect to pay any

tax, or to discharge any liability in respect thereof, whether or

not levy has been made, the Attorney General or his delegate, at

the request of the Secretary, may direct a civil action to be filed

in a district court of the United States to enforce the lien of the

United States under this title with respect to such tax or

liability or to subject any property, of whatever nature, of the

delinquent, or in which he has any right, title, or interest, to

the payment of such tax or liability. For purposes of the preceding

sentence, any acceleration of payment under section 6166(g) shall

be treated as a neglect to pay tax.

(b) Parties

All persons having liens upon or claiming any interest in the

property involved in such action shall be made parties thereto.

(c) Adjudication and decree

The court shall, after the parties have been duly notified of the

action, proceed to adjudicate all matters involved therein and

finally determine the merits of all claims to and liens upon the

property, and, in all cases where a claim or interest of the United

States therein is established, may decree a sale of such property,

by the proper officer of the court, and a distribution of the

proceeds of such sale according to the findings of the court in

respect to the interests of the parties and of the United States.

If the property is sold to satisfy a first lien held by the United

States, the United States may bid at the sale such sum, not

exceeding the amount of such lien with expenses of sale, as the

Secretary directs.

(d) Receivership

In any such proceeding, at the instance of the United States, the

court may appoint a receiver to enforce the lien, or, upon

certification by the Secretary during the pendency of such

proceedings that it is in the public interest, may appoint a

receiver with all the powers of a receiver in equity.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 874; Pub. L. 89-719, title I,

Sec. 107(b), Nov. 2, 1966, 80 Stat. 1140; Pub. L. 94-455, title

XIX, Sec. 1906(b)(13)(A), title XX, Sec. 2004(f)(2), Oct. 4, 1976,

90 Stat. 1834, 1872; Pub. L. 97-34, title IV, Sec. 422(e)(8), Aug.

13, 1981, 95 Stat. 316.)

-MISC1-

AMENDMENTS

1981 - Subsec. (a). Pub. L. 97-34 struck out "or 6166A(h)" after

"section 6166(g)".

1976 - Subsec. (a). Pub. L. 94-455, Secs. 1906(b)(13)(A),

2004(f)(2), struck out "or his delegate" after "Secretary" and

inserted provisions relating to the acceleration of payment under

section 6166(g) or 6166A(h).

Subsecs. (c), (d). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck

out "or his delegate" after "Secretary".

1966 - Subsec. (c). Pub. L. 89-719 inserted sentence permitting

the United States, if the property is sold to satisfy a first lien

held by the United States, to bid at the sale such sum, not more

than the amount of such lien with expenses of sale, as the

Secretary or his delegate directs.

EFFECTIVE DATE OF 1981 AMENDMENT

Amendment by Pub. L. 97-34 applicable to estates of decedents

dying after Dec. 31, 1981, see section 422(f)(1) of Pub. L. 97-34,

set out as a note under section 6166 of this title.

EFFECTIVE DATE OF 1966 AMENDMENT

Amendment by Pub. L. 89-719 applicable after Nov. 2, 1966,

regardless of when title or lien of United States arose or when

lien or interest of another person was acquired, with certain

exceptions, see section 114(a)-(c) of Pub. L. 89-719, set out as a

note under section 6323 of this title.

-End-

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26 USC Sec. 7404 01/06/03

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TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter A - Civil Actions by the United States

-HEAD-

Sec. 7404. Authority to bring civil action for estate taxes

-STATUTE-

If the estate tax imposed by chapter 11 is not paid on or before

the due date thereof, the Secretary shall proceed to collect the

tax under the provisions of general law; or appropriate proceedings

in the name of the United States may be commenced in any court of

the United States having jurisdiction to subject the property of

the decedent to be sold under the judgment or decree of the court.

From the proceeds of such sale the amount of the tax, together with

the costs and expenses of every description to be allowed by the

court, shall be first paid, and the balance shall be deposited

according to the order of the court, to be paid under its direction

to the person entitled thereto. This section insofar as it applies

to the collection of a deficiency shall be subject to the

provisions of sections 6213 and 6601.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 874; Pub. L. 94-455, title XIX,

Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.)

-MISC1-

AMENDMENTS

1976 - Pub. L. 94-455 struck out "or his delegate" after

"Secretary".

-End-

-CITE-

26 USC Sec. 7405 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter A - Civil Actions by the United States

-HEAD-

Sec. 7405. Action for recovery of erroneous refunds

-STATUTE-

(a) Refunds after limitation period

Any portion of a tax imposed by this title, refund of which is

erroneously made, within the meaning of section 6514, may be

recovered by civil action brought in the name of the United States.

(b) Refunds otherwise erroneous

Any portion of a tax imposed by this title which has been

erroneously refunded (if such refund would not be considered as

erroneous under section 6514) may be recovered by civil action

brought in the name of the United States.

(c) Interest

For provision relating to interest on erroneous refunds, see

section 6602.

(d) Periods of limitation

For periods of limitations on actions under this section, see

section 6532(b).

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 874.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 6514, 6532, 6602 of this

title.

-End-

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26 USC Sec. 7406 01/06/03

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TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter A - Civil Actions by the United States

-HEAD-

Sec. 7406. Disposition of judgments and moneys recovered

-STATUTE-

All judgments and moneys recovered or received for taxes, costs,

forfeitures, and penalties shall be paid to the Secretary as

collections of internal revenue taxes.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 875; Pub. L. 94-455, title XIX,

Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.)

-MISC1-

AMENDMENTS

1976 - Pub. L. 94-455 struck out "or his delegate" after

"Secretary".

-End-

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26 USC Sec. 7407 01/06/03

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TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter A - Civil Actions by the United States

-HEAD-

Sec. 7407. Action to enjoin income tax return preparers

-STATUTE-

(a) Authority to seek injunction

A civil action in the name of the United States to enjoin any

person who is an income tax return preparer from further engaging

in any conduct described in subsection (b) or from further action

as an income tax return preparer may be commenced at the request of

the Secretary. Any action under this section shall be brought in

the District Court of the United States for the district in which

the income tax preparer resides or has his principal place of

business or in which the taxpayer with respect to whose income tax

return the action is brought resides. The court may exercise its

jurisdiction over such action (as provided in section 7402(a))

separate and apart from any other action brought by the United

States against such income tax preparer or any taxpayer.

(b) Adjudication and decrees

In any action under subsection (a), if the court finds -

(1) that an income tax return preparer has -

(A) engaged in any conduct subject to penalty under section

6694 or 6695, or subject to any criminal penalty provided by

this title,

(B) misrepresented his eligibility to practice before the

Internal Revenue Service, or otherwise misrepresented his

experience or education as an income tax return preparer,

(C) guaranteed the payment of any tax refund or the allowance

of any tax credit, or

(D) engaged in any other fraudulent or deceptive conduct

which substantially interferes with the proper administration

of the Internal Revenue laws, and

(2) that injunctive relief is appropriate to prevent the

recurrence of such conduct,

the court may enjoin such person from further engaging in such

conduct. If the court finds that an income tax return preparer has

continually or repeatedly engaged in any conduct described in

subparagraphs (A) through (D) of this subsection and that an

injunction prohibiting such conduct would not be sufficient to

prevent such person's interference with the proper administration

of this title, the court may enjoin such person from acting as an

income tax return preparer.

-SOURCE-

(Added Pub. L. 94-455, title XII, Sec. 1203(g), Oct. 4, 1976, 90

Stat. 1693; amended Pub. L. 101-239, title VII, Sec. 7738(a), (b),

Dec. 19, 1989, 103 Stat. 2404.)

-MISC1-

PRIOR PROVISIONS

A prior section 7407 was renumbered section 7410 of this title.

AMENDMENTS

1989 - Subsec. (a). Pub. L. 101-239, Sec. 7738(b), substituted "A

civil" for "Except as provided in subsection (c), a civil".

Subsec. (c). Pub. L. 101-239, Sec. 7738(a), struck out subsec.

(c) relating to bonds to stay injunctions.

EFFECTIVE DATE OF 1989 AMENDMENT

Section 7738(c) of Pub. L. 101-239 provided that: "The amendments

made by this section [amending this section] shall apply to actions

commenced after December 31, 1989."

EFFECTIVE DATE

Section applicable to documents prepared after Dec. 31, 1976, see

section 1203(j) of Pub. L. 94-455, set out as an Effective Date of

1976 Amendment note under section 7701 of this title.

-End-

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26 USC Sec. 7408 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter A - Civil Actions by the United States

-HEAD-

Sec. 7408. Action to enjoin promoters of abusive tax shelters, etc.

-STATUTE-

(a) Authority to seek injunction

A civil action in the name of the United States to enjoin any

person from further engaging in conduct subject to penalty under

section 6700 (relating to penalty for promoting abusive tax

shelters, etc.) or section 6701 (relating to penalties for aiding

and abetting understatement of tax liability) may be commenced at

the request of the Secretary. Any action under this section shall

be brought in the district court of the United States for the

district in which such person resides, has his principal place of

business, or has engaged in conduct subject to penalty under

section 6700 or section 6701. The court may exercise its

jurisdiction over such action (as provided in section 7402(a))

separate and apart from any other action brought by the United

States against such person.

(b) Adjudication and decree

In any action under subsection (a), if the court finds -

(1) that the person has engaged in any conduct subject to

penalty under section 6700 (relating to penalty for promoting

abusive tax shelters, etc.) or section 6701 (relating to

penalties for aiding and abetting understatement of tax

liability), and

(2) that injunctive relief is appropriate to prevent recurrence

of such conduct,

the court may enjoin such person from engaging in such conduct or

in any other activity subject to penalty under section 6700 or

section 6701.

(c) Citizens and residents outside the United States

If any citizen or resident of the United States does not reside

in, and does not have his principal place of business in, any

United States judicial district, such citizen or resident shall be

treated for purposes of this section as residing in the District of

Columbia.

-SOURCE-

(Added Pub. L. 97-248, title III, Sec. 321(a), Sept. 3, 1982, 96

Stat. 612; amended Pub. L. 98-369, div. A, title I, Sec. 143(b),

July 18, 1984, 98 Stat. 682.)

-MISC1-

PRIOR PROVISIONS

A prior section 7408 was renumbered section 7410 of this title.

AMENDMENTS

1984 - Subsec. (a). Pub. L. 98-369, Sec. 143(b)(1), (2), inserted

"or section 6701 (relating to penalties for aiding and abetting

understatement of tax liability)" and inserted reference to section

6701 at end of second sentence.

Subsec. (b). Pub. L. 98-369, Sec. 143(b)(1), (3), inserted "or

section 6701 (relating to penalties for aiding and abetting

understatement of tax liability)," in par. (1) and inserted

reference to section 6701 at end.

EFFECTIVE DATE OF 1984 AMENDMENT

Amendment by Pub. L. 98-369 effective on day after July 18, 1984,

see section 143(c) of Pub. L. 98-369, set out as a note under

section 6700 of this title.

EFFECTIVE DATE

Section 321(c) of Pub. L. 97-248 provided that: "The amendments

made by this section [enacting this section] shall take effect on

the day after the date of the enactment of this Act [Sept. 3,

1982]."

-End-

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26 USC Sec. 7409 01/06/03

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TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter A - Civil Actions by the United States

-HEAD-

Sec. 7409. Action to enjoin flagrant political expenditures of

section 501(c)(3) organizations

-STATUTE-

(a) Authority to seek injunction

(1) In general

If the requirements of paragraph (2) are met, a civil action in

the name of the United States may be commenced at the request of

the Secretary to enjoin any section 501(c)(3) organization from

further making political expenditures and for such other relief

as may be appropriate to ensure that the assets of such

organization are preserved for charitable or other purposes

specified in section 501(c)(3). Any action under this section

shall be brought in the district court of the United States for

the district in which such organization has its principal place

of business or for any district in which it has made political

expenditures. The court may exercise its jurisdiction over such

action (as provided in section 7402(a)) separate and apart from

any other action brought by the United States against such

organization.

(2) Requirements

An action may be brought under subsection (a) only if -

(A) the Internal Revenue Service has notified the

organization of its intention to seek an injunction under this

section if the making of political expenditures does not

immediately cease, and

(B) the Commissioner of Internal Revenue has personally

determined that -

(i) such organization has flagrantly participated in, or

intervened in (including the publication or distribution of

statements), any political campaign on behalf of (or in

opposition to) any candidate for public office, and

(ii) injunctive relief is appropriate to prevent future

political expenditures.

(b) Adjudication and decree

In any action under subsection (a), if the court finds on the

basis of clear and convincing evidence that -

(1) such organization has flagrantly participated in, or

intervened in (including the publication or distribution of

statements), any political campaign on behalf of (or in

opposition to) any candidate for public office, and

(2) injunctive relief is appropriate to prevent future

political expenditures,

the court may enjoin such organization from making political

expenditures and may grant such other relief as may be appropriate

to ensure that the assets of such organization are preserved for

charitable or other purposes specified in section 501(c)(3).

(c) Definitions

For purposes of this section, the terms "section 501(c)(3)

organization" and "political expenditures" have the respective

meanings given to such terms by section 4955.

-SOURCE-

(Added Pub. L. 100-203, title X, Sec. 10713(a)(1), Dec. 22, 1987,

101 Stat. 1330-468.)

-MISC1-

PRIOR PROVISIONS

A prior section 7409 was renumbered section 7410 of this title.

-End-

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26 USC Sec. 7410 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter A - Civil Actions by the United States

-HEAD-

Sec. 7410. Cross references

-STATUTE-

(1) For provisions for collecting taxes in general, see

chapter 64.

(2) For venue in a civil action for the collection of any

tax, see section 1396 of Title 28 of the United States Code.

(3) For venue of a proceeding for the recovery of any fine,

penalty, or forfeiture, see section 1395 of Title 28 of the

United States Code.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 875, Sec. 7407; renumbered Sec.

7408, Pub. L. 94-455, title XII, Sec. 1203(g), Oct. 4, 1976, 90

Stat. 1693; renumbered Sec. 7409, Pub. L. 97-248, title III, Sec.

321(a), Sept. 3, 1982, 96 Stat. 612; renumbered Sec. 7410, Pub. L.

100-203, title X, Sec. 10713(a)(1), Dec. 22, 1987, 101 Stat.

1330-468.)

-End-

-CITE-

26 USC Subchapter B - Proceedings by Taxpayers and Third

Parties 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter B - Proceedings by Taxpayers and Third Parties

-HEAD-

SUBCHAPTER B - PROCEEDINGS BY TAXPAYERS AND THIRD PARTIES

-MISC1-

Sec.

7421. Prohibition of suits to restrain assessment or

collection.

7422. Civil actions for refund.

7423. Repayments to officers or employees.

7424. Intervention.

7425. Discharge of liens.

7426. Civil actions by persons other than taxpayers.

7427. Income tax return preparers.

7428. Declaratory judgments relating to status and

classification of organizations under section

501(c)(3), etc.

7429. Review of jeopardy levy or assessment procedures.

7430. Awarding of costs and certain fees.

7431. Civil damages for unauthorized inspection or

disclosure of returns and return information.

7432. Civil damages for failure to release lien.

7433. Civil damages for certain unauthorized collection

actions.

7434. Civil damages for fraudulent filing of information

returns.

7435. Civil damages for unauthorized enticement of

information disclosure.

7436. Proceedings for determination of employment status.

7437. Cross references.

AMENDMENTS

1997 - Pub. L. 105-35, Sec. 3(d)(5), Aug. 5, 1997, 111 Stat.

1106, inserted "inspection or" before "disclosure" in item 7431.

Pub. L. 105-34, title XIV, Sec. 1454(b)(4), Aug. 5, 1997, 111

Stat. 1057, added items 7436 and 7437 and struck out former item

7436 "Cross references".

1996 - Pub. L. 104-168, title VI, Sec. 601(b), title XII, Sec.

1203(b), July 30, 1996, 110 Stat. 1462, 1471, added items 7434 and

7435 and redesignated former item 7434 as 7436.

1988 - Pub. L. 100-647, title VI, Secs. 6237(e)(4), 6239(c),

6240(b), 6241(c), Nov. 10, 1988, 102 Stat. 3743, 3746-3748,

inserted "levy or" after "jeopardy" in item 7429, struck out

"court" after "Awarding of" in item 7430, added items 7432 and

7433, and redesignated former item 7432 as 7434.

1982 - Pub. L. 97-248, title II, Sec. 292(d)(1), title III, Sec.

357(b)(3), Sept. 3, 1982, 96 Stat. 574, 646, added items 7430 and

7431 and redesignated former item 7430 as 7432.

1976 - Pub. L. 94-455, title XII, Secs. 1203(b)(2)(B),

1204(c)(13), title XIII, Sec. 1306(b)(6), Oct. 4, 1976, 90 Stat.

1690, 1699, 1719, added items 7427 to 7429 and redesignated former

item 7427 as 7430.

1966 - Pub. L. 89-719, title I, Sec. 110(d)(1), (2), Nov. 2,

1966, 80 Stat. 1145, inserted "and Third Parties" in subchapter

heading, substituted "Intervention" for "Civil action to clear

title to property" in item 7424, added items 7425 and 7426, and

redesignated former item 7425 as 7427.

-SECREF-

SUBCHAPTER REFERRED TO IN OTHER SECTIONS

This subchapter is referred to in section 6103 of this title.

-End-

-CITE-

26 USC Sec. 7421 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter B - Proceedings by Taxpayers and Third Parties

-HEAD-

Sec. 7421. Prohibition of suits to restrain assessment or

collection

-STATUTE-

(a) Tax

Except as provided in sections 6015(e), 6212(a) and (c), 6213(a),

6225(b), 6246(b), 6330(e)(1), 6331(i), 6672(c), 6694(c), and

7426(a) and (b)(1), 7429(b), and 7436, no suit for the purpose 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.

(b) Liability of transferee or fiduciary

No suit shall be maintained in any court for the purpose of

restraining the assessment or collection (pursuant to the

provisions of chapter 71) of -

(1) the amount of the liability, at law or in equity, of a

transferee of property of a taxpayer in respect of any internal

revenue tax, or

(2) the amount of the liability of a fiduciary under section

3713(b) of title 31, United States Code (!1) in respect of any

such tax.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 876; Pub. L. 89-719, title I,

Sec. 110(c), Nov. 2, 1966, 80 Stat. 1144; Pub. L. 94-455, title

XII, Sec. 1204(c)(11), Oct. 4, 1976, 90 Stat. 1699; Pub. L. 95-628,

Sec. 9(b)(1), Nov. 10, 1978, 92 Stat. 3633; Pub. L. 97-258, Sec.

3(f)(13), Sept. 13, 1982, 96 Stat. 1065; Pub. L. 105-34, title XII,

Secs. 1222(b)(1), 1239(e)(3), title XIV, Sec. 1454(b)(2), Aug. 5,

1997, 111 Stat. 1019, 1028, 1057; Pub. L. 105-206, title III, Sec.

3201(e)(3), July 22, 1998, 112 Stat. 740; Pub. L. 105-277, div. J,

title IV, Sec. 4002(c)(1), (f), Oct. 21, 1998, 112 Stat. 2681-906,

2681-907; Pub. L. 106-554, Sec. 1(a)(7) [title III, Secs.

313(b)(2)(B), 319(24)], Dec. 21, 2000, 114 Stat. 2763, 2763A-642,

2763A-647.)

-MISC1-

AMENDMENTS

2000 - Subsec. (a). Pub. L. 106-554 inserted "6330(e)(1)," after

"6246(b)," and substituted "6672(c)" for "6672(b)".

1998 - Subsec. (a). Pub. L. 105-277 substituted "6015(e)" for

"6015(d)" and inserted "6331(i)," after "6246(b),".

Pub. L. 105-206 inserted "6015(d)," after "sections".

1997 - Subsec. (a). Pub. L. 105-34, Sec. 1454(b)(2), substituted

"7429(b), and 7436" for "and 7429(b)".

Pub. L. 105-34, Sec. 1239(e)(3), inserted "6225(b)," after

"6213(a),".

Pub. L. 105-34, Sec. 1222(b)(1), inserted "6246(b)," after

"6213(a),".

1982 - Subsec. (b)(2). Pub. L. 97-258 substituted "section

3713(b) of title 31, United States Code" for "section 3467 of the

Revised Statutes (31 U.S.C. 192)".

1978 - Subsec. (a). Pub. L. 95-628 inserted references to

sections 6672(b) and 6694(c).

1976 - Subsec. (a). Pub. L. 94-455 substituted "7426(a) and

(b)(1), and 7429(b)" for "and 7426(a) and (b)(1)".

1966 - Subsec. (a). Pub. L. 89-719 inserted reference to section

7426(a), (b)(1), and "by any person, whether or not such person is

the person against whom such tax was assessed".

EFFECTIVE DATE OF 1998 AMENDMENTS

Amendment by Pub. L. 105-277 effective as if included in the

provision of the Internal Revenue Service Restructuring and Reform

Act of 1998, Pub. L. 105-206, to which such amendment relates, see

section 4002(k) of Pub. L. 105-277, set out as a note under section

1 of this title.

Amendment by Pub. L. 105-206 applicable to any liability for tax

arising after July 22, 1998, and any liability for tax arising on

or before such date but remaining unpaid as of such date, see

section 3201(g)(1) of Pub. L. 105-206, set out as a note under

section 6015 of this title.

EFFECTIVE DATE OF 1997 AMENDMENT

Amendment by section 1222(b)(1) of Pub. L. 105-34 applicable to

partnership taxable years beginning after Dec. 31, 1997, see

section 1226 of Pub. L. 105-34, as amended, set out as a note under

section 6011 of this title.

Amendment by section 1239(e)(3) of Pub. L. 105-34 applicable to

partnership taxable years ending after Aug. 5, 1997, see section

1239(f) of Pub. L. 105-34, set out as a note under section 6225 of

this title.

Amendment by section 1454(b)(2) of Pub. L. 105-34, effective Aug.

5, 1997, see section 1454(c) of Pub. L. 105-34, set out as a note

under section 6511 of this title.

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-628 applicable with respect to penalties

assessed more than 60 days after Nov. 10, 1978, see section 9(c) of

Pub. L. 95-628, set out as a note under section 6672 of this title.

EFFECTIVE DATE OF 1976 AMENDMENT

Amendment by Pub. L. 94-455 applicable with respect to action

taken under section 6851, 6861, or 6862 of this title where notice

and demand takes place after Feb. 28, 1977, see section 1204(d) of

Pub. L. 94-455, as amended, set out as a note under section 6851 of

this title.

EFFECTIVE DATE OF 1966 AMENDMENT

Amendment by Pub. L. 89-719 applicable after Nov. 2, 1966,

regardless of when title or lien of United States arose or when

lien or interest of another person was acquired, with certain

exceptions, see section 114(a)-(c) of Pub. L. 89-719, set out as a

note under section 6323 of this title.

PROHIBITION ON REQUESTS TO TAXPAYERS TO GIVE UP RIGHTS TO BRING

ACTIONS

Pub. L. 105-206, title III, Sec. 3468, July 22, 1998, 112 Stat.

770, provided that:

"(a) Prohibition. - No officer or employee of the United States

may request a taxpayer to waive the taxpayer's right to bring a

civil action against the United States or any officer or employee

of the United States for any action taken in connection with the

internal revenue laws.

"(b) Exceptions. - Subsection (a) shall not apply in any case

where -

"(1) a taxpayer waives the right described in subsection (a)

knowingly and voluntarily; or

"(2) the request by the officer or employee is made in person

and the taxpayer's attorney or other federally authorized tax

practitioner (within the meaning of section 7525(a)(3)(A) of the

Internal Revenue Code of 1986) is present, or the request is made

in writing to the taxpayer's attorney or other representative."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 4961, 6015, 6207, 6213,

6246, 6330, 6331, 6672, 6694, 6703, 6904 of this title.

-FOOTNOTE-

(!1) So in original. Probably should be followed by a comma.

-End-

-CITE-

26 USC Sec. 7422 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter B - Proceedings by Taxpayers and Third Parties

-HEAD-

Sec. 7422. Civil actions for refund

-STATUTE-

(a) No suit prior to filing claim for refund

No suit or proceeding shall be maintained in any court for the

recovery of any internal revenue tax alleged to have been

erroneously or illegally assessed or collected, or of any penalty

claimed to have been collected without authority, or of any sum

alleged to have been excessive or in any manner wrongfully

collected, until a claim for refund or credit has been duly filed

with the Secretary, according to the provisions of law in that

regard, and the regulations of the Secretary established in

pursuance thereof.

(b) Protest or duress

Such suit or proceeding may be maintained whether or not such

tax, penalty, or sum has been paid under protest or duress.

(c) Suits against collection officer a bar

A suit against any officer or employee of the United States (or

former officer or employee) or his personal representative for the

recovery of any internal revenue tax alleged to have been

erroneously or illegally assessed or collected, or of any penalty

claimed to have been collected without authority, or of any sum

alleged to have been excessive or in any manner wrongfully

collected shall be treated as if the United States had been a party

to such suit in applying the doctrine of res judicata in all suits

in respect of any internal revenue tax, and in all proceedings in

the Tax Court and on review of decisions of the Tax Court.

(d) Credit treated as payment

The credit of an overpayment of any tax in satisfaction of any

tax liability shall, for the purpose of any suit for refund of such

tax liability so satisfied, be deemed to be a payment in respect of

such tax liability at the time such credit is allowed.

(e) Stay of proceedings

If the Secretary prior to the hearing of a suit brought by a

taxpayer in a district court or the United States Court of Federal

Claims for the recovery of any income tax, estate tax, gift tax, or

tax imposed by chapter 41, 42, 43, or 44 (or any penalty relating

to such taxes) mails to the taxpayer a notice that a deficiency has

been determined in respect of the tax which is the subject matter

of taxpayer's suit, the proceedings in taxpayer's suit shall be

stayed during the period of time in which the taxpayer may file a

petition with the Tax Court for a redetermination of the asserted

deficiency, and for 60 days thereafter. If the taxpayer files a

petition with the Tax Court, the district court or the United

States Court of Federal Claims, as the case may be, shall lose

jurisdiction of taxpayer's suit to whatever extent jurisdiction is

acquired by the Tax Court of the subject matter of taxpayer's suit

for refund. If the taxpayer does not file a petition with the Tax

Court for a redetermination of the asserted deficiency, the United

States may counterclaim in the taxpayer's suit, or intervene in the

event of a suit as described in subsection (c) (relating to suits

against officers or employees of the United States), within the

period of the stay of proceedings notwithstanding that the time for

such pleading may have otherwise expired. The taxpayer shall have

the burden of proof with respect to the issues raised by such

counterclaim or intervention of the United States except as to the

issue of whether the taxpayer has been guilty of fraud with intent

to evade tax. This subsection shall not apply to a suit by a

taxpayer which, prior to the date of enactment of this title, is

commenced, instituted, or pending in a district court or the United

States Court of Federal Claims for the recovery of any income tax,

estate tax, or gift tax (or any penalty relating to such taxes).

(f) Limitation on right of action for refund

(1) General rule

A suit or proceeding referred to in subsection (a) may be

maintained only against the United States and not against any

officer or employee of the United States (or former officer or

employee) or his personal representative. Such suit or proceeding

may be maintained against the United States notwithstanding the

provisions of section 2502 of title 28 of the United States Code

(relating to aliens' privilege to sue) and notwithstanding the

provisions of section 1502 of such title 28 (relating to certain

treaty cases).

(2) Misjoinder and change of venue

If a suit or proceeding brought in a United States district

court against an officer or employee of the United States (or

former officer or employee) or his personal representative is

improperly brought solely by virtue of paragraph (1), the court

shall order, upon such terms as are just, that the pleadings be

amended to substitute the United States as a party for such

officer or employee as of the time such action commenced, upon

proper service of process on the United States. Such suit or

proceeding shall upon request by the United States be transferred

to the district or division where it should have been brought if

such action initially had been brought against the United States.

(g) Special rules for certain excise taxes imposed by chapter 42 or

43

(1) Right to bring actions

(A) In general

With respect to any taxable event, payment of the full amount

of the first tier tax shall constitute sufficient payment in

order to maintain an action under this section with respect to

the second tier tax.

(B) Definitions

For purposes of subparagraph (A), the terms "taxable event",

"first tier tax", and "second tier tax" have the respective

meanings given to such terms by section 4963.

(2) Limitation on suit for refund

No suit may be maintained under this section for the credit or

refund of any tax imposed under section 4941, 4942, 4943, 4944,

4945, 4951, 4952, 4955, 4958, 4971, or 4975 with respect to any

act (or failure to act) giving rise to liability for tax under

such sections, unless no other suit has been maintained for

credit or refund of, and no petition has been filed in the Tax

Court with respect to a deficiency in, any other tax imposed by

such sections with respect to such act (or failure to act).

(3) Final determination of issues

For purposes of this section, any suit for the credit or refund

of any tax imposed under section 4941, 4942, 4943, 4944, 4945,

4951, 4952, 4955, 4958, 4971, or 4975 with respect to any act (or

failure to act) giving rise to liability for tax under such

sections, shall constitute a suit to determine all questions with

respect to any other tax imposed with respect to such act (or

failure to act) under such sections, and failure by the parties

to such suit to bring any such question before the Court shall

constitute a bar to such question.

(h) Special rule for actions with respect to partnership items

No action may be brought for a refund attributable to partnership

items (as defined in section 6231(a)(3)) except as provided in

section 6228(b) or section 6230(c).

(i) Special rule for actions with respect to tax shelter promoter

and understatement penalties

No action or proceeding may be brought in the United States Court

of Federal Claims for any refund or credit of a penalty imposed by

section 6700 (relating to penalty for promoting abusive tax

shelters, etc.) or section 6701 (relating to penalties for aiding

and abetting understatement of tax liability).

(j) Special rule for actions with respect to estates for which an

election under section 6166 is made

(1) In general

The district courts of the United States and the United States

Court of Federal Claims shall not fail to have jurisdiction over

any action brought by the representative of an estate to which

this subsection applies to determine the correct amount of the

estate tax liability of such estate (or for any refund with

respect thereto) solely because the full amount of such liability

has not been paid by reason of an election under section 6166

with respect to such estate.

(2) Estates to which subsection applies

This subsection shall apply to any estate if, as of the date

the action is filed -

(A) no portion of the installments payable under section 6166

have been accelerated;

(B) all such installments the due date for which is on or

before the date the action is filed have been paid;

(C) there is no case pending in the Tax Court with respect to

the tax imposed by section 2001 on the estate and, if a notice

of deficiency under section 6212 with respect to such tax has

been issued, the time for filing a petition with the Tax Court

with respect to such notice has expired; and

(D) no proceeding for declaratory judgment under section 7479

is pending.

(3) Prohibition on collection of disallowed liability

If the court redetermines under paragraph (1) the estate tax

liability of an estate, no part of such liability which is

disallowed by a decision of such court which has become final may

be collected by the Secretary, and amounts paid in excess of the

installments determined by the court as currently due and payable

shall be refunded.

(k) Cross references

(1) For provisions relating generally to claims for refund or

credit, see chapter 65 (relating to abatements, credit, and

refund) and chapter 66 (relating to limitations).

(2) For duty of United States attorneys to defend suits, see

section 507 of Title 28 of the United States Code.

(3) For jurisdiction of United States district courts, see

section 1346 of Title 28 of the United States Code.

(4) For payment by the Treasury of judgments against internal

revenue officers or employees, upon certificate of probable

cause, see section 2006 of Title 28 of the United States Code.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 876; Pub. L. 85-866, title I,

Sec. 78, Sept. 2, 1958, 72 Stat. 1662; Pub. L. 89-713, Sec. 3(a),

Nov. 2, 1966, 80 Stat. 1108; Pub. L. 91-172, title I, Sec. 101(i),

(j)(56), Dec. 30, 1969, 83 Stat. 525, 532; Pub. L. 92-178, title

III, Sec. 309(a), Dec. 10, 1971, 85 Stat. 525; Pub. L. 93-406,

title II, Sec. 1016(a)(26), Sept. 2, 1974, 88 Stat. 931; Pub. L.

94-455, title XIII, Sec. 1307(d)(2)(F)(viii), title XVI, Sec.

1605(b)(11), title XIX, Sec. 1906(a)(44), (b)(13)(A), Oct. 4, 1976,

90 Stat. 1728, 1755, 1830, 1834; Pub. L. 96-222, title I, Sec.

108(b)(1)(D)-(F), Apr. 1, 1980, 94 Stat. 226; Pub. L. 96-223, title

I, Sec. 101(f)(1)(J), Apr. 2, 1980, 94 Stat. 252; Pub. L. 96-596,

Sec. 2(c)(2), Dec. 24, 1980, 94 Stat. 3474; Pub. L. 97-164, title

I, Sec. 151, Apr. 2, 1982, 96 Stat. 46; Pub. L. 97-248, title IV,

Sec. 402(c)(11), Sept. 3, 1982, 96 Stat. 668; Pub. L. 98-369, div.

A, title VII, Sec. 714(g)(1), (p)(2)(H), July 18, 1984, 98 Stat.

961, 965; Pub. L. 99-514, title XVIII, Sec. 1899A(58), Oct. 22,

1986, 100 Stat. 2961; Pub. L. 100-203, title X, Sec. 10712(c)(5),

Dec. 22, 1987, 101 Stat. 1330-467; Pub. L. 100-418, title I, Sec.

1941(b)(2)(B)(x), Aug. 23, 1988, 102 Stat. 1323; Pub. L. 102-572,

title IX, Sec. 902(b)(1), Oct. 29, 1992, 106 Stat. 4516; Pub. L.

104-168, title XIII, Sec. 1311(c)(4), July 30, 1996, 110 Stat.

1478; Pub. L. 105-206, title III, Sec. 3104(a), July 22, 1998, 112

Stat. 731.)

-REFTEXT-

REFERENCES IN TEXT

The date of enactment of this title, referred to in subsec. (e),

is Aug. 16, 1954.

-MISC1-

AMENDMENTS

1998 - Subsecs. (j), (k). Pub. L. 105-206 added subsec. (j) and

redesignated former subsec. (j) as (k).

1996 - Subsec. (g)(2), (3). Pub. L. 104-168 inserted "4958,"

after "4955,".

1992 - Subsecs. (e), (i). Pub. L. 102-572 substituted "United

States Court of Federal Claims" for "United States Claims Court"

wherever appearing.

1988 - Subsec. (e). Pub. L. 100-418 substituted "or 44" for "44,

or 45".

1987 - Subsec. (g)(2), (3). Pub. L. 100-203 inserted "4955,"

after "4952,".

1986 - Subsec. (g)(1)(B). Pub. L. 99-514 substituted "section

4963" for "section 4962".

1984 - Subsec. (h). Pub. L. 98-369, Sec. 714(p)(2)(H),

substituted "section 6231(a)(3)" for "section 6131(a)(3)".

Subsecs. (i), (j). Pub. L. 98-369, Sec. 714(g)(1), added subsec.

(i) and redesignated former subsec. (i) as (j).

1982 - Subsec. (e). Pub. L. 97-164 substituted "United States

Claims Court" for "Court of Claims" wherever appearing.

Subsecs. (h), (i). Pub. L. 97-248 added subsec. (h) and

redesignated former subsec. (h) as (i).

1980 - Subsec. (e). Pub. L. 96-223 inserted reference to chapter

45.

Subsec. (g). Pub. L. 96-596 substituted in par. (1) provision

authorizing, with respect to any taxable event, payment of the full

amount of the first tier tax as constituting sufficient payment in

order to maintain an action under this section with respect to the

second tier tax and defining the terms "taxable event", "first tier

tax", and "second tier tax" as having the respective meanings given

to such terms by section 4962 of this title for provision

authorizing, with respect to any act or failure to act giving rise

to liability under sections 4941, 4942, 4943, 4944, 4945, 4951,

4952, 4971, or 4975 of this title, payment of the full amount of

tax imposed under specified subsections of those sections as

constituting sufficient payment in order to maintain an action

under this section with respect to such act or failure to act.

Pub. L. 96-222 substituted in pars. (1) to (3) "4944, 4945, 4951,

4952" for "4944, 4945" and in par. (1) "section 4945(a) (relating

to initial taxes on taxable expenditures), section 4951(a)

(relating to initial taxes on self dealing), 4952(a) (relating to

initial taxes on taxable expenditures)" for "section 4945(a)

(relating to initial taxes on taxable expenditures)" and "section

4945(b) (relating to additional taxes on taxable expenditures),

section 4951(b) (relating to additional taxes on self-dealing),

4952(b) (relating to additional taxes on taxable expenditures)" for

"section 4945(b) (relating to additional taxes on taxable

expenditures)".

1976 - Subsec. (a). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck

out "or his delegate" after "Secretary".

Subsec. (c). Pub. L. 94-455, Sec. 1906(a)(44), struck out

"instituted after June 15, 1942," after "res judicata in all suits"

and "where the petition to the Tax Court was filed after such date"

after "decisions of the Tax Court".

Subsec. (e). Pub. L. 94-455, Secs. 1307(d)(2)(F)(viii),

1605(b)(11), 1906(b)(13)(A), struck out "or his delegate" after

"Secretary" and substituted "chapter 41, 42," for "chapter 42" and

"43, or 44" for "or 43".

1974 - Subsec. (e). Pub. L. 93-406, Sec. 1016(a)(26)(A),

substituted "chapter 42 or 43" for "chapter 42".

Subsec. (g). Pub. L. 93-406, Sec. 1016(a)(26)(B)-(F), substituted

"chapter 42 or 43" for "chapter 42" in heading, substituted "4945,

4971, or 4975" for "or 4945", "section 4945(a) (relating to initial

taxes on taxable expenditures), 4971(a) (relating to initial tax on

failure to meet minimum funding standard), 4975(a) (relating to

initial tax on prohibited transactions)" for "section 4945(a)

(relating to initial taxes on taxable expenditures)", and "section

4945(b) (relating to additional taxes on taxable expenditures),

section 4971(b) (relating to additional tax on failure to meet

minimum funding standard), or section 4975(b) (relating to

additional tax on prohibited transactions)" for "or section 4945(b)

(relating to additional taxes on taxable expenditures)" in par.

(1), and substituted "4945, 4971, or 4975" for "or 4945" in pars.

(2) and (3).

1971 - Subsec. (f)(1). Pub. L. 92-178 authorized maintenance of

suit or proceeding against the United States notwithstanding

provisions of section 1502 of Title 28 (relating to certain treaty

cases).

1969 - Subsec. (e). Pub. L. 91-172, Sec. 101(j)(56), inserted

reference to chapter 42 taxes.

Subsecs. (g), (h). Pub. L. 91-172, Sec. 101(i), added subsec. (g)

and redesignated former subsec. (g) as (h).

1966 - Subsecs. (f), (g). Pub. L. 89-713 added subsec. (f) and

redesignated former subsec. (f) as (g).

1958 - Subsec. (f)(2). Pub. L. 85-866 struck out "district"

before "attorneys".

EFFECTIVE DATE OF 1998 AMENDMENT

Pub. L. 105-206, title III, Sec. 3104(c), July 22, 1998, 112

Stat. 732, provided that: "The amendments made by this section

[amending this section and section 7479 of this title] shall apply

to any claim for refund filed after the date of the enactment of

this Act [July 22, 1998]."

EFFECTIVE DATE OF 1996 AMENDMENT

Amendment by Pub. L. 104-168 applicable to excess benefit

transactions occurring on or after Sept. 14, 1995 and not

applicable to any benefit arising from a transaction pursuant to

any written contract which was binding on Sept. 13, 1995, and at

all times thereafter before such transaction occurred, see section

1311(d)(1), (2) of Pub. L. 104-168, set out as a note under section

4955 of this title.

EFFECTIVE DATE OF 1992 AMENDMENT

Amendment by Pub. L. 102-572 effective Oct. 29, 1992, see section

911 of Pub. L. 102-572, set out as a note under section 171 of

Title 28, Judiciary and Judicial Procedure.

EFFECTIVE DATE OF 1988 AMENDMENT

Amendment by Pub. L. 100-418 applicable to crude oil removed from

the premises on or after Aug. 23, 1988, see section 1941(c) of Pub.

L. 100-418, set out as a note under section 164 of this title.

EFFECTIVE DATE OF 1987 AMENDMENT

Amendment by Pub. L. 100-203 applicable to taxable years

beginning after Dec. 22, 1987, see section 10712(d) of Pub. L.

100-203, set out as an Effective Date note under section 4955 of

this title.

EFFECTIVE DATE OF 1984 AMENDMENT

Amendment by section 714(g)(1) of Pub. L. 98-369 applicable to

any claim for refund or credit filed after July 18, 1984, see

section 714(g)(4) of Pub. L. 98-369, set out as an Effective Date

note under section 1509 of Title 28, Judiciary and Judicial

Procedure.

Amendment by section 714(p)(2)(H) of Pub. L. 98-369 effective as

if included in the provision of the Tax Equity and Fiscal

Responsibility Act of 1982, Pub. L. 97-248, to which such amendment

relates, see section 715 of Pub. L. 98-369, set out as a note under

section 31 of this title.

EFFECTIVE DATE OF 1982 AMENDMENT

Amendment by Pub. L. 97-248 applicable to partnership taxable

years beginning after Sept. 3, 1982, with provision for the

applicability of the amendment to any partnership taxable year

ending after Sept. 3, 1982, if the partnership, each partner, and

each indirect partner requests such application and the Secretary

of the Treasury or his delegate consents to such application, see

section 407(a)(1), (3) of Pub. L. 97-248, set out as an Effective

Date note under section 6221 of this title.

Amendment by Pub. L. 97-164 effective Oct. 1, 1982, see section

402 of Pub. L. 97-164, set out as a note under section 171 of Title

28, Judiciary and Judicial Procedure.

EFFECTIVE DATE OF 1980 AMENDMENTS

For effective date of amendment by Pub. L. 96-596 with respect to

any first tier tax and to any second tier tax, see section 2(d) of

Pub. L. 96-596, set out as an Effective Date note under section

4961 of this title.

Amendment by Pub. L. 96-223 applicable to periods after Feb. 29,

1980, see section 101(i) of Pub. L. 96-223, set out as a note under

section 6161 of this title.

Amendment by Pub. L. 96-222 effective as if included in the

provisions of the Black Lung Benefits Revenue Act of 1977, Pub. L.

95-227, see section 108(b)(4) of Pub. L. 96-222, set out as a note

under section 192 of this title.

EFFECTIVE DATE OF 1976 AMENDMENT

Amendment by section 1307(d)(2)(F)(viii) of Pub. L. 94-455

effective on and after Oct. 4, 1976, see section 1307(e)(6) of Pub.

L. 94-455, set out as a note under section 501 of this title.

For effective date of amendment by section 1605(b)(11) of Pub. L.

94-455, see section 1608(d) of Pub. L. 94-455, set out as a note

under section 856 of this title.

Amendment by section 1906(a)(44), (b)(13)(A) of Pub. L. 94-455

effective on first day of first month which begins more than 90

days after Oct. 4, 1976, see section 1906(d)(1) of Pub. L. 94-455,

set out as a note under section 6013 of this title.

EFFECTIVE DATE OF 1974 AMENDMENT

Amendment by Pub. L. 93-406 applicable, except as otherwise

provided in section 1017(c) through (i) of Pub. L. 93-406, for plan

years beginning after Sept. 2, 1974, and in the case of plans in

existence on Jan. 1, 1974, amendment by Pub. L. 93-406 applicable

for plan years beginning after Dec. 31, 1975, see section 1017 of

Pub. L. 93-406, set out as an Effective Date; Transitional Rules

note under section 410 of this title.

EFFECTIVE DATE OF 1971 AMENDMENT

Section 309(b) of Pub. L. 92-178 provided that: "The amendment

made by subsection (a) [amending this section] shall apply to suits

or proceedings which are instituted after January 30, 1967."

EFFECTIVE DATE OF 1969 AMENDMENT

Amendment by Pub. L. 91-172 effective Jan. 1, 1970, see section

101(k)(1) of Pub. L. 91-172, set out as an Effective Date note

under section 4940 of this title.

EFFECTIVE DATE OF 1966 AMENDMENT

Section 3(d) of Pub. L. 89-713 provided that: "The amendments

made by subsections (a) and (b) [amending this section and section

2502 of Title 28, Judiciary and Judicial Procedure] shall apply to

suits brought against officers, employees, or personal

representatives referred to therein which are instituted 90 days or

more after the date of the enactment of this Act [Nov. 2, 1966].

The amendment made by subsection (c) [amending section 7482 of this

title] shall apply to all decisions of the Tax Court entered after

the date of enactment of this Act."

EFFECTIVE DATE OF 1958 AMENDMENT

Amendment by Pub. L. 85-866 as effective Aug. 17, 1954, see

section 1(c)(2) of Pub. L. 85-866, set out as a note under section

165 of this title.

PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989

For provisions directing that if any amendments made by subtitle

A or subtitle C of title XI [Secs. 1101-1147 and 1171-1177] or

title XVIII [Secs. 1800-1899A] of Pub. L. 99-514 require an

amendment to any plan, such plan amendment shall not be required to

be made before the first plan year beginning on or after Jan. 1,

1989, see section 1140 of Pub. L. 99-514, as amended, set out as a

note under section 401 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 4961, 6228, 6234, 6532,

7426 of this title; title 28 section 2502.

-End-

-CITE-

26 USC Sec. 7423 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter B - Proceedings by Taxpayers and Third Parties

-HEAD-

Sec. 7423. Repayments to officers or employees

-STATUTE-

The Secretary, subject to regulations prescribed by the

Secretary, is authorized to repay -

(1) Collections recovered

To any officer or employee of the United States the full amount

of such sums of money as may be recovered against him in any

court, for any internal revenue taxes collected by him, with the

cost and expense of suit; also

(2) Damages and costs

All damages and costs recovered against any officer or employee

of the United States in any suit brought against him by reason of

anything done in the due performance of his official duty under

this title.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 877; Pub. L. 94-455, title XIX,

Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.)

-MISC1-

AMENDMENTS

1976 - Pub. L. 94-455 struck out "or his delegate" after

"Secretary" in provisions preceding par. (1).

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in title 5 section 3111.

-End-

-CITE-

26 USC Sec. 7424 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter B - Proceedings by Taxpayers and Third Parties

-HEAD-

Sec. 7424. Intervention

-STATUTE-

If the United States is not a party to a civil action or suit,

the United States may intervene in such action or suit to assert

any lien arising under this title on the property which is the

subject of such action or suit. The provisions of section 2410 of

title 28 of the United States Code (except subsection (b)) and of

section 1444 of title 28 of the United States Code shall apply in

any case in which the United States intervenes as if the United

States had originally been named a defendant in such action or

suit. In any case in which the application of the United States to

intervene is denied, the adjudication in such civil action or suit

shall have no effect upon such lien.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 877; Pub. L. 89-719, title I,

Sec. 108, Nov. 2, 1966, 80 Stat. 1140.)

-MISC1-

AMENDMENTS

1966 - Pub. L. 89-719 substituted "Intervention" for "Civil

action to clear title to property" in section catchline and

substituted provisions, set out in a single paragraph, granting the

government authority to intervene in a court proceeding to assert

any lien arising under this title on property which is the subject

of a civil action or suit to which the government is not a party

with the same procedural rules to apply as where the government is

initially joined properly as a party and with the proceedings to

have no effect on the government's lien if the application to

intervene is denied, for provisions, formerly set out in three

subsections, setting out a procedure by which a person having a

lien upon or interest in property referred to in section 7403 could

file a civil action to clear title to the property and obtain an

adjudication of the matter involved in the same manner as in the

case of a civil action filed under section 7403.

EFFECTIVE DATE OF 1966 AMENDMENT

Amendment by Pub. L. 89-719 applicable after Nov. 2, 1966,

regardless of when the title or lien of the United States arose or

when the lien or interest of another person was acquired, with

certain exceptions, see section 114(a) to (c) of Pub. L. 89-719,

set out as a note under section 6323 of this title.

CIVIL ACTIONS TO CLEAR TITLE TO PROPERTY COMMENCED BEFORE NOV. 2,

1966

Section 114(d) of Pub. L. 89-719 provided that civil actions

commenced before Nov. 2, 1966, to clear title to property pursuant

to this section as in effect before Nov. 2, 1966, were to be

determined in accord with this section as in effect before Nov. 2,

1966.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in title 28 section 2409a.

-End-

-CITE-

26 USC Sec. 7425 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter B - Proceedings by Taxpayers and Third Parties

-HEAD-

Sec. 7425. Discharge of liens

-STATUTE-

(a) Judicial proceedings

If the United States is not joined as a party, a judgment in any

civil action or suit described in subsection (a) of section 2410 of

title 28 of the United States Code, or a judicial sale pursuant to

such a judgment, with respect to property on which the United

States has or claims a lien under the provisions of this title -

(1) shall be made subject to and without disturbing the lien of

the United States, if notice of such lien has been filed in the

place provided by law for such filing at the time such action or

suit is commenced, or

(2) shall have the same effect with respect to the discharge or

divestment of such lien of the United States as may be provided

with respect to such matters by the local law of the place where

such property is situated, if no notice of such lien has been

filed in the place provided by law for such filing at the time

such action or suit is commenced or if the law makes no provision

for such filing.

If a judicial sale of property pursuant to a judgment in any civil

action or suit to which the United States is not a party discharges

a lien of the United States arising under the provisions of this

title, the United States may claim, with the same priority as its

lien had against the property sold, the proceeds (exclusive of

costs) of such sale at any time before the distribution of such

proceeds is ordered.

(b) Other sales

Notwithstanding subsection (a) sale of property on which the

United States has or claims a lien, or a title derived from

enforcement of a lien, under the provisions of this title, made

pursuant to an instrument creating a lien on such property,

pursuant to a confession of judgment on the obligation secured by

such an instrument, or pursuant to a nonjudicial sale under a

statutory lien on such property -

(1) shall, except as otherwise provided, be made subject to and

without disturbing such lien or title, if notice of such lien was

filed or such title recorded in the place provided by law for

such filing or recording more than 30 days before such sale and

the United States is not given notice of such sale in the manner

prescribed in subsection (c)(1); or

(2) shall have the same effect with respect to the discharge or

divestment of such lien or such title of the United States, as

may be provided with respect to such matters by the local law of

the place where such property is situated, if -

(A) notice of such lien or such title was not filed or

recorded in the place provided by law for such filing more than

30 days before such sale,

(B) the law makes no provision for such filing, or

(C) notice of such sale is given in the manner prescribed in

subsection (c)(1).

(c) Special rules

(1) Notice of sale

Notice of a sale to which subsection (b) applies shall be given

(in accordance with regulations prescribed by the Secretary) in

writing, by registered or certified mail or by personal service,

not less than 25 days prior to such sale, to the Secretary.

(2) Consent to sale

Notwithstanding the notice requirement of subsection (b)(2)(C),

a sale described in subsection (b) of property shall discharge or

divest such property of the lien or title of the United States if

the United States consents to the sale of such property free of

such lien or title.

(3) Sale of perishable goods

Notwithstanding the notice requirement of subsection (b)(2)(C),

a sale described in subsection (b) of property liable to perish

or become greatly reduced in price or value by keeping, or which

cannot be kept without great expense, shall discharge or divest

such property of the lien or title of the United States if notice

of such sale is given (in accordance with regulations prescribed

by the Secretary) in writing, by registered or certified mail or

by personal service, to the Secretary before such sale. The

proceeds (exclusive of costs) of such sale shall be held as a

fund subject to the liens and claims of the United States, in the

same manner and with the same priority as such liens and claims

had with respect to the property sold, for not less than 30 days

after the date of such sale.

(4) Forfeitures of land sales contracts

For purposes of subsection (b), a sale of property includes any

forfeiture of a land sales contract.

(d) Redemption by United States

(1) Right to redeem

In the case of a sale of real property to which subsection (b)

applies to satisfy a lien prior to that of the United States, the

Secretary may redeem such property within the period of 120 days

from the date of such sale or the period allowable for redemption

under local law, whichever is longer.

(2) Amount to be paid

In any case in which the United States redeems real property

pursuant to paragraph (1), the amount to be paid for such

property shall be the amount prescribed by subsection (d) of

section 2410 of title 28 of the United States Code.

(3) Certificate of redemption

(A) In general

In any case in which real property is redeemed by the United

States pursuant to this subsection, the Secretary shall apply

to the officer designated by local law, if any, for the

documents necessary to evidence the fact of redemption and to

record title to such property in the name of the United States.

If no such officer is designated by local law or if such

officer fails to issue such documents, the Secretary shall

execute a certificate of redemption therefor.

(B) Filing

The Secretary shall, without delay, cause such documents or

certificate to be duly recorded in the proper registry of

deeds. If the State in which the real property redeemed by the

United States is situated has not by law designated an office

in which such certificate may be recorded, the Secretary shall

file such certificate in the office of the clerk of the United

States district court for the judicial district in which such

property is situated.

(C) Effect

A certificate of redemption executed by the Secretary shall

constitute prima facie evidence of the regularity of such

redemption and shall, when recorded, transfer to the United

States all the rights, title, and interest in and to such

property acquired by the person from whom the United States

redeems such property by virtue of the sale of such property.

-SOURCE-

(Added Pub. L. 89-719, title I, Sec. 109, Nov. 2, 1966, 80 Stat.

1141; amended Pub. L. 94-455, title XIX, Sec. 1906(b)(13)(A), Oct.

4, 1976, 90 Stat. 1834; Pub. L. 99-514, title XV, Sec. 1572(a),

Oct. 22, 1986, 100 Stat. 2765.)

-MISC1-

PRIOR PROVISIONS

A prior section 7425 was renumbered 7434 of this title.

AMENDMENTS

1986 - Subsec. (c)(4). Pub. L. 99-514 added par. (4).

1976 - Pub. L. 94-455 struck out "or his delegate" after

"Secretary" wherever appearing.

EFFECTIVE DATE OF 1986 AMENDMENT

Section 1572(b) of Pub. L. 99-514 provided that: "The amendment

made by subsection (a) [amending this section] shall apply to

forfeitures after the 30th day after the date of the enactment of

this Act [Oct. 22, 1986]."

EFFECTIVE DATE

Section applicable after Nov. 2, 1966, regardless of when title

or lien of United States arose or when lien or interest of another

person was acquired, with certain exceptions, see section

114(a)-(c) of Pub. L. 89-719, set out as an Effective Date of 1966

Amendment note under section 6323 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 7810 of this title; title

28 section 2409a.

-End-

-CITE-

26 USC Sec. 7426 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter B - Proceedings by Taxpayers and Third Parties

-HEAD-

Sec. 7426. Civil actions by persons other than taxpayers

-STATUTE-

(a) Actions permitted

(1) Wrongful levy

If a levy has been made on property or property has been sold

pursuant to a levy, and any person (other than the person against

whom is assessed the tax out of which such levy arose) who claims

an interest in or lien on such property and that such property

was wrongfully levied upon may bring a civil action against the

United States in a district court of the United States. Such

action may be brought without regard to whether such property has

been surrendered to or sold by the Secretary.

(2) Surplus proceed

If property has been sold pursuant to a levy, any person (other

than the person against whom is assessed the tax out of which

such levy arose) who claims an interest in or lien on such

property junior to that of the United States and to be legally

entitled to the surplus proceeds of such sale may bring a civil

action against the United States in a district court of the

United States.

(3) Substituted sale proceeds

If property has been sold pursuant to an agreement described in

section 6325(b)(3) (relating to substitution of proceeds of

sale), any person who claims to be legally entitled to all or any

part of the amount held as a fund pursuant to such agreement may

bring a civil action against the United States in a district

court of the United States.

(4) Substitution of value

If a certificate of discharge is issued to any person under

section 6325(b)(4) with respect to any property, such person may,

within 120 days after the day on which such certificate is

issued, bring a civil action against the United States in a

district court of the United States for a determination of

whether the value of the interest of the United States (if any)

in such property is less than the value determined by the

Secretary. No other action may be brought by such person for such

a determination.

(b) Adjudication

The district court shall have jurisdiction to grant only such of

the following forms of relief as may be appropriate in the

circumstances:

(1) Injunction

If a levy or sale would irreparably injure rights in property

which the court determines to be superior to rights of the United

States in such property, the court may grant an injunction to

prohibit the enforcement of such levy or to prohibit such sale.

(2) Recovery of property

If the court determines that such property has been wrongfully

levied upon, the court may -

(A) order the return of specific property if the United

States is in possession of such property;

(B) grant a judgment for the amount of money levied upon; or

(C) if such property was sold, grant a judgment for an amount

not exceeding the greater of -

(i) the amount received by the United States from the sale

of such property, or

(ii) the fair market value of such property immediately

before the levy.

For the purposes of subparagraph (C), if the property was

declared purchased by the United States at a sale pursuant to

section 6335(e) (relating to manner and conditions of sale), the

United States shall be treated as having received an amount equal

to the minimum price determined pursuant to such section or (if

larger) the amount received by the United States from the resale

of such property.

(3) Surplus proceeds

If the court determines that the interest or lien of any party

to an action under this section was transferred to the proceeds

of a sale of such property, the court may grant a judgment in an

amount equal to all or any part of the amount of the surplus

proceeds of such sale.

(4) Substituted sale proceeds

If the court determines that a party has an interest in or lien

on the amount held as a fund pursuant to an agreement described

in section 6325(b)(3) (relating to substitution of proceeds of

sale), the court may grant a judgment in an amount equal to all

or any part of the amount of such fund.

(5) Substitution of value

If the court determines that the Secretary's determination of

the value of the interest of the United States in the property

for purposes of section 6325(b)(4) exceeds the actual value of

such interest, the court shall grant a judgment ordering a refund

of the amount deposited, and a release of the bond, to the extent

that the aggregate of the amounts thereof exceeds such value

determined by the court.

(c) Validity of assessment

For purposes of an adjudication under this section, the

assessment of tax upon which the interest or lien of the United

States is based shall be conclusively presumed to be valid.

(d) Limitation on rights of action

No action may be maintained against any officer or employee of

the United States (or former officer or employee) or his personal

representative with respect to any acts for which an action could

be maintained under this section.

(e) Substitution of United States as party

If an action, which could be brought against the United States

under this section, is improperly brought against any officer or

employee of the United States (or former officer or employee) or

his personal representative, the court shall order, upon such terms

as are just, that the pleadings be amended to substitute the United

States as a party for such officer or employee as of the time such

action was commenced upon proper service of process on the United

States.

(f) Provision inapplicable

The provisions of section 7422(a) (relating to prohibition of

suit prior to filing claim for refund) shall not apply to actions

under this section.

(g) Interest

Interest shall be allowed at the overpayment rate established

under section 6621 -

(1) In the case of a judgment pursuant to subsection (b)(2)(B),

from the date the Secretary receives the money wrongfully levied

upon to the date of payment of such judgment;

(2) in the case of a judgment pursuant to subsection (b)(2)(C),

from the date of the sale of the property wrongfully levied upon

to the date of payment of such judgment; and

(3) in the case of a judgment pursuant to subsection (b)(5)

which orders a refund of any amount, from the date the Secretary

received such amount to the date of payment of such judgment.

(h) Recovery of damages permitted in certain cases

(1) In general

Notwithstanding subsection (b), if, in any action brought under

this section, there is a finding that any officer or employee of

the Internal Revenue Service recklessly or intentionally, or by

reason of negligence, disregarded any provision of this title the

defendant shall be liable to the plaintiff in an amount equal to

the lesser of $1,000,000 ($100,000 in the case of negligence) or

the sum of -

(A) actual, direct economic damages sustained by the

plaintiff as a proximate result of the reckless or intentional

or negligent disregard of any provision of this title by the

officer or employee (reduced by any amount of such damages

awarded under subsection (b)); and

(B) the costs of the action.

(2) Requirement that administrative remedies be exhausted;

mitigation; period

The rules of section 7433(d) shall apply for purposes of this

subsection.

(3) Payment authority

Claims pursuant to this section shall be payable out of funds

appropriated under section 1304 of title 31, United States Code.

(i) Cross reference

For period of limitation, see section 6532(c).

-SOURCE-

(Added Pub. L. 89-719, title I, Sec. 110(a), Nov. 2, 1966, 80 Stat.

1142; amended Pub. L. 93-625, Sec. 7(a)(2)(E), Jan. 3, 1975, 88

Stat. 2115; Pub. L. 94-455, title XIX, Sec. 1906(b)(13)(A), Oct. 4,

1976, 90 Stat. 1834; Pub. L. 97-248, title III, Sec. 350(a), Sept.

3, 1982, 96 Stat. 639; Pub. L. 99-514, title XV, Sec. 1511(c)(16),

Oct. 22, 1986, 100 Stat. 2745; Pub. L. 105-206, title III, Secs.

3102(b), 3106(b)(1), (2), July 22, 1998, 112 Stat. 730, 733.)

-MISC1-

AMENDMENTS

1998 - Subsec. (a)(4). Pub. L. 105-206, Sec. 3106(b)(1), added

par. (4).

Subsec. (b)(5). Pub. L. 105-206, Sec. 3106(b)(2)(A), added par.

(5).

Subsec. (g)(3). Pub. L. 105-206, Sec. 3106(b)(2)(B), added par.

(3).

Subsecs. (h), (i). Pub. L. 105-206, Sec. 3102(b), added subsec.

(h) and redesignated former subsec. (h) as (i).

1986 - Subsec. (g). Pub. L. 99-514 substituted "the overpayment

rate established under section 6621" for "an annual rate

established under section 6621".

1982 - Subsec. (b)(2)(C). Pub. L. 97-248 inserted "if such

property was sold," before "grant a judgment" and "the greater of -

" after "not exceeding", redesignated remaining provisions as cl.

(i), and added cl. (ii).

1976 - Pub. L. 94-455 struck out "or his delegate" after

"Secretary" wherever appearing.

1975 - Subsec. (g). Pub. L. 93-625 substituted "an annual rate

established under section 6621" for "the rate of 6 percent per

annum".

EFFECTIVE DATE OF 1998 AMENDMENT

Pub. L. 105-206, title III, Sec. 3102(d), July 22, 1998, 112

Stat. 731, provided that: "The amendments made by this section

[amending this section and section 7433 of this title] shall apply

to actions of officers or employees of the Internal Revenue Service

after the date of the enactment of this Act [July 22, 1998]."

Amendment by section 3106(b)(1), (2) of Pub. L. 105-206 effective

July 22, 1998, see section 3106(c) of Pub. L. 105-206, set out as a

note under section 6325 of this title.

EFFECTIVE DATE OF 1986 AMENDMENT

Amendment by Pub. L. 99-514 applicable for purposes of

determining interest for periods after Dec. 31, 1986, see section

1511(d) of Pub. L. 99-514, set out as a note under section 47 of

this title.

EFFECTIVE DATE OF 1982 AMENDMENT

Section 350(b) of Pub. L. 97-248 provided that: "The amendment

made by subsection (a) [amending this section] shall apply with

respect to levies made after December 31, 1982."

EFFECTIVE DATE OF 1975 AMENDMENT

Amendment by Pub. L. 93-625 effective July 1, 1975, and

applicable to amounts outstanding on such date or arising

thereafter, see section 7(e) of Pub. L. 93-625, set out as an

Effective Date note under section 6621 of this title.

EFFECTIVE DATE

Section applicable after Nov. 2, 1966, regardless of when title

or lien of United States arose or when lien or interest of another

person was acquired, except in a case in which a lien or title

derived from enforcement of a lien held by United States has been

enforced by a civil action or suit which has become final by

judgment, sale, or agreement before Nov. 2, 1966, or in a case in

which section would impair a priority held by any person other than

United States holding a lien or interest prior to Nov. 2, 1966,

operate to increase liability of such person, or shorten time of

bringing suit with respect to transactions occurring before Nov. 2,

1966, see section 114(a)-(c) of Pub. L. 89-719, set out as

Effective Date of 1966 Amendments note under section 6323 of this

title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 6325, 6503, 6532, 7421 of

this title; title 28 sections 1346, 2409a.

-End-

-CITE-

26 USC Sec. 7427 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter B - Proceedings by Taxpayers and Third Parties

-HEAD-

Sec. 7427. Income tax return preparers

-STATUTE-

In any proceeding involving the issue of whether or not an income

tax return preparer has willfully attempted in any manner to

understate the liability for tax (within the meaning of section

6694(b)), the burden of proof in respect to such issue shall be

upon the Secretary.

-SOURCE-

(Added Pub. L. 94-455, title XII, Sec. 1203(b)(2)(A), Oct. 4, 1976,

90 Stat. 1690.)

-MISC1-

PRIOR PROVISIONS

A prior section 7427 was renumbered 7437 of this title.

-End-

-CITE-

26 USC Sec. 7428 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter B - Proceedings by Taxpayers and Third Parties

-HEAD-

Sec. 7428. Declaratory judgments relating to status and

classification of organizations under section 501(c)(3), etc.

-STATUTE-

(a) Creation of remedy

In a case of actual controversy involving -

(1) a determination by the Secretary -

(A) with respect to the initial qualification or continuing

qualification of an organization as an organization described

in section 501(c)(3) which is exempt from tax under section

501(a) or as an organization described in section 170(c)(2),

(B) with respect to the initial classification or continuing

classification of an organization as a private foundation (as

defined in section 509(a)), or

(C) with respect to the initial classification or continuing

classification of an organization as a private operating

foundation (as defined in section 4942(j)(3)), or

(2) a failure by the Secretary to make a determination with

respect to an issue referred to in paragraph (1),

upon the filing of an appropriate pleading, the United States Tax

Court, the United States Court of Federal Claims, or the district

court of the United States for the District of Columbia may make a

declaration with respect to such initial qualification or

continuing qualification or with respect to such initial

classification or continuing classification. Any such declaration

shall have the force and effect of a decision of the Tax Court or a

final judgment or decree of the district court or the Court of

Federal Claims, as the case may be, and shall be reviewable as

such. For purposes of this section, a determination with respect to

a continuing qualification or continuing classification includes

any revocation of or other change in a qualification or

classification.

(b) Limitations

(1) Petitioner

A pleading may be filed under this section only by the

organization the qualification or classification of which is at

issue.

(2) Exhaustion of administrative remedies

A declaratory judgment or decree under this section shall not

be issued in any proceeding unless the Tax Court, the Court of

Federal Claims, or the district court of the United States for

the District of Columbia determines that the organization

involved has exhausted administrative remedies available to it

within the Internal Revenue Service. An organization requesting

the determination of an issue referred to in subsection (a)(1)

shall be deemed to have exhausted its administrative remedies

with respect to a failure by the Secretary to make a

determination with respect to such issue at the expiration of 270

days after the date on which the request for such determination

was made if the organization has taken, in a timely manner, all

reasonable steps to secure such determination.

(3) Time for bringing action

If the Secretary sends by certified or registered mail notice

of his determination with respect to an issue referred to in

subsection (a)(1) to the organization referred to in paragraph

(1), no proceeding may be initiated under this section by such

organization unless the pleading is filed before the 91st day

after the date of such mailing.

(c) Validation of certain contributions made during pendency of

proceedings

(1) In general

If -

(A) the issue referred to in subsection (a)(1) involves the

revocation of a determination that the organization is

described in section 170(c)(2),

(B) a proceeding under this section is initiated within the

time provided by subsection (b)(3), and

(C) either -

(i) a decision of the Tax Court has become final (within

the meaning of section 7481), or

(ii) a judgment of the district court of the United States

for the District of Columbia has been entered, or

(iii) a judgment of the Court of Federal Claims, has been

entered,

and such decision or judgment, as the case may be, determines

that the organization was not described in section 170(c)(2),

then, notwithstanding such decision or judgment, such

organization shall be treated as having been described in section

170(c)(2) for purposes of section 170 for the period beginning on

the date on which the notice of the revocation was published and

ending on the date on which the court first determined in such

proceeding that the organization was not described in section

170(c)(2).

(2) Limitation

Paragraph (1) shall apply only -

(A) with respect to individuals, and only to the extent that

the aggregate of the contributions made by any individual to or

for the use of the organization during the period specified in

paragraph (1) does not exceed $1,000 (for this purpose treating

a husband and wife as one contributor), and

(B) with respect to organizations described in section

170(c)(2) which are exempt from tax under section 501(a) (for

this purpose excluding any such organization with respect to

which there is pending a proceeding to revoke the determination

under section 170(c)(2)).

(3) Exception

This subsection shall not apply to any individual who was

responsible, in whole or in part, for the activities (or failures

to act) on the part of the organization which were the basis for

the revocation.

(d) Subpoena power for district court for District of Columbia

In any action brought under this section in the district court of

the United States for the District of Columbia, a subpoena

requiring the attendance of a witness at a trial or hearing may be

served at any place in the United States.

-SOURCE-

(Added Pub. L. 94-455, title XIII, Sec. 1306(a), Oct. 4, 1976, 90

Stat. 1717; amended Pub. L. 95-600, title VII, Sec. 701(dd)(2),

Nov. 6, 1978, 92 Stat. 2924; Pub. L. 97-164, title I, Sec. 152,

Apr. 2, 1982, 96 Stat. 46; Pub. L. 98-369, div. A, title X, Sec.

1033(b), July 18, 1984, 98 Stat. 1039; Pub. L. 102-572, title IX,

Sec. 902(b), Oct. 29, 1992, 106 Stat. 4516.)

-MISC1-

PRIOR PROVISIONS

A prior section 7428 was renumbered 7437 of this title.

AMENDMENTS

1992 - Subsec. (a). Pub. L. 102-572 substituted "United States

Court of Federal Claims" for "United States Claims Court" and

"Court of Federal Claims" for "Claims Court" in concluding

provisions.

Subsecs. (b)(2), (c)(1)(C)(iii). Pub. L. 102-572, Sec. 902(b)(2),

substituted "Court of Federal Claims" for "Claims Court".

1984 - Subsec. (d). Pub. L. 98-369 added subsec. (d).

1982 - Subsecs. (a), (b)(2), (c)(1)(C)(iii). Pub. L. 97-164

substituted "Claims Court" for "Court of Claims".

1978 - Subsec. (a). Pub. L. 95-600 inserted provision relating to

change in qualification or classification.

EFFECTIVE DATE OF 1992 AMENDMENT

Amendment by Pub. L. 102-572 effective Oct. 29, 1992, see section

911 of Pub. L. 102-572, set out as a note under section 171 of

Title 28, Judiciary and Judicial Procedure.

EFFECTIVE DATE OF 1984 AMENDMENT

Amendment by Pub. L. 98-369 applicable with respect to inquiries

and examinations beginning after Dec. 31, 1984, see section 1033(d)

of Pub. L. 98-369, set out as an Effective Date note under section

7611 of this title.

EFFECTIVE DATE OF 1982 AMENDMENT

Amendment by Pub. L. 97-164 effective Oct. 1, 1982, see section

402 of Pub. L. 97-164, set out as a note under section 171 of Title

28, Judiciary and Judicial Procedure.

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-600 effective as if included in this

section at the time section was added to this title, see section

701(dd)(3) of Pub. L. 95-600, set out as a note under section 7476

of this title.

EFFECTIVE DATE

Section 1306(c) of Pub. L. 94-455 provided that: "The amendments

made by this section [enacting this section and amending sections

7451, 7459, 7470, and 7482 of this title, enacting section 1507 of

Title 28, Judiciary and Judicial Procedure, and amending sections

1346 and 2201 of Title 28] shall apply with respect to pleadings

filed with the United States Tax Court, the district court of the

United States for the District of Columbia, or the United States

Court of Claims more than 6 months after the date of the enactment

of this Act [Oct. 4, 1976] but only with respect to determinations

(or requests for determinations) made after January 1, 1976."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 7451, 7459, 7482, 7611 of

this title; title 28 sections 1346, 1507, 2201.

-End-

-CITE-

26 USC Sec. 7429 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter B - Proceedings by Taxpayers and Third Parties

-HEAD-

Sec. 7429. Review of jeopardy levy or assessment procedures

-STATUTE-

(a) Administrative review

(1) Administrative review

(A) Prior approval required

No assessment may be made under section 6851(a), 6852(a),

6861(a), or 6862, and no levy may be made under section 6331(a)

less than 30 days after notice and demand for payment is made,

unless the Chief Counsel for the Internal Revenue Service (or

such Counsel's delegate) personally approves (in writing) such

assessment or levy.

(B) Information to taxpayer

Within 5 days after the day on which such an assessment or

levy is made, the Secretary shall provide the taxpayer with a

written statement of the information upon which the Secretary

relied in making such assessment or levy.

(2) Request for review

Within 30 days after the day on which the taxpayer is furnished

the written statement described in paragraph (1), or within 30

days after the last day of the period within which such statement

is required to be furnished, the taxpayer may request the

Secretary to review the action taken.

(3) Redetermination by Secretary

After a request for review is made under paragraph (2), the

Secretary shall determine -

(A) whether or not -

(i) the making of the assessment under section 6851, 6861,

or 6862, as the case may be, is reasonable under the

circumstances, and

(ii) the amount so assessed or demanded as a result of the

action taken under section 6851, 6861, or 6862 is appropriate

under the circumstances, or

(B) whether or not the levy described in subsection (a)(1) is

reasonable under the circumstances.

(b) Judicial review

(1) Proceedings permitted

Within 90 days after the earlier of -

(A) the day the Secretary notifies the taxpayer of the

Secretary's determination described in subsection (a)(3), or

(B) the 16th day after the request described in subsection

(a)(2) was made,

the taxpayer may bring a civil action against the United States

for a determination under this subsection in the court with

jurisdiction determined under paragraph (2).

(2) Jurisdiction for determination

(A) In general

Except as provided in subparagraph (B), the district courts

of the United States shall have exclusive jurisdiction over any

civil action for a determination under this subsection.

(B) Tax Court

If a petition for a redetermination of a deficiency under

section 6213(a) has been timely filed with the Tax Court before

the making of an assessment or levy that is subject to the

review procedures of this section, and 1 or more of the taxes

and taxable periods before the Tax Court because of such

petition is also included in the written statement that is

provided to the taxpayer under subsection (a), then the Tax

Court also shall have jurisdiction over any civil action for a

determination under this subsection with respect to all the

taxes and taxable periods included in such written statement.

(3) Determination by court

Within 20 days after a proceeding is commenced under paragraph

(1), the court shall determine -

(A) whether or not -

(i) the making of the assessment under section 6851, 6861,

or 6862, as the case may be, is reasonable under the

circumstances, and

(ii) the amount so assessed or demanded as a result of the

action taken under section 6851, 6861, or 6862 is appropriate

under the circumstances, or

(B) whether or not the levy described in subsection (a)(1) is

reasonable under the circumstances.

If the court determines that proper service was not made on the

United States or on the Secretary, as may be appropriate, within

5 days after the date of the commencement of the proceeding, then

the running of the 20-day period set forth in the preceding

sentence shall not begin before the day on which proper service

was made on the United States or on the Secretary, as may be

appropriate.

(4) Order of court

If the court determines that the making of such levy is

unreasonable, that the making of such assessment is unreasonable,

or that the amount assessed or demanded is inappropriate, then

the court may order the Secretary to release such levy, to abate

such assessment, to redetermine (in whole or in part) the amount

assessed or demanded, or to take such other action as the court

finds appropriate.

(c) Extension of 20-day period where taxpayer so requests

If the taxpayer requests an extension of the 20-day period set

forth in subsection (b)(2) and establishes reasonable grounds why

such extension should be granted, the court may grant an extension

of not more than 40 additional days.

(d) Computation of days

For purposes of this section, Saturday, Sunday, or a legal

holiday in the District of Columbia shall not be counted as the

last day of any period.

(e) Venue

(1) District court

A civil action in a district court under subsection (b) shall

be commenced only in the judicial district described in section

1402(a)(1) or (2) of title 28, United States Code.

(2) Transfer of actions

If a civil action is filed under subsection (b) with the Tax

Court and such court finds that there is want of jurisdiction

because of the jurisdiction provisions of subsection (b)(2), then

the Tax Court shall, if such court determines it is in the

interest of justice, transfer the civil action to the district

court in which the action could have been brought at the time

such action was filed. Any civil action so transferred shall

proceed as if such action had been filed in the district court to

which such action is transferred on the date on which such action

was actually filed in the Tax Court from which such action is

transferred.

(f) Finality of determination

Any determination made by a court under this section shall be

final and conclusive and shall not be reviewed by any other court.

(g) Burden of proof

(1) Reasonableness of levy, termination, or jeopardy assessment

In a proceeding under subsection (b) involving the issue of

whether the making of a levy described in subsection (a)(1) or

the making of an assessment under section 6851, 6852, 6861, or

6862 is reasonable under the circumstances, the burden of proof

in respect to such issue shall be upon the Secretary.

(2) Reasonableness of amount of assessment

In a proceeding under subsection (b) involving the issue of

whether an amount assessed or demanded as a result of action

taken under section 6851, 6852, 6861, or 6862 is appropriate

under the circumstances, the Secretary shall provide a written

statement which contains any information with respect to which

his determination of the amount assessed was based, but the

burden of proof in respect of such issue shall be upon the

taxpayer.

-SOURCE-

(Added Pub. L. 94-455, title XII, Sec. 1204(a), Oct. 4, 1976, 90

Stat. 1695; amended Pub. L. 98-369, div. A, title IV, Sec. 446(a),

July 18, 1984, 98 Stat. 817; Pub. L. 100-203, title X, Sec.

10713(b)(2)(F), Dec. 22, 1987, 101 Stat. 1330-470; Pub. L. 100-647,

title VI, Sec. 6237(a)-(e)(3), Nov. 10, 1988, 102 Stat. 3741-3743;

Pub. L. 105-206, title III, Sec. 3434(a), July 22, 1998, 112 Stat.

760.)

-MISC1-

AMENDMENTS

1998 - Subsec. (a)(1). Pub. L. 105-206 substituted

"Administrative review" for "Information to taxpayer" in heading

and amended text of par. (1) generally. Prior to amendment, text

read as follows: "Within 5 days after the day on which an

assessment is made under section 6851(a), 6852(a), 6861(a), or

6862, or levy is made under section 6331(a) less than 30 days after

notice and demand for payment is made under section 6331(a), the

Secretary shall provide the taxpayer with a written statement of

the information upon which the Secretary relies in making such

assessment or levy."

1988 - Pub. L. 100-647, Sec. 6237(e)(3), inserted "levy or" after

"jeopardy" in section catchline.

Subsec. (a)(1). Pub. L. 100-647, Sec. 6237(a), inserted "or levy

is made under section 6331(a) less than 30 days after notice and

demand for payment is made under section 6331(a)," after "6862,"

and "or levy" after "such assessment".

Subsec. (a)(3). Pub. L. 100-647, Sec. 6237(b), amended par. (3)

generally. Prior to amendment, par. (3) read as follows: "After a

request for review is made under paragraph (2), the Secretary shall

determine whether or not -

"(A) the making of the assessment under section 6851, 6852,

6861, or 6862, as the case may be, is reasonable under the

circumstances, and

"(B) the amount so assessed or demanded as a result of the

action taken under section 6851, 6852, 6861, or 6862 is

appropriate under the circumstances."

Subsec. (b). Pub. L. 100-647, Sec. 6237(c), amended subsec. (b)

generally, substituting provisions of pars. (1) to (4) for

provisions of former pars. (1) to (3) relating to actions

permitted, determination by district court, and order of district

court.

Subsec. (c). Pub. L. 100-647, Sec. 6237(e)(1), struck out

"district" before "court".

Subsec. (e). Pub. L. 100-647, Sec. 6237(d), amended subsec. (e)

generally. Prior to amendment, subsec. (e) read as follows: "A

civil action under subsection (b) shall be commenced only in the

judicial district described in section 1402(a)(1) or (2) of title

28, United States Code."

Subsec. (f). Pub. L. 100-647, Sec. 6237(e)(1), struck out

"district" after "made by a".

Subsec. (g)(1). Pub. L. 100-647, Sec. 6237(e)(2), in heading

substituted "levy, termination," for "termination" and in text

substituted "a proceeding" for "an action" and inserted "the making

of a levy described in subsection (a)(1) or" after "whether".

Subsec. (g)(2). Pub. L. 100-647, Sec. 6237(e)(2)(C), substituted

"a proceeding" for "an action".

1987 - Subsec. (a)(1). Pub. L. 100-203, Sec. 10713(b)(2)(F)(i),

substituted "6851(a), 6852(a)" for "6851(a),".

Subsecs. (a)(3)(A), (B), (b)(2)(A), (B), (g)(1), (2). Pub. L.

100-203, Sec. 10713(b)(2)(F)(ii), substituted "6851, 6852," for

"6851," wherever appearing.

1984 - Subsec. (b)(2). Pub. L. 98-369 inserted provision that if

the court determines that proper service was not made on the United

States within 5 days after the date of the commencement of the

action, the running of the 20-day period shall not begin before the

day on which proper service was made on the United States.

EFFECTIVE DATE OF 1998 AMENDMENT

Pub. L. 105-206, title III, Sec. 3434(b), July 22, 1998, 112

Stat. 760, provided that: "The amendment made by this section

[amending this section] shall apply to taxes assessed and levies

made after the date of the enactment of this Act [July 22, 1998]."

EFFECTIVE DATE OF 1988 AMENDMENT

Section 6237(f) of Pub. L. 100-647 provided that: "The amendments

made by this section [amending this section] shall apply to

jeopardy levies issued and assessments made on or after July 1,

1989."

EFFECTIVE DATE OF 1984 AMENDMENT

Section 446(b) of Pub. L. 98-369 provided that: "The amendment

made by subsection (a) [amending this section] shall apply to

actions commenced after the date of the enactment of this Act [July

18, 1984]."

EFFECTIVE DATE

Section applicable with respect to action taken under section

6851, 6861, or 6862 of this title where notice and demand takes

place after Feb. 28, 1977, see section 1204(d) of Pub. L. 94-455,

as amended, set out as a note under section 6851 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 6851, 6863, 6867 of this

title; title 28 section 1346.

-End-

-CITE-

26 USC Sec. 7430 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter B - Proceedings by Taxpayers and Third Parties

-HEAD-

Sec. 7430. Awarding of costs and certain fees

-STATUTE-

(a) In general

In any administrative or court proceeding which is brought by or

against the United States in connection with the determination,

collection, or refund of any tax, interest, or penalty under this

title, the prevailing party may be awarded a judgment or a

settlement for -

(1) reasonable administrative costs incurred in connection with

such administrative proceeding within the Internal Revenue

Service, and

(2) reasonable litigation costs incurred in connection with

such court proceeding.

(b) Limitations

(1) Requirement that administrative remedies be exhausted

A judgment for reasonable litigation costs shall not be awarded

under subsection (a) in any court proceeding unless the court

determines that the prevailing party has exhausted the

administrative remedies available to such party within the

Internal Revenue Service. Any failure to agree to an extension of

the time for the assessment of any tax shall not be taken into

account for purposes of determining whether the prevailing party

meets the requirements of the preceding sentence.

(2) Only costs allocable to the United States

An award under subsection (a) shall be made only for reasonable

litigation and administrative costs which are allocable to the

United States and not to any other party.

(3) Costs denied where party prevailing protracts proceedings

No award for reasonable litigation and administrative costs may

be made under subsection (a) with respect to any portion of the

administrative or court proceeding during which the prevailing

party has unreasonably protracted such proceeding.

(4) Period for applying to IRS for administrative costs

An award may be made under subsection (a) by the Internal

Revenue Service for reasonable administrative costs only if the

prevailing party files an application with the Internal Revenue

Service for such costs before the 91st day after the date on

which the final decision of the Internal Revenue Service as to

the determination of the tax, interest, or penalty is mailed to

such party.

(c) Definitions

For purposes of this section -

(1) Reasonable litigation costs

The term "reasonable litigation costs" includes -

(A) reasonable court costs, and

(B) based upon prevailing market rates for the kind or

quality of services furnished -

(i) the reasonable expenses of expert witnesses in

connection with a court proceeding, except that no expert

witness shall be compensated at a rate in excess of the

highest rate of compensation for expert witnesses paid by the

United States,

(ii) the reasonable cost of any study, analysis,

engineering report, test, or project which is found by the

court to be necessary for the preparation of the party's

case, and

(iii) reasonable fees paid or incurred for the services of

attorneys in connection with the court proceeding, except

that such fees shall not be in excess of $125 per hour unless

the court determines that a special factor, such as the

limited availability of qualified attorneys for such

proceeding, the difficulty of the issues presented in the

case, or the local availability of tax expertise, justifies a

higher rate.

In the case of any calendar year beginning after 1996, the dollar

amount referred to in clause (iii) shall be increased by an

amount equal to such dollar amount multiplied by the

cost-of-living adjustment determined under section 1(f)(3) for

such calendar year, by substituting "calendar year 1995" for

"calendar year 1992" in subparagraph (B) thereof. If any dollar

amount after being increased under the preceding sentence is not

a multiple of $10, such dollar amount shall be rounded to the

nearest multiple of $10.

(2) Reasonable administrative costs

The term "reasonable administrative costs" means -

(A) any administrative fees or similar charges imposed by the

Internal Revenue Service, and

(B) expenses, costs, and fees described in paragraph (1)(B),

except that any determination made by the court under clause

(ii) or (iii) thereof shall be made by the Internal Revenue

Service in cases where the determination under paragraph (4)(C)

of the awarding of reasonable administrative costs is made by

the Internal Revenue Service.

Such term shall only include costs incurred on or after whichever

of the following is the earliest: (i) the date of the receipt by

the taxpayer of the notice of the decision of the Internal

Revenue Service Office of Appeals; (ii) the date of the notice of

deficiency; or (iii) the date on which the first letter of

proposed deficiency which allows the taxpayer an opportunity for

administrative review in the Internal Revenue Service Office of

Appeals is sent.

(3) Attorneys' fees

(A) In general

For purposes of paragraphs (1) and (2), fees for the services

of an individual (whether or not an attorney) who is authorized

to practice before the Tax Court or before the Internal Revenue

Service shall be treated as fees for the services of an

attorney.

(B) Pro bono services

The court may award reasonable attorneys' fees under

subsection (a) in excess of the attorneys' fees paid or

incurred if such fees are less than the reasonable attorneys'

fees because an individual is representing the prevailing party

for no fee or for a fee which (taking into account all the

facts and circumstances) is no more than a nominal fee. This

subparagraph shall apply only if such award is paid to such

individual or such individual's employer.

(4) Prevailing party

(A) In general

The term "prevailing party" means any party in any proceeding

to which subsection (a) applies (other than the United States

or any creditor of the taxpayer involved) -

(i) which -

(I) has substantially prevailed with respect to the

amount in controversy, or

(II) has substantially prevailed with respect to the most

significant issue or set of issues presented, and

(ii) which meets the requirements of the 1st sentence of

section 2412(d)(1)(B) of title 28, United States Code (as in

effect on October 22, 1986) except to the extent differing

procedures are established by rule of court and meets the

requirements of section 2412(d)(2)(B) of such title 28 (as so

in effect).

(B) Exception if United States establishes that its position

was substantially justified

(i) General rule

A party shall not be treated as the prevailing party in a

proceeding to which subsection (a) applies if the United

States establishes that the position of the United States in

the proceeding was substantially justified.

(ii) Presumption of no justification if Internal Revenue

Service did not follow certain published guidance

For purposes of clause (i), the position of the United

States shall be presumed not to be substantially justified if

the Internal Revenue Service did not follow its applicable

published guidance in the administrative proceeding. Such

presumption may be rebutted.

(iii) Effect of losing on substantially similar issues

In determining for purposes of clause (i) whether the

position of the United States was substantially justified,

the court shall take into account whether the United States

has lost in courts of appeal for other circuits on

substantially similar issues.

(iv) Applicable published guidance

For purposes of clause (ii), the term "applicable published

guidance" means -

(I) regulations, revenue rulings, revenue procedures,

information releases, notices, and announcements, and

(II) any of the following which are issued to the

taxpayer: private letter rulings, technical advice

memoranda, and determination letters.

(C) Determination as to prevailing party

Any determination under this paragraph as to whether a party

is a prevailing party shall be made by agreement of the parties

or -

(i) in the case where the final determination with respect

to the tax, interest, or penalty is made at the

administrative level, by the Internal Revenue Service, or

(ii) in the case where such final determination is made by

a court, the court.

(D) Special rules for applying net worth requirement

In applying the requirements of section 2412(d)(2)(B) of

title 28, United States Code, for purposes of subparagraph

(A)(ii) of this paragraph -

(i) the net worth limitation in clause (i) of such section

shall apply to -

(I) an estate but shall be determined as of the date of

the decedent's death, and

(II) a trust but shall be determined as of the last day

of the taxable year involved in the proceeding, and

(ii) individuals filing a joint return shall be treated as

separate individuals for purposes of clause (i) of such

section.

(E) Special rules where judgment less than taxpayer's offer

(i) In general

A party to a court proceeding meeting the requirements of

subparagraph (A)(ii) shall be treated as the prevailing party

if the liability of the taxpayer pursuant to the judgment in

the proceeding (determined without regard to interest) is

equal to or less than the liability of the taxpayer which

would have been so determined if the United States had

accepted a qualified offer of the party under subsection (g).

(ii) Exceptions

This subparagraph shall not apply to -

(I) any judgment issued pursuant to a settlement; or

(II) any proceeding in which the amount of tax liability

is not in issue, including any declaratory judgment

proceeding, any proceeding to enforce or quash any summons

issued pursuant to this title, and any action to restrain

disclosure under section 6110(f).

(iii) Special rules

If this subparagraph applies to any court proceeding -

(I) the determination under clause (i) shall be made by

reference to the last qualified offer made with respect to

the tax liability at issue in the proceeding; and

(II) reasonable administrative and litigation costs shall

only include costs incurred on and after the date of such

offer.

(iv) Coordination

This subparagraph shall not apply to a party which is a

prevailing party under any other provision of this paragraph.

(5) Administrative proceedings

The term "administrative proceeding" means any procedure or

other action before the Internal Revenue Service.

(6) Court proceedings

The term "court proceeding" means any civil action brought in a

court of the United States (including the Tax Court and the

United States Court of Federal Claims).

(7) Position of United States

The term "position of the United States" means -

(A) the position taken by the United States in a judicial

proceeding to which subsection (a) applies, and

(B) the position taken in an administrative proceeding to

which subsection (a) applies as of the earlier of -

(i) the date of the receipt by the taxpayer of the notice

of the decision of the Internal Revenue Service Office of

Appeals, or

(ii) the date of the notice of deficiency.

(d) Special rules for payment of costs

(1) Reasonable administrative costs

An award for reasonable administrative costs shall be payable

out of funds appropriated under section 1304 of title 31, United

States Code.

(2) Reasonable litigation costs

An award for reasonable litigation costs shall be payable in

the case of the Tax Court in the same manner as such an award by

a district court.

(e) Multiple actions

For purposes of this section, in the case of -

(1) multiple actions which could have been joined or

consolidated, or

(2) a case or cases involving a return or returns of the same

taxpayer (including joint returns of married individuals) which

could have been joined in a single court proceeding in the same

court,

such actions or cases shall be treated as 1 court proceeding

regardless of whether such joinder or consolidation actually

occurs, unless the court in which such action is brought

determines, in its discretion, that it would be inappropriate to

treat such actions or cases as joined or consolidated.

(f) Right of appeal

(1) Court proceedings

An order granting or denying (in whole or in part) an award for

reasonable litigation or administrative costs under subsection

(a) in a court proceeding, may be incorporated as a part of the

decision or judgment in the court proceeding and shall be subject

to appeal in the same manner as the decision or judgment.

(2) Administrative proceedings

A decision granting or denying (in whole or in part) an award

for reasonable administrative costs under subsection (a) by the

Internal Revenue Service shall be subject to the filing of a

petition for review with the Tax Court under rules similar to the

rules under section 7463 (without regard to the amount in

dispute). If the Secretary sends by certified or registered mail

a notice of such decision to the petitioner, no proceeding in the

Tax Court may be initiated under this paragraph unless such

petition is filed before the 91st day after the date of such

mailing.

(3) Appeal of Tax Court decision

An order of the Tax Court disposing of a petition under

paragraph (2) shall be reviewable in the same manner as a

decision of the Tax Court, but only with respect to the matters

determined in such order.

(g) Qualified offer

For purposes of subsection (c)(4) -

(1) In general

The term "qualified offer" means a written offer which -

(A) is made by the taxpayer to the United States during the

qualified offer period;

(B) specifies the offered amount of the taxpayer's liability

(determined without regard to interest);

(C) is designated at the time it is made as a qualified offer

for purposes of this section; and

(D) remains open during the period beginning on the date it

is made and ending on the earliest of the date the offer is

rejected, the date the trial begins, or the 90th day after the

date the offer is made.

(2) Qualified offer period

For purposes of this subsection, the term "qualified offer

period" means the period -

(A) beginning on the date on which the first letter of

proposed deficiency which allows the taxpayer an opportunity

for administrative review in the Internal Revenue Service

Office of Appeals is sent, and

(B) ending on the date which is 30 days before the date the

case is first set for trial.

-SOURCE-

(Added Pub. L. 97-248, title II, Sec. 292(a), Sept. 3, 1982, 96

Stat. 572; amended Pub. L. 98-369, div. A, title VII, Sec. 714(c),

July 18, 1984, 98 Stat. 961; Pub. L. 99-514, title XV, Sec.

1551(a)-(g), Oct. 22, 1986, 100 Stat. 2752, 2753; Pub. L. 100-647,

title I, Sec. 1015(i), title VI, Sec. 6239(a), Nov. 10, 1988, 102

Stat. 3571, 3743; Pub. L. 102-572, title IX, Sec. 902(b)(1), Oct.

29, 1992, 106 Stat. 4516; Pub. L. 104-168, title VII, Secs.

701(a)-(c)(2), 702(a), 703(a), 704(a), July 30, 1996, 110 Stat.

1463, 1464; Pub. L. 105-34, title XII, Sec. 1285(a)-(c), title XIV,

Sec. 1453(a), Aug. 5, 1997, 111 Stat. 1038, 1055; Pub. L. 105-206,

title III, Sec. 3101(a)-(e), title VI, Secs. 6012(h), 6014(e), July

22, 1998, 112 Stat. 727, 728, 819, 820; Pub. L. 106-554, Sec.

1(a)(7) [title III, Sec. 319(25)], Dec. 21, 2000, 114 Stat. 2763,

2763A-647.)

-STATAMEND-

ADJUSTMENT OF HOURLY LIMIT ON ATTORNEY FEES AWARDED FOR CALENDAR

YEAR 2003

For adjustment of the hourly limit on attorney fees awarded under

this section for calendar year 2003, see section 3.32 of Revenue

Procedure 2002-70, set out as a note under section 1 of this title.

-MISC1-

PRIOR PROVISIONS

A prior section 7430 was renumbered section 7437 of this title.

AMENDMENTS

2000 - Subsec. (c)(3). Pub. L. 106-554, Sec. 1(a)(7) [title III,

Sec. 319(25)(A)], substituted "Attorneys' " for "Attorneys" in

heading.

Subsec. (c)(3)(B). Pub. L. 106-554, Sec. 1(a)(7) [title III, Sec.

319(25)(B)], substituted "attorneys' fees" for "attorneys fees"

wherever appearing.

1998 - Subsec. (b)(4), (5). Pub. L. 105-206, Sec. 6012(h),

redesignated par. (5) as (4).

Subsec. (c)(1)(B)(iii). Pub. L. 105-206, Sec. 3101(a),

substituted "$125" for "$110" and inserted "the difficulty of the

issues presented in the case, or the local availability of tax

expertise," before "justifies a higher rate".

Subsec. (c)(2). Pub. L. 105-206, Sec. 3101(b), added concluding

provisions and struck out former concluding provisions which read

as follows: "Such term shall only include costs incurred on or

after the earlier of (i) the date of the receipt by the taxpayer of

the notice of the decision of the Internal Revenue Service Office

of Appeals, or (ii) the date of the notice of deficiency."

Subsec. (c)(3). Pub. L. 105-206, Sec. 3101(c), substituted

"attorneys" for "attorney's" in heading and amended text of par.

(3) generally. Prior to amendment, text read as follows: "For

purposes of paragraphs (1) and (2), fees for the services of an

individual (whether or not an attorney) who is authorized to

practice before the Tax Court or before the Internal Revenue

Service shall be treated as fees for the services of an attorney."

Subsec. (c)(4)(B)(iii), (iv). Pub. L. 105-206, Sec. 3101(d),

added cl. (iii) and redesignated former cl. (iii) as (iv).

Subsec. (c)(4)(D). Pub. L. 105-206, Sec. 6014(e), substituted

"subparagraph (A)(ii)" for "subparagraph (A)(iii)" in introductory

provisions.

Subsec. (c)(4)(E). Pub. L. 105-206, Sec. 3101(e)(1), added

subpar. (E).

Subsec. (g). Pub. L. 105-206, Sec. 3101(e)(2), added subsec. (g).

1997 - Subsec. (b)(5). Pub. L. 105-34, Sec. 1285(b), added par.

(5).

Subsec. (c)(4)(D). Pub. L. 105-34, Sec. 1453(a), added subpar.

(D).

Subsec. (f)(2). Pub. L. 105-34, Sec. 1285(c), substituted "the

filing of a petition for review with" for "appeal to" and inserted

at end "If the Secretary sends by certified or registered mail a

notice of such decision to the petitioner, no proceeding in the Tax

Court may be initiated under this paragraph unless such petition is

filed before the 91st day after the date of such mailing."

Subsec. (f)(3). Pub. L. 105-34, Sec. 1285(a), added par. (3).

1996 - Subsec. (b)(1). Pub. L. 104-168, Sec. 703(a), inserted at

end "Any failure to agree to an extension of the time for the

assessment of any tax shall not be taken into account for purposes

of determining whether the prevailing party meets the requirements

of the preceding sentence."

Subsec. (b)(3), (4). Pub. L. 104-168, Sec. 704(a), redesignated

par. (4) as (3) and struck out former par. (3) which read as

follows:

"(3) Exclusion of declaratory judgment proceedings. -

"(A) In general. - No award for reasonable litigation costs may

be made under subsection (a) with respect to any declaratory

judgment proceeding.

"(B) Exception for section 501(c)(3) determination revocation

proceedings. - Subparagraph (A) shall not apply to any proceeding

which involves the revocation of a determination that the

organization is described in section 501(c)(3)."

Subsec. (c)(1). Pub. L. 104-168, Sec. 702(a)(3), inserted closing

provisions "In the case of any calendar year beginning after 1996,

the dollar amount referred to in clause (iii) shall be increased by

an amount equal to such dollar amount multiplied by the

cost-of-living adjustment determined under section 1(f)(3) for such

calendar year, by substituting 'calendar year 1995' for 'calendar

year 1992' in subparagraph (B) thereof. If any dollar amount after

being increased under the preceding sentence is not a multiple of

$10, such dollar amount shall be rounded to the nearest multiple of

$10."

Subsec. (c)(1)(B)(iii). Pub. L. 104-168, Sec. 702(a)(1), (2),

substituted "$110" for "$75" and struck out "an increase in the

cost of living or" before "a special factor,".

Subsec. (c)(2)(B). Pub. L. 104-168, Sec. 701(c)(1), substituted

"paragraph (4)(C)" for "paragraph (4)(B)".

Subsec. (c)(4)(A). Pub. L. 104-168, Sec. 701(a), redesignated

cls. (ii) and (iii) as (i) and (ii), respectively, and struck out

former cl. (i) which read as follows: "which establishes that the

position of the United States in the proceeding was not

substantially justified,".

Subsec. (c)(4)(B). Pub. L. 104-168, Sec. 701(b), added subpar.

(B). Former subpar. (B) redesignated (C).

Subsec. (c)(4)(C). Pub. L. 104-168, Sec. 701(c)(2), substituted

"Any determination under this paragraph" for "Any determination

under subparagraph (A)".

Pub. L. 104-168, Sec. 701(b), redesignated subpar. (B) as (C).

1992 - Subsec. (c)(6). Pub. L. 102-572 substituted "United States

Court of Federal Claims" for "United States Claims Court".

1988 - Pub. L. 100-647, Sec. 6239(a), substituted "costs" for

"court costs" in section catchline and amended text generally,

revising and restating provisions so as to include costs and fees

in administrative proceedings.

Subsec. (c)(2)(A)(iii). Pub. L. 100-647, Sec. 1015(i), amended

cl. (iii) generally. Prior to amendment, cl. (iii) read as follows:

"meets the requirements of section 504(b)(1)(B) of title 5, United

States Code (as in effect on the date of the enactment of the Tax

Reform Act of 1986 and applied by taking into account the

commencement of the proceeding described in subsection (a) in lieu

of the initiation of the adjudication referred to in such

section)."

1986 - Subsec. (a). Pub. L. 99-514, Sec. 1551(f), inserted

"(payable in the case of the Tax Court in the same manner as such

an award by a district court)" in concluding provisions.

Subsec. (b). Pub. L. 99-514, Sec. 1551(a), (b), redesignated

pars. (2) to (4) as (1) to (3), respectively, added par. (4), and

struck out former par. (1), maximum dollar amount, which read as

follows: "The amount of reasonable litigation costs which may be

awarded under subsection (a) with respect to any prevailing party

in any civil proceeding shall not exceed $25,000."

Subsec. (c)(1)(A). Pub. L. 99-514, Sec. 1551(c), amended subpar.

(A) generally. Prior to amendment, subpar. (A) read as follows:

"The term 'reasonable litigation costs' includes -

"(i) reasonable court costs,

"(ii) the reasonable expenses of expert witnesses in connection

with the civil proceeding,

"(iii) the reasonable cost of any study, analysis, engineering

report, test, or project which is found by the court to be

necessary for the preparation of the party's case, and

"(iv) reasonable fees paid or incurred for the services of

attorneys in connection with the civil proceeding."

Subsec. (c)(2)(A). Pub. L. 99-514, Sec. 1551(d), substituted "was

not substantially justified" for "was unreasonable" in cl. (i), and

added cl. (iii).

Subsec. (c)(4). Pub. L. 99-514, Sec. 1551(e), added par. (4).

Subsec. (f). Pub. L. 99-514, Sec. 1551(g), struck out subsec.

(f), termination, which read as follows: "This section shall not

apply to any proceeding commenced after December 31, 1985."

1984 - Subsec. (a)(2). Pub. L. 98-369 inserted reference to

United States Claims Court.

EFFECTIVE DATE OF 1998 AMENDMENT

Pub. L. 105-206, title III, Sec. 3101(g), July 22, 1998, 112

Stat. 729, provided that: "The amendments made by this section

[amending this section and section 7431 of this title] shall apply

to costs incurred (and, in the case of the amendment made by

subsection (c) [amending this section], services performed) more

than 180 days after the date of the enactment of this Act [July 22,

1998]."

Amendment by sections 6012(h) and 6014(e) of Pub. L. 105-206

effective, except as otherwise provided, as if included in the

provisions of the Taxpayer Relief Act of 1997, Pub. L. 105-34, to

which such amendment relates, see section 6024 of Pub. L. 105-206,

set out as a note under section 1 of this title.

EFFECTIVE DATE OF 1997 AMENDMENT

Section 1285(d) of Pub. L. 105-34 provided that: "The amendments

made by this section [amending this section] shall apply to civil

actions or proceedings commenced after the date of the enactment of

this Act [Aug. 5, 1997]."

Section 1453(b) of Pub. L. 105-34 provided that: "The amendment

made by this section [amending this section] shall apply to

proceedings commenced after the date of the enactment of this Act

[Aug. 5, 1997]."

EFFECTIVE DATE OF 1996 AMENDMENT

Amendment by section 701(a)-(c)(2) of Pub. L. 104-168 applicable

in case of proceedings commenced after July 30, 1996, see section

701(d) of Pub. L. 104-168, set out as a note under section 6404 of

this title.

Section 702(b) of Pub. L. 104-168 provided that: "The amendment

made by this section [amending this section] shall apply in the

case of proceedings commenced after the date of the enactment of

this Act [July 30, 1996]."

Section 703(b) of Pub. L. 104-168 provided that: "The amendment

made by this section [amending this section] shall apply in the

case of proceedings commenced after the date of the enactment of

this Act [July 30, 1996]."

Section 704(b) of Pub. L. 104-168 provided that: "The amendment

made by this section [amending this section] shall apply in the

case of proceedings commenced after the date of the enactment of

this Act [July 30, 1996]."

EFFECTIVE DATE OF 1992 AMENDMENT

Amendment by Pub. L. 102-572 effective Oct. 29, 1992, see section

911 of Pub. L. 102-572, set out as a note under section 171 of

Title 28, Judiciary and Judicial Procedure.

EFFECTIVE DATE OF 1988 AMENDMENT

Amendment by section 1015(i) of Pub. L. 100-647 effective, except

as otherwise provided, as if included in the provision of the Tax

Reform Act of 1986, Pub. L. 99-514, to which such amendment

relates, see section 1019(a) of Pub. L. 100-647, set out as a note

under section 1 of this title.

Section 6239(d) of Pub. L. 100-647 provided that: "The amendments

made by this section [amending this section and section 504 of

Title 5, Government Organization and Employees] shall apply to

proceedings commencing after the date of the enactment of this Act

[Nov. 10, 1988]."

EFFECTIVE DATE OF 1986 AMENDMENT

Section 1551(h) of Pub. L. 99-514 provided that:

"(1) General rule. - Except as provided in paragraph (2), the

amendments made by this section [amending this section] shall apply

to amounts paid after September 30, 1986, in civil actions or

proceedings, commenced after December 31, 1985.

"(2) Subsection (f). - The amendment made by subsection (f)

[amending this section] shall take effect as if included in the

amendments made by section 292 of the Tax Equity and Fiscal

Responsibility Act of 1982 [see Effective Date note below].

"(3) Applicability of amendments to certain prior cases. - The

amendments made by this section shall apply to any case commenced

after December 31, 1985, and finally disposed of before the date of

the enactment of this Act [Oct. 22, 1986], except that in any such

case, the 30-day period referred to in section 2412(d)(1)(B) of

title 28, United States Code, or Rule 231 of the Tax Court [26 App.

U.S.C. Rule 231], as the case may be, shall be deemed to commence

on the date of the enactment of this Act [Oct. 22, 1986]."

EFFECTIVE DATE OF 1984 AMENDMENT

Amendment by Pub. L. 98-369 effective as if included in the

provision of the Tax Equity and Fiscal Responsibility Act of 1982,

Pub. L. 97-248, to which such amendment relates, see section 715 of

Pub. L. 98-369, set out as a note under section 31 of this title.

EFFECTIVE DATE

Section 292(e) of Pub. L. 97-248, as amended by Pub. L. 98-369,

div. A, title I, Sec. 160, July 18, 1984, 98 Stat. 696, provided

that:

"(1) In general. - The amendments made by this section [enacting

this section and amending section 6673 of this title and section

2412 of Title 28, Judiciary and Judicial Procedure] shall apply to

civil actions or proceedings commenced after February 28, 1983.

"(2) Penalty. - The amendments made by subsections (b) and (d)(2)

[amending section 6673 of this title] shall apply to any action or

proceeding in the United States Tax Court which -

"(A) is commenced after December 31, 1982, or

"(B) is pending in the United States Tax Court on the day which

is 120 days after the date of the enactment of the Tax Reform Act

of 1984 [July 18, 1984]."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 6404, 6512, 6656, 7431,

7433, 7436, 7491, 7611 of this title; title 5 section 504; title 28

section 2412.

-End-

-CITE-

26 USC Sec. 7431 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter B - Proceedings by Taxpayers and Third Parties

-HEAD-

Sec. 7431. Civil damages for unauthorized inspection or disclosure

of returns and return information

-STATUTE-

(a) In general

(1) Inspection or disclosure by employee of United States

If any officer or employee of the United States knowingly, or

by reason of negligence, inspects or discloses any return or

return information with respect to a taxpayer in violation of any

provision of section 6103, such taxpayer may bring a civil action

for damages against the United States in a district court of the

United States.

(2) Inspection or disclosure by a person who is not an employee

of United States

If any person who is not an officer or employee of the United

States knowingly, or by reason of negligence, inspects or

discloses any return or return information with respect to a

taxpayer in violation of any provision of section 6103, such

taxpayer may bring a civil action for damages against such person

in a district court of the United States.

(b) Exceptions

No liability shall arise under this section with respect to any

inspection or disclosure -

(1) which results from a good faith, but erroneous,

interpretation of section 6103, or

(2) which is requested by the taxpayer.

(c) 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) the greater of -

(A) $1,000 for each act of unauthorized inspection or

disclosure of a return or return information with respect to

which such defendant is found liable, or

(B) the sum of -

(i) the actual damages sustained by the plaintiff as a

result of such unauthorized inspection or disclosure, plus

(ii) in the case of a willful inspection or disclosure or

an inspection or disclosure which is the result of gross

negligence, punitive damages, plus

(2) the costs of the action, plus

(3) in the case of a plaintiff which is described in section

7430(c)(4)(A)(ii), reasonable attorneys fees, except that if the

defendant is the United States, reasonable attorneys fees may be

awarded only if the plaintiff is the prevailing party (as

determined under section 7430(c)(4)).

(d) Period for bringing action

Notwithstanding any other provision of law, an action to enforce

any liability created under this section may be brought, without

regard to the amount in controversy, at any time within 2 years

after the date of discovery by the plaintiff of the unauthorized

inspection or disclosure.

(e) Notification of unlawful inspection and disclosure

If any person is criminally charged by indictment or information

with inspection or disclosure of a taxpayer's return or return

information in violation of -

(1) paragraph (1) or (2) of section 7213(a),

(2) section 7213A(a), or

(3) subparagraph (B) of section 1030(a)(2) of title 18, United

States Code,

the Secretary shall notify such taxpayer as soon as practicable of

such inspection or disclosure.

(f) Definitions

For purposes of this section, the terms "inspect", "inspection",

"return", and "return information" have the respective meanings

given such terms by section 6103(b).

(g) Extension to information obtained under section 3406

For purposes of this section -

(1) any information obtained under section 3406 (including

information with respect to any payee certification failure under

subsection (d) thereof) shall be treated as return information,

and

(2) any inspection or use of such information other than for

purposes of meeting any requirement under section 3406 or

(subject to the safeguards set forth in section 6103) for

purposes permitted under section 6103 shall be treated as a

violation of section 6103.

For purposes of subsection (b), the reference to section 6103 shall

be treated as including a reference to section 3406.

(h) Special rule for information obtained under section 6103(k)(9)

For purposes of this section, any reference to section 6103 shall

be treated as including a reference to section 6311(e).

-SOURCE-

(Added Pub. L. 97-248, title III, Sec. 357(a), Sept. 3, 1982, 96

Stat. 645; amended Pub. L. 98-67, title I, Sec. 104(b), Aug. 5,

1983, 97 Stat. 379; Pub. L. 105-34, title XII, Sec. 1205(c)(2),

Aug. 5, 1997, 111 Stat. 998; Pub. L. 105-35, Sec. 3(a)-(d)(4), (6),

Aug. 5, 1997, 111 Stat. 1105, 1106; Pub. L. 105-206, title III,

Sec. 3101(f), title VI, Sec. 6012(b)(3), July 22, 1998, 112 Stat.

729, 819.)

-MISC1-

PRIOR PROVISIONS

A prior section 7431 was renumbered section 7437 of this title.

AMENDMENTS

1998 - Subsec. (c)(2). Pub. L. 105-206, Sec. 3101(f), substituted

", plus" for the period at end.

Subsec. (c)(3). Pub. L. 105-206, Sec. 3101(f), added par. (3).

Subsecs. (g), (h). Pub. L. 105-206, Sec. 6012(b)(3), redesignated

subsec. (g), relating to special rule for information obtained

under section 6103(k)(8), as (h), and substituted "(9)" for "(8)"

in heading.

1997 - Pub. L. 105-35, Sec. 3(d)(4), inserted "inspection or"

before "disclosure" in section catchline.

Subsec. (a)(1), (2). Pub. L. 105-35, Sec. 3(a)(1), (2),

substituted "Inspection or disclosure" for "Disclosure" in headings

and "inspects or discloses" for "discloses" in text.

Subsec. (b). Pub. L. 105-35, Sec. 3(c), amended subsec. (b)

generally. Prior to amendment, subsec. (b) read as follows:

"(b) No Liability for Good Faith but Erroneous Interpretation. -

No liability shall arise under this section with respect to any

disclosure which results from a good faith, but erroneous,

interpretation of section 6103."

Subsec. (c)(1). Pub. L. 105-35, Sec. 3(d)(1), (2), inserted

"inspection or" before "disclosure" in subpars. (A) and (B)(i) and

substituted "willful inspection or disclosure or an inspection or

disclosure" for "willful disclosure or a disclosure" in subpar.

(B)(ii).

Subsec. (d). Pub. L. 105-35, Sec. 3(d)(1), inserted "inspection

or" before "disclosure".

Subsec. (e). Pub. L. 105-35, Sec. 3(b), added subsec. (e). Former

subsec. (e) redesignated (f).

Subsec. (f). Pub. L. 105-35, Sec. 3(b), (d)(3), redesignated

subsec. (e) as (f) and amended it generally. Prior to amendment,

subsec. (f) read as follows:

"(f) Return; Return Information. - For purposes of this section,

the terms 'return' and 'return information' have the respective

meanings given such terms in section 6103(b)."

Subsec. (g). Pub. L. 105-35, Sec. 3(b), (d)(6), redesignated

subsec. (f) as (g) and substituted "any inspection or use" for "any

use" in par. (2).

Pub. L. 105-34, Sec. 1205(c)(2), added subsec. (g) relating to

special rule for information obtained under section 6103(k)(8).

1983 - Subsec. (f). Pub. L. 98-67 added subsec. (f).

EFFECTIVE DATE OF 1998 AMENDMENT

Amendment by section 3101(f) of Pub. L. 105-206 applicable to

costs incurred more than 180 days after July 22, 1998, see section

3101(g) of Pub. L. 105-206, set out as a note under section 7430 of

this title.

Amendment by section 6012(b)(3) of Pub. L. 105-206 effective,

except as otherwise provided, as if included in the provisions of

the Taxpayer Relief Act of 1997, Pub. L. 105-34, to which such

amendment relates, see section 6024 of Pub. L. 105-206, set out as

a note under section 1 of this title.

EFFECTIVE DATE OF 1997 AMENDMENTS

Section 3(e) of Pub. L. 105-35 provided that: "The amendments

made by this section [amending this section] shall apply to

inspections and disclosures occurring on and after the date of the

enactment of this Act [Aug. 5, 1997]."

Amendment by Pub. L. 105-34 effective on the day 9 months after

Aug. 5, 1997, see section 1205(d) of Pub. L. 105-34, set out as a

note under section 6103 of this title.

EFFECTIVE DATE OF 1983 AMENDMENT

Amendment by Pub. L. 98-67 effective Aug. 5, 1983, see section

110(c) of Pub. L. 98-67, set out as a note under section 31 of this

title.

EFFECTIVE DATE

Section 357(c) of Pub. L. 97-248 provided that: "The amendments

made by this section [enacting this section and repealing section

7217 of this title] shall apply with respect to disclosures made

after the date of enactment of this Act [Sept. 3, 1982]."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 3406, 6105, 6311 of this

title; title 5 section 3111.

-End-

-CITE-

26 USC Sec. 7432 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter B - Proceedings by Taxpayers and Third Parties

-HEAD-

Sec. 7432. Civil damages for failure to release lien

-STATUTE-

(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.

-SOURCE-

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

Stat. 3746.)

-MISC1-

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."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

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

-End-

-CITE-

26 USC Sec. 7433 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter B - Proceedings by Taxpayers and Third Parties

-HEAD-

Sec. 7433. Civil damages for certain unauthorized collection

actions

-STATUTE-

(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, or by reason of negligence,

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) or petition filed

under subsection (e), 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 $1,000,000 ($100,000, in the case of

negligence) or the sum of -

(1) actual, direct economic damages sustained by the plaintiff

as a proximate result of the reckless or intentional or negligent

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.

(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.

-SOURCE-

(Added Pub. L. 100-647, title VI, Sec. 6241(a), Nov. 10, 1988, 102

Stat. 3747; amended Pub. L. 104-168, title VIII, Secs. 801(a),

802(a), July 30, 1996, 110 Stat. 1465; Pub. L. 105-206, title III,

Sec. 3102(a), (c), July 22, 1998, 112 Stat. 730.)

-MISC1-

PRIOR PROVISIONS

A prior section 7433 was renumbered 7437 of this title.

AMENDMENTS

1998 - Subsec. (a). Pub. L. 105-206, Sec. 3102(a)(1)(A), inserted

", or by reason of negligence," after "recklessly or

intentionally".

Subsec. (b). Pub. L. 105-206, Sec. 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".

Subsec. (b)(1). Pub. L. 105-206, Sec. 3102(a)(1)(B)(ii), inserted

"or negligent" after "reckless or intentional".

Subsec. (d)(1). Pub. L. 105-206, Sec. 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."

Subsec. (e). Pub. L. 105-206, Sec. 3102(c)(1), added subsec. (e).

1996 - Subsec. (b). Pub. L. 104-168, Sec. 801(a), substituted

"$1,000,000" for "$100,000".

Subsec. (d)(1). Pub. L. 104-168, Sec. 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."

EFFECTIVE DATE OF 1998 AMENDMENT

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.

EFFECTIVE DATE OF 1996 AMENDMENT

Section 801(b) of Pub. L. 104-168 provided that: "The amendment

made by subsection (a) [amending this section] shall apply to

actions by officers or employees of the Internal Revenue Service

after the date of the enactment of this Act [July 30, 1996]."

Section 802(b) of Pub. L. 104-168 provided that: "The amendment

made by this section [amending this section] shall apply in the

case of proceedings commenced after the date of the enactment of

this Act [July 30, 1996]."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 6304, 6335, 6673, 7426 of

this title.

-End-

-CITE-

26 USC Sec. 7434 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter B - Proceedings by Taxpayers and Third Parties

-HEAD-

Sec. 7434. Civil damages for fraudulent filing of information

returns

-STATUTE-

(a) In general

If any person willfully files a fraudulent information return

with respect to payments purported to be made to any other person,

such other person may bring a civil action for damages against the

person so filing such return.

(b) Damages-CITE-

26 USC CHAPTER 76 - JUDICIAL PROCEEDINGS 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

-HEAD-

CHAPTER 76 - JUDICIAL PROCEEDINGS

-MISC1-

Subchapter Sec.(!1)

A. Civil actions by the United States 7401

B. Proceedings by Taxpayers and Third Parties 7421

C. The Tax Court 7441

D. Court review of Tax Court decisions 7481

E. Burden of proof 7491

AMENDMENTS

1998 - Pub. L. 105-206, title III, Sec. 3001(b), July 22, 1998,

112 Stat. 727, added item for subchapter E.

1976 - Pub. L. 94-455, title XIX, Sec. 1952(n)(4)(B), Oct. 4,

1976, 90 Stat. 1846, struck out item for subchapter E

"Miscellaneous provisions".

1966 - Pub. L. 89-719, title I, Sec. 110(d)(3), Nov. 2, 1966, 80

Stat. 1145, substituted "Taxpayers and Third Parties" for

"taxpayers" in item for subchapter B.

-SECREF-

CHAPTER REFERRED TO IN OTHER SECTIONS

This chapter is referred to in sections 7801, 7851 of this title.

-FOOTNOTE-

(!1) Section numbers editorially supplied.

-End-

-CITE-

26 USC Subchapter A - Civil Actions by the United States 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter A - Civil Actions by the United States

-HEAD-

SUBCHAPTER A - CIVIL ACTIONS BY THE UNITED STATES

-MISC1-

Sec.

7401. Authorization.

7402. Jurisdiction of district courts.

7403. Action to enforce lien or to subject property to

payment of tax.

7404. Authority to bring civil action for estate taxes.

7405. Action for recovery of erroneous refunds.

7406. Disposition of judgments and moneys recovered.

7407. Action to enjoin income tax return preparers.

7408. Action to enjoin promoters of abusive tax shelters,

etc.

7409. Action to enjoin flagrant political expenditures of

section 501(c)(3) organizations.

7410. Cross references.

AMENDMENTS

1987 - Pub. L. 100-203, title X, Sec. 10713(a)(2), Dec. 22, 1987,

101 Stat. 1330-469, added item 7409 and redesignated former item

7409 as 7410.

1982 - Pub. L. 97-248, title III, Sec. 321(b), Sept. 3, 1982, 96

Stat. 612, added item 7408 and redesignated former item 7408 as

7409.

1976 - Pub. L. 94-455, title XII, Sec. 1203(i)(4), Oct. 4, 1976,

90 Stat. 1695, added item 7407 and redesignated former item 7407 as

7408.

-End-

-CITE-

26 USC Sec. 7401 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter A - Civil Actions by the United States

-HEAD-

Sec. 7401. Authorization

-STATUTE-

No civil action for the collection or recovery of taxes, or of

any fine, penalty, or forfeiture, shall be commenced unless the

Secretary authorizes or sanctions the proceedings and the Attorney

General or his delegate directs that the action be commenced.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 873; Pub. L. 94-455, title XIX,

Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.)

-MISC1-

AMENDMENTS

1976 - Pub. L. 94-455 struck out "or his delegate" after

"Secretary".

-End-

-CITE-

26 USC Sec. 7402 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter A - Civil Actions by the United States

-HEAD-

Sec. 7402. Jurisdiction of district courts

-STATUTE-

(a) To issue orders, processes, and judgments

The district courts of the United States at the instance of the

United States shall have such jurisdiction to make and issue in

civil actions, writs and orders of injunction, and of ne exeat

republica, orders appointing receivers, and such other orders and

processes, and to render such judgments and decrees as may be

necessary or appropriate for the enforcement of the internal

revenue laws. The remedies hereby provided are in addition to and

not exclusive of any and all other remedies of the United States in

such courts or otherwise to enforce such laws.

(b) To enforce summons

If any person is summoned under the internal revenue laws to

appear, to testify, or to produce books, papers, or other data, the

district court of the United States for the district in which such

person resides or may be found shall have jurisdiction by

appropriate process to compel such attendance, testimony, or

production of books, papers, or other data.

(c) For damages to United States officers or employees

Any officer or employee of the United States acting under

authority of this title, or any person acting under or by authority

of any such officer or employee, receiving any injury to his person

or property in the discharge of his duty shall be entitled to

maintain an action for damages therefor, in the district court of

the United States, in the district wherein the party doing the

injury may reside or shall be found.

[(d) Repealed. Pub. L. 92-310, title II, Sec. 230(d), June 6, 1972,

86 Stat. 209]

(e) To quiet title

The United States district courts shall have jurisdiction of any

action brought by the United States to quiet title to property if

the title claimed by the United States to such property was derived

from enforcement of a lien under this title.

(f) General jurisdiction

For general jurisdiction of the district courts of the United

States in civil actions involving internal revenue, see section

1340 of title 28 of the United States Code.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 873; Pub. L. 89-719, title I,

Sec. 107(a), Nov. 2, 1966, 80 Stat. 1140; Pub. L. 93-310, title II,

Sec. 230(d), June 6, 1972, 86 Stat. 209.)

-MISC1-

AMENDMENTS

1972 - Subsec. (d). Pub. L. 92-310 repealed subsec. (d) which

granted district courts jurisdiction of actions brought on official

bonds.

1966 - Subsecs. (e), (f). Pub. L. 89-719 added subsec. (e) and

redesignated former subsec. (e) as (f).

EFFECTIVE DATE OF 1966 AMENDMENT

Amendment by Pub. L. 89-719 applicable after Nov. 2, 1966,

regardless of when title or lien of United States arose or when

lien or interest of another person was acquired, with certain

exceptions, see section 114(a)-(c) of Pub. L. 89-719, set out as a

note under section 6323 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 7407, 7408, 7409, 7604 of

this title.

-End-

-CITE-

26 USC Sec. 7403 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter A - Civil Actions by the United States

-HEAD-

Sec. 7403. Action to enforce lien or to subject property to payment

of tax

-STATUTE-

(a) Filing

In any case where there has been a refusal or neglect to pay any

tax, or to discharge any liability in respect thereof, whether or

not levy has been made, the Attorney General or his delegate, at

the request of the Secretary, may direct a civil action to be filed

in a district court of the United States to enforce the lien of the

United States under this title with respect to such tax or

liability or to subject any property, of whatever nature, of the

delinquent, or in which he has any right, title, or interest, to

the payment of such tax or liability. For purposes of the preceding

sentence, any acceleration of payment under section 6166(g) shall

be treated as a neglect to pay tax.

(b) Parties

All persons having liens upon or claiming any interest in the

property involved in such action shall be made parties thereto.

(c) Adjudication and decree

The court shall, after the parties have been duly notified of the

action, proceed to adjudicate all matters involved therein and

finally determine the merits of all claims to and liens upon the

property, and, in all cases where a claim or interest of the United

States therein is established, may decree a sale of such property,

by the proper officer of the court, and a distribution of the

proceeds of such sale according to the findings of the court in

respect to the interests of the parties and of the United States.

If the property is sold to satisfy a first lien held by the United

States, the United States may bid at the sale such sum, not

exceeding the amount of such lien with expenses of sale, as the

Secretary directs.

(d) Receivership

In any such proceeding, at the instance of the United States, the

court may appoint a receiver to enforce the lien, or, upon

certification by the Secretary during the pendency of such

proceedings that it is in the public interest, may appoint a

receiver with all the powers of a receiver in equity.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 874; Pub. L. 89-719, title I,

Sec. 107(b), Nov. 2, 1966, 80 Stat. 1140; Pub. L. 94-455, title

XIX, Sec. 1906(b)(13)(A), title XX, Sec. 2004(f)(2), Oct. 4, 1976,

90 Stat. 1834, 1872; Pub. L. 97-34, title IV, Sec. 422(e)(8), Aug.

13, 1981, 95 Stat. 316.)

-MISC1-

AMENDMENTS

1981 - Subsec. (a). Pub. L. 97-34 struck out "or 6166A(h)" after

"section 6166(g)".

1976 - Subsec. (a). Pub. L. 94-455, Secs. 1906(b)(13)(A),

2004(f)(2), struck out "or his delegate" after "Secretary" and

inserted provisions relating to the acceleration of payment under

section 6166(g) or 6166A(h).

Subsecs. (c), (d). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck

out "or his delegate" after "Secretary".

1966 - Subsec. (c). Pub. L. 89-719 inserted sentence permitting

the United States, if the property is sold to satisfy a first lien

held by the United States, to bid at the sale such sum, not more

than the amount of such lien with expenses of sale, as the

Secretary or his delegate directs.

EFFECTIVE DATE OF 1981 AMENDMENT

Amendment by Pub. L. 97-34 applicable to estates of decedents

dying after Dec. 31, 1981, see section 422(f)(1) of Pub. L. 97-34,

set out as a note under section 6166 of this title.

EFFECTIVE DATE OF 1966 AMENDMENT

Amendment by Pub. L. 89-719 applicable after Nov. 2, 1966,

regardless of when title or lien of United States arose or when

lien or interest of another person was acquired, with certain

exceptions, see section 114(a)-(c) of Pub. L. 89-719, set out as a

note under section 6323 of this title.

-End-

-CITE-

26 USC Sec. 7404 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter A - Civil Actions by the United States

-HEAD-

Sec. 7404. Authority to bring civil action for estate taxes

-STATUTE-

If the estate tax imposed by chapter 11 is not paid on or before

the due date thereof, the Secretary shall proceed to collect the

tax under the provisions of general law; or appropriate proceedings

in the name of the United States may be commenced in any court of

the United States having jurisdiction to subject the property of

the decedent to be sold under the judgment or decree of the court.

From the proceeds of such sale the amount of the tax, together with

the costs and expenses of every description to be allowed by the

court, shall be first paid, and the balance shall be deposited

according to the order of the court, to be paid under its direction

to the person entitled thereto. This section insofar as it applies

to the collection of a deficiency shall be subject to the

provisions of sections 6213 and 6601.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 874; Pub. L. 94-455, title XIX,

Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.)

-MISC1-

AMENDMENTS

1976 - Pub. L. 94-455 struck out "or his delegate" after

"Secretary".

-End-

-CITE-

26 USC Sec. 7405 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter A - Civil Actions by the United States

-HEAD-

Sec. 7405. Action for recovery of erroneous refunds

-STATUTE-

(a) Refunds after limitation period

Any portion of a tax imposed by this title, refund of which is

erroneously made, within the meaning of section 6514, may be

recovered by civil action brought in the name of the United States.

(b) Refunds otherwise erroneous

Any portion of a tax imposed by this title which has been

erroneously refunded (if such refund would not be considered as

erroneous under section 6514) may be recovered by civil action

brought in the name of the United States.

(c) Interest

For provision relating to interest on erroneous refunds, see

section 6602.

(d) Periods of limitation

For periods of limitations on actions under this section, see

section 6532(b).

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 874.)

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 6514, 6532, 6602 of this

title.

-End-

-CITE-

26 USC Sec. 7406 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter A - Civil Actions by the United States

-HEAD-

Sec. 7406. Disposition of judgments and moneys recovered

-STATUTE-

All judgments and moneys recovered or received for taxes, costs,

forfeitures, and penalties shall be paid to the Secretary as

collections of internal revenue taxes.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 875; Pub. L. 94-455, title XIX,

Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.)

-MISC1-

AMENDMENTS

1976 - Pub. L. 94-455 struck out "or his delegate" after

"Secretary".

-End-

-CITE-

26 USC Sec. 7407 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter A - Civil Actions by the United States

-HEAD-

Sec. 7407. Action to enjoin income tax return preparers

-STATUTE-

(a) Authority to seek injunction

A civil action in the name of the United States to enjoin any

person who is an income tax return preparer from further engaging

in any conduct described in subsection (b) or from further action

as an income tax return preparer may be commenced at the request of

the Secretary. Any action under this section shall be brought in

the District Court of the United States for the district in which

the income tax preparer resides or has his principal place of

business or in which the taxpayer with respect to whose income tax

return the action is brought resides. The court may exercise its

jurisdiction over such action (as provided in section 7402(a))

separate and apart from any other action brought by the United

States against such income tax preparer or any taxpayer.

(b) Adjudication and decrees

In any action under subsection (a), if the court finds -

(1) that an income tax return preparer has -

(A) engaged in any conduct subject to penalty under section

6694 or 6695, or subject to any criminal penalty provided by

this title,

(B) misrepresented his eligibility to practice before the

Internal Revenue Service, or otherwise misrepresented his

experience or education as an income tax return preparer,

(C) guaranteed the payment of any tax refund or the allowance

of any tax credit, or

(D) engaged in any other fraudulent or deceptive conduct

which substantially interferes with the proper administration

of the Internal Revenue laws, and

(2) that injunctive relief is appropriate to prevent the

recurrence of such conduct,

the court may enjoin such person from further engaging in such

conduct. If the court finds that an income tax return preparer has

continually or repeatedly engaged in any conduct described in

subparagraphs (A) through (D) of this subsection and that an

injunction prohibiting such conduct would not be sufficient to

prevent such person's interference with the proper administration

of this title, the court may enjoin such person from acting as an

income tax return preparer.

-SOURCE-

(Added Pub. L. 94-455, title XII, Sec. 1203(g), Oct. 4, 1976, 90

Stat. 1693; amended Pub. L. 101-239, title VII, Sec. 7738(a), (b),

Dec. 19, 1989, 103 Stat. 2404.)

-MISC1-

PRIOR PROVISIONS

A prior section 7407 was renumbered section 7410 of this title.

AMENDMENTS

1989 - Subsec. (a). Pub. L. 101-239, Sec. 7738(b), substituted "A

civil" for "Except as provided in subsection (c), a civil".

Subsec. (c). Pub. L. 101-239, Sec. 7738(a), struck out subsec.

(c) relating to bonds to stay injunctions.

EFFECTIVE DATE OF 1989 AMENDMENT

Section 7738(c) of Pub. L. 101-239 provided that: "The amendments

made by this section [amending this section] shall apply to actions

commenced after December 31, 1989."

EFFECTIVE DATE

Section applicable to documents prepared after Dec. 31, 1976, see

section 1203(j) of Pub. L. 94-455, set out as an Effective Date of

1976 Amendment note under section 7701 of this title.

-End-

-CITE-

26 USC Sec. 7408 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter A - Civil Actions by the United States

-HEAD-

Sec. 7408. Action to enjoin promoters of abusive tax shelters, etc.

-STATUTE-

(a) Authority to seek injunction

A civil action in the name of the United States to enjoin any

person from further engaging in conduct subject to penalty under

section 6700 (relating to penalty for promoting abusive tax

shelters, etc.) or section 6701 (relating to penalties for aiding

and abetting understatement of tax liability) may be commenced at

the request of the Secretary. Any action under this section shall

be brought in the district court of the United States for the

district in which such person resides, has his principal place of

business, or has engaged in conduct subject to penalty under

section 6700 or section 6701. The court may exercise its

jurisdiction over such action (as provided in section 7402(a))

separate and apart from any other action brought by the United

States against such person.

(b) Adjudication and decree

In any action under subsection (a), if the court finds -

(1) that the person has engaged in any conduct subject to

penalty under section 6700 (relating to penalty for promoting

abusive tax shelters, etc.) or section 6701 (relating to

penalties for aiding and abetting understatement of tax

liability), and

(2) that injunctive relief is appropriate to prevent recurrence

of such conduct,

the court may enjoin such person from engaging in such conduct or

in any other activity subject to penalty under section 6700 or

section 6701.

(c) Citizens and residents outside the United States

If any citizen or resident of the United States does not reside

in, and does not have his principal place of business in, any

United States judicial district, such citizen or resident shall be

treated for purposes of this section as residing in the District of

Columbia.

-SOURCE-

(Added Pub. L. 97-248, title III, Sec. 321(a), Sept. 3, 1982, 96

Stat. 612; amended Pub. L. 98-369, div. A, title I, Sec. 143(b),

July 18, 1984, 98 Stat. 682.)

-MISC1-

PRIOR PROVISIONS

A prior section 7408 was renumbered section 7410 of this title.

AMENDMENTS

1984 - Subsec. (a). Pub. L. 98-369, Sec. 143(b)(1), (2), inserted

"or section 6701 (relating to penalties for aiding and abetting

understatement of tax liability)" and inserted reference to section

6701 at end of second sentence.

Subsec. (b). Pub. L. 98-369, Sec. 143(b)(1), (3), inserted "or

section 6701 (relating to penalties for aiding and abetting

understatement of tax liability)," in par. (1) and inserted

reference to section 6701 at end.

EFFECTIVE DATE OF 1984 AMENDMENT

Amendment by Pub. L. 98-369 effective on day after July 18, 1984,

see section 143(c) of Pub. L. 98-369, set out as a note under

section 6700 of this title.

EFFECTIVE DATE

Section 321(c) of Pub. L. 97-248 provided that: "The amendments

made by this section [enacting this section] shall take effect on

the day after the date of the enactment of this Act [Sept. 3,

1982]."

-End-

-CITE-

26 USC Sec. 7409 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter A - Civil Actions by the United States

-HEAD-

Sec. 7409. Action to enjoin flagrant political expenditures of

section 501(c)(3) organizations

-STATUTE-

(a) Authority to seek injunction

(1) In general

If the requirements of paragraph (2) are met, a civil action in

the name of the United States may be commenced at the request of

the Secretary to enjoin any section 501(c)(3) organization from

further making political expenditures and for such other relief

as may be appropriate to ensure that the assets of such

organization are preserved for charitable or other purposes

specified in section 501(c)(3). Any action under this section

shall be brought in the district court of the United States for

the district in which such organization has its principal place

of business or for any district in which it has made political

expenditures. The court may exercise its jurisdiction over such

action (as provided in section 7402(a)) separate and apart from

any other action brought by the United States against such

organization.

(2) Requirements

An action may be brought under subsection (a) only if -

(A) the Internal Revenue Service has notified the

organization of its intention to seek an injunction under this

section if the making of political expenditures does not

immediately cease, and

(B) the Commissioner of Internal Revenue has personally

determined that -

(i) such organization has flagrantly participated in, or

intervened in (including the publication or distribution of

statements), any political campaign on behalf of (or in

opposition to) any candidate for public office, and

(ii) injunctive relief is appropriate to prevent future

political expenditures.

(b) Adjudication and decree

In any action under subsection (a), if the court finds on the

basis of clear and convincing evidence that -

(1) such organization has flagrantly participated in, or

intervened in (including the publication or distribution of

statements), any political campaign on behalf of (or in

opposition to) any candidate for public office, and

(2) injunctive relief is appropriate to prevent future

political expenditures,

the court may enjoin such organization from making political

expenditures and may grant such other relief as may be appropriate

to ensure that the assets of such organization are preserved for

charitable or other purposes specified in section 501(c)(3).

(c) Definitions

For purposes of this section, the terms "section 501(c)(3)

organization" and "political expenditures" have the respective

meanings given to such terms by section 4955.

-SOURCE-

(Added Pub. L. 100-203, title X, Sec. 10713(a)(1), Dec. 22, 1987,

101 Stat. 1330-468.)

-MISC1-

PRIOR PROVISIONS

A prior section 7409 was renumbered section 7410 of this title.

-End-

-CITE-

26 USC Sec. 7410 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter A - Civil Actions by the United States

-HEAD-

Sec. 7410. Cross references

-STATUTE-

(1) For provisions for collecting taxes in general, see

chapter 64.

(2) For venue in a civil action for the collection of any

tax, see section 1396 of Title 28 of the United States Code.

(3) For venue of a proceeding for the recovery of any fine,

penalty, or forfeiture, see section 1395 of Title 28 of the

United States Code.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 875, Sec. 7407; renumbered Sec.

7408, Pub. L. 94-455, title XII, Sec. 1203(g), Oct. 4, 1976, 90

Stat. 1693; renumbered Sec. 7409, Pub. L. 97-248, title III, Sec.

321(a), Sept. 3, 1982, 96 Stat. 612; renumbered Sec. 7410, Pub. L.

100-203, title X, Sec. 10713(a)(1), Dec. 22, 1987, 101 Stat.

1330-468.)

-End-

-CITE-

26 USC Subchapter B - Proceedings by Taxpayers and Third

Parties 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter B - Proceedings by Taxpayers and Third Parties

-HEAD-

SUBCHAPTER B - PROCEEDINGS BY TAXPAYERS AND THIRD PARTIES

-MISC1-

Sec.

7421. Prohibition of suits to restrain assessment or

collection.

7422. Civil actions for refund.

7423. Repayments to officers or employees.

7424. Intervention.

7425. Discharge of liens.

7426. Civil actions by persons other than taxpayers.

7427. Income tax return preparers.

7428. Declaratory judgments relating to status and

classification of organizations under section

501(c)(3), etc.

7429. Review of jeopardy levy or assessment procedures.

7430. Awarding of costs and certain fees.

7431. Civil damages for unauthorized inspection or

disclosure of returns and return information.

7432. Civil damages for failure to release lien.

7433. Civil damages for certain unauthorized collection

actions.

7434. Civil damages for fraudulent filing of information

returns.

7435. Civil damages for unauthorized enticement of

information disclosure.

7436. Proceedings for determination of employment status.

7437. Cross references.

AMENDMENTS

1997 - Pub. L. 105-35, Sec. 3(d)(5), Aug. 5, 1997, 111 Stat.

1106, inserted "inspection or" before "disclosure" in item 7431.

Pub. L. 105-34, title XIV, Sec. 1454(b)(4), Aug. 5, 1997, 111

Stat. 1057, added items 7436 and 7437 and struck out former item

7436 "Cross references".

1996 - Pub. L. 104-168, title VI, Sec. 601(b), title XII, Sec.

1203(b), July 30, 1996, 110 Stat. 1462, 1471, added items 7434 and

7435 and redesignated former item 7434 as 7436.

1988 - Pub. L. 100-647, title VI, Secs. 6237(e)(4), 6239(c),

6240(b), 6241(c), Nov. 10, 1988, 102 Stat. 3743, 3746-3748,

inserted "levy or" after "jeopardy" in item 7429, struck out

"court" after "Awarding of" in item 7430, added items 7432 and

7433, and redesignated former item 7432 as 7434.

1982 - Pub. L. 97-248, title II, Sec. 292(d)(1), title III, Sec.

357(b)(3), Sept. 3, 1982, 96 Stat. 574, 646, added items 7430 and

7431 and redesignated former item 7430 as 7432.

1976 - Pub. L. 94-455, title XII, Secs. 1203(b)(2)(B),

1204(c)(13), title XIII, Sec. 1306(b)(6), Oct. 4, 1976, 90 Stat.

1690, 1699, 1719, added items 7427 to 7429 and redesignated former

item 7427 as 7430.

1966 - Pub. L. 89-719, title I, Sec. 110(d)(1), (2), Nov. 2,

1966, 80 Stat. 1145, inserted "and Third Parties" in subchapter

heading, substituted "Intervention" for "Civil action to clear

title to property" in item 7424, added items 7425 and 7426, and

redesignated former item 7425 as 7427.

-SECREF-

SUBCHAPTER REFERRED TO IN OTHER SECTIONS

This subchapter is referred to in section 6103 of this title.

-End-

-CITE-

26 USC Sec. 7421 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter B - Proceedings by Taxpayers and Third Parties

-HEAD-

Sec. 7421. Prohibition of suits to restrain assessment or

collection

-STATUTE-

(a) Tax

Except as provided in sections 6015(e), 6212(a) and (c), 6213(a),

6225(b), 6246(b), 6330(e)(1), 6331(i), 6672(c), 6694(c), and

7426(a) and (b)(1), 7429(b), and 7436, no suit for the purpose 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.

(b) Liability of transferee or fiduciary

No suit shall be maintained in any court for the purpose of

restraining the assessment or collection (pursuant to the

provisions of chapter 71) of -

(1) the amount of the liability, at law or in equity, of a

transferee of property of a taxpayer in respect of any internal

revenue tax, or

(2) the amount of the liability of a fiduciary under section

3713(b) of title 31, United States Code (!1) in respect of any

such tax.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 876; Pub. L. 89-719, title I,

Sec. 110(c), Nov. 2, 1966, 80 Stat. 1144; Pub. L. 94-455, title

XII, Sec. 1204(c)(11), Oct. 4, 1976, 90 Stat. 1699; Pub. L. 95-628,

Sec. 9(b)(1), Nov. 10, 1978, 92 Stat. 3633; Pub. L. 97-258, Sec.

3(f)(13), Sept. 13, 1982, 96 Stat. 1065; Pub. L. 105-34, title XII,

Secs. 1222(b)(1), 1239(e)(3), title XIV, Sec. 1454(b)(2), Aug. 5,

1997, 111 Stat. 1019, 1028, 1057; Pub. L. 105-206, title III, Sec.

3201(e)(3), July 22, 1998, 112 Stat. 740; Pub. L. 105-277, div. J,

title IV, Sec. 4002(c)(1), (f), Oct. 21, 1998, 112 Stat. 2681-906,

2681-907; Pub. L. 106-554, Sec. 1(a)(7) [title III, Secs.

313(b)(2)(B), 319(24)], Dec. 21, 2000, 114 Stat. 2763, 2763A-642,

2763A-647.)

-MISC1-

AMENDMENTS

2000 - Subsec. (a). Pub. L. 106-554 inserted "6330(e)(1)," after

"6246(b)," and substituted "6672(c)" for "6672(b)".

1998 - Subsec. (a). Pub. L. 105-277 substituted "6015(e)" for

"6015(d)" and inserted "6331(i)," after "6246(b),".

Pub. L. 105-206 inserted "6015(d)," after "sections".

1997 - Subsec. (a). Pub. L. 105-34, Sec. 1454(b)(2), substituted

"7429(b), and 7436" for "and 7429(b)".

Pub. L. 105-34, Sec. 1239(e)(3), inserted "6225(b)," after

"6213(a),".

Pub. L. 105-34, Sec. 1222(b)(1), inserted "6246(b)," after

"6213(a),".

1982 - Subsec. (b)(2). Pub. L. 97-258 substituted "section

3713(b) of title 31, United States Code" for "section 3467 of the

Revised Statutes (31 U.S.C. 192)".

1978 - Subsec. (a). Pub. L. 95-628 inserted references to

sections 6672(b) and 6694(c).

1976 - Subsec. (a). Pub. L. 94-455 substituted "7426(a) and

(b)(1), and 7429(b)" for "and 7426(a) and (b)(1)".

1966 - Subsec. (a). Pub. L. 89-719 inserted reference to section

7426(a), (b)(1), and "by any person, whether or not such person is

the person against whom such tax was assessed".

EFFECTIVE DATE OF 1998 AMENDMENTS

Amendment by Pub. L. 105-277 effective as if included in the

provision of the Internal Revenue Service Restructuring and Reform

Act of 1998, Pub. L. 105-206, to which such amendment relates, see

section 4002(k) of Pub. L. 105-277, set out as a note under section

1 of this title.

Amendment by Pub. L. 105-206 applicable to any liability for tax

arising after July 22, 1998, and any liability for tax arising on

or before such date but remaining unpaid as of such date, see

section 3201(g)(1) of Pub. L. 105-206, set out as a note under

section 6015 of this title.

EFFECTIVE DATE OF 1997 AMENDMENT

Amendment by section 1222(b)(1) of Pub. L. 105-34 applicable to

partnership taxable years beginning after Dec. 31, 1997, see

section 1226 of Pub. L. 105-34, as amended, set out as a note under

section 6011 of this title.

Amendment by section 1239(e)(3) of Pub. L. 105-34 applicable to

partnership taxable years ending after Aug. 5, 1997, see section

1239(f) of Pub. L. 105-34, set out as a note under section 6225 of

this title.

Amendment by section 1454(b)(2) of Pub. L. 105-34, effective Aug.

5, 1997, see section 1454(c) of Pub. L. 105-34, set out as a note

under section 6511 of this title.

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-628 applicable with respect to penalties

assessed more than 60 days after Nov. 10, 1978, see section 9(c) of

Pub. L. 95-628, set out as a note under section 6672 of this title.

EFFECTIVE DATE OF 1976 AMENDMENT

Amendment by Pub. L. 94-455 applicable with respect to action

taken under section 6851, 6861, or 6862 of this title where notice

and demand takes place after Feb. 28, 1977, see section 1204(d) of

Pub. L. 94-455, as amended, set out as a note under section 6851 of

this title.

EFFECTIVE DATE OF 1966 AMENDMENT

Amendment by Pub. L. 89-719 applicable after Nov. 2, 1966,

regardless of when title or lien of United States arose or when

lien or interest of another person was acquired, with certain

exceptions, see section 114(a)-(c) of Pub. L. 89-719, set out as a

note under section 6323 of this title.

PROHIBITION ON REQUESTS TO TAXPAYERS TO GIVE UP RIGHTS TO BRING

ACTIONS

Pub. L. 105-206, title III, Sec. 3468, July 22, 1998, 112 Stat.

770, provided that:

"(a) Prohibition. - No officer or employee of the United States

may request a taxpayer to waive the taxpayer's right to bring a

civil action against the United States or any officer or employee

of the United States for any action taken in connection with the

internal revenue laws.

"(b) Exceptions. - Subsection (a) shall not apply in any case

where -

"(1) a taxpayer waives the right described in subsection (a)

knowingly and voluntarily; or

"(2) the request by the officer or employee is made in person

and the taxpayer's attorney or other federally authorized tax

practitioner (within the meaning of section 7525(a)(3)(A) of the

Internal Revenue Code of 1986) is present, or the request is made

in writing to the taxpayer's attorney or other representative."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 4961, 6015, 6207, 6213,

6246, 6330, 6331, 6672, 6694, 6703, 6904 of this title.

-FOOTNOTE-

(!1) So in original. Probably should be followed by a comma.

-End-

-CITE-

26 USC Sec. 7422 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter B - Proceedings by Taxpayers and Third Parties

-HEAD-

Sec. 7422. Civil actions for refund

-STATUTE-

(a) No suit prior to filing claim for refund

No suit or proceeding shall be maintained in any court for the

recovery of any internal revenue tax alleged to have been

erroneously or illegally assessed or collected, or of any penalty

claimed to have been collected without authority, or of any sum

alleged to have been excessive or in any manner wrongfully

collected, until a claim for refund or credit has been duly filed

with the Secretary, according to the provisions of law in that

regard, and the regulations of the Secretary established in

pursuance thereof.

(b) Protest or duress

Such suit or proceeding may be maintained whether or not such

tax, penalty, or sum has been paid under protest or duress.

(c) Suits against collection officer a bar

A suit against any officer or employee of the United States (or

former officer or employee) or his personal representative for the

recovery of any internal revenue tax alleged to have been

erroneously or illegally assessed or collected, or of any penalty

claimed to have been collected without authority, or of any sum

alleged to have been excessive or in any manner wrongfully

collected shall be treated as if the United States had been a party

to such suit in applying the doctrine of res judicata in all suits

in respect of any internal revenue tax, and in all proceedings in

the Tax Court and on review of decisions of the Tax Court.

(d) Credit treated as payment

The credit of an overpayment of any tax in satisfaction of any

tax liability shall, for the purpose of any suit for refund of such

tax liability so satisfied, be deemed to be a payment in respect of

such tax liability at the time such credit is allowed.

(e) Stay of proceedings

If the Secretary prior to the hearing of a suit brought by a

taxpayer in a district court or the United States Court of Federal

Claims for the recovery of any income tax, estate tax, gift tax, or

tax imposed by chapter 41, 42, 43, or 44 (or any penalty relating

to such taxes) mails to the taxpayer a notice that a deficiency has

been determined in respect of the tax which is the subject matter

of taxpayer's suit, the proceedings in taxpayer's suit shall be

stayed during the period of time in which the taxpayer may file a

petition with the Tax Court for a redetermination of the asserted

deficiency, and for 60 days thereafter. If the taxpayer files a

petition with the Tax Court, the district court or the United

States Court of Federal Claims, as the case may be, shall lose

jurisdiction of taxpayer's suit to whatever extent jurisdiction is

acquired by the Tax Court of the subject matter of taxpayer's suit

for refund. If the taxpayer does not file a petition with the Tax

Court for a redetermination of the asserted deficiency, the United

States may counterclaim in the taxpayer's suit, or intervene in the

event of a suit as described in subsection (c) (relating to suits

against officers or employees of the United States), within the

period of the stay of proceedings notwithstanding that the time for

such pleading may have otherwise expired. The taxpayer shall have

the burden of proof with respect to the issues raised by such

counterclaim or intervention of the United States except as to the

issue of whether the taxpayer has been guilty of fraud with intent

to evade tax. This subsection shall not apply to a suit by a

taxpayer which, prior to the date of enactment of this title, is

commenced, instituted, or pending in a district court or the United

States Court of Federal Claims for the recovery of any income tax,

estate tax, or gift tax (or any penalty relating to such taxes).

(f) Limitation on right of action for refund

(1) General rule

A suit or proceeding referred to in subsection (a) may be

maintained only against the United States and not against any

officer or employee of the United States (or former officer or

employee) or his personal representative. Such suit or proceeding

may be maintained against the United States notwithstanding the

provisions of section 2502 of title 28 of the United States Code

(relating to aliens' privilege to sue) and notwithstanding the

provisions of section 1502 of such title 28 (relating to certain

treaty cases).

(2) Misjoinder and change of venue

If a suit or proceeding brought in a United States district

court against an officer or employee of the United States (or

former officer or employee) or his personal representative is

improperly brought solely by virtue of paragraph (1), the court

shall order, upon such terms as are just, that the pleadings be

amended to substitute the United States as a party for such

officer or employee as of the time such action commenced, upon

proper service of process on the United States. Such suit or

proceeding shall upon request by the United States be transferred

to the district or division where it should have been brought if

such action initially had been brought against the United States.

(g) Special rules for certain excise taxes imposed by chapter 42 or

43

(1) Right to bring actions

(A) In general

With respect to any taxable event, payment of the full amount

of the first tier tax shall constitute sufficient payment in

order to maintain an action under this section with respect to

the second tier tax.

(B) Definitions

For purposes of subparagraph (A), the terms "taxable event",

"first tier tax", and "second tier tax" have the respective

meanings given to such terms by section 4963.

(2) Limitation on suit for refund

No suit may be maintained under this section for the credit or

refund of any tax imposed under section 4941, 4942, 4943, 4944,

4945, 4951, 4952, 4955, 4958, 4971, or 4975 with respect to any

act (or failure to act) giving rise to liability for tax under

such sections, unless no other suit has been maintained for

credit or refund of, and no petition has been filed in the Tax

Court with respect to a deficiency in, any other tax imposed by

such sections with respect to such act (or failure to act).

(3) Final determination of issues

For purposes of this section, any suit for the credit or refund

of any tax imposed under section 4941, 4942, 4943, 4944, 4945,

4951, 4952, 4955, 4958, 4971, or 4975 with respect to any act (or

failure to act) giving rise to liability for tax under such

sections, shall constitute a suit to determine all questions with

respect to any other tax imposed with respect to such act (or

failure to act) under such sections, and failure by the parties

to such suit to bring any such question before the Court shall

constitute a bar to such question.

(h) Special rule for actions with respect to partnership items

No action may be brought for a refund attributable to partnership

items (as defined in section 6231(a)(3)) except as provided in

section 6228(b) or section 6230(c).

(i) Special rule for actions with respect to tax shelter promoter

and understatement penalties

No action or proceeding may be brought in the United States Court

of Federal Claims for any refund or credit of a penalty imposed by

section 6700 (relating to penalty for promoting abusive tax

shelters, etc.) or section 6701 (relating to penalties for aiding

and abetting understatement of tax liability).

(j) Special rule for actions with respect to estates for which an

election under section 6166 is made

(1) In general

The district courts of the United States and the United States

Court of Federal Claims shall not fail to have jurisdiction over

any action brought by the representative of an estate to which

this subsection applies to determine the correct amount of the

estate tax liability of such estate (or for any refund with

respect thereto) solely because the full amount of such liability

has not been paid by reason of an election under section 6166

with respect to such estate.

(2) Estates to which subsection applies

This subsection shall apply to any estate if, as of the date

the action is filed -

(A) no portion of the installments payable under section 6166

have been accelerated;

(B) all such installments the due date for which is on or

before the date the action is filed have been paid;

(C) there is no case pending in the Tax Court with respect to

the tax imposed by section 2001 on the estate and, if a notice

of deficiency under section 6212 with respect to such tax has

been issued, the time for filing a petition with the Tax Court

with respect to such notice has expired; and

(D) no proceeding for declaratory judgment under section 7479

is pending.

(3) Prohibition on collection of disallowed liability

If the court redetermines under paragraph (1) the estate tax

liability of an estate, no part of such liability which is

disallowed by a decision of such court which has become final may

be collected by the Secretary, and amounts paid in excess of the

installments determined by the court as currently due and payable

shall be refunded.

(k) Cross references

(1) For provisions relating generally to claims for refund or

credit, see chapter 65 (relating to abatements, credit, and

refund) and chapter 66 (relating to limitations).

(2) For duty of United States attorneys to defend suits, see

section 507 of Title 28 of the United States Code.

(3) For jurisdiction of United States district courts, see

section 1346 of Title 28 of the United States Code.

(4) For payment by the Treasury of judgments against internal

revenue officers or employees, upon certificate of probable

cause, see section 2006 of Title 28 of the United States Code.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 876; Pub. L. 85-866, title I,

Sec. 78, Sept. 2, 1958, 72 Stat. 1662; Pub. L. 89-713, Sec. 3(a),

Nov. 2, 1966, 80 Stat. 1108; Pub. L. 91-172, title I, Sec. 101(i),

(j)(56), Dec. 30, 1969, 83 Stat. 525, 532; Pub. L. 92-178, title

III, Sec. 309(a), Dec. 10, 1971, 85 Stat. 525; Pub. L. 93-406,

title II, Sec. 1016(a)(26), Sept. 2, 1974, 88 Stat. 931; Pub. L.

94-455, title XIII, Sec. 1307(d)(2)(F)(viii), title XVI, Sec.

1605(b)(11), title XIX, Sec. 1906(a)(44), (b)(13)(A), Oct. 4, 1976,

90 Stat. 1728, 1755, 1830, 1834; Pub. L. 96-222, title I, Sec.

108(b)(1)(D)-(F), Apr. 1, 1980, 94 Stat. 226; Pub. L. 96-223, title

I, Sec. 101(f)(1)(J), Apr. 2, 1980, 94 Stat. 252; Pub. L. 96-596,

Sec. 2(c)(2), Dec. 24, 1980, 94 Stat. 3474; Pub. L. 97-164, title

I, Sec. 151, Apr. 2, 1982, 96 Stat. 46; Pub. L. 97-248, title IV,

Sec. 402(c)(11), Sept. 3, 1982, 96 Stat. 668; Pub. L. 98-369, div.

A, title VII, Sec. 714(g)(1), (p)(2)(H), July 18, 1984, 98 Stat.

961, 965; Pub. L. 99-514, title XVIII, Sec. 1899A(58), Oct. 22,

1986, 100 Stat. 2961; Pub. L. 100-203, title X, Sec. 10712(c)(5),

Dec. 22, 1987, 101 Stat. 1330-467; Pub. L. 100-418, title I, Sec.

1941(b)(2)(B)(x), Aug. 23, 1988, 102 Stat. 1323; Pub. L. 102-572,

title IX, Sec. 902(b)(1), Oct. 29, 1992, 106 Stat. 4516; Pub. L.

104-168, title XIII, Sec. 1311(c)(4), July 30, 1996, 110 Stat.

1478; Pub. L. 105-206, title III, Sec. 3104(a), July 22, 1998, 112

Stat. 731.)

-REFTEXT-

REFERENCES IN TEXT

The date of enactment of this title, referred to in subsec. (e),

is Aug. 16, 1954.

-MISC1-

AMENDMENTS

1998 - Subsecs. (j), (k). Pub. L. 105-206 added subsec. (j) and

redesignated former subsec. (j) as (k).

1996 - Subsec. (g)(2), (3). Pub. L. 104-168 inserted "4958,"

after "4955,".

1992 - Subsecs. (e), (i). Pub. L. 102-572 substituted "United

States Court of Federal Claims" for "United States Claims Court"

wherever appearing.

1988 - Subsec. (e). Pub. L. 100-418 substituted "or 44" for "44,

or 45".

1987 - Subsec. (g)(2), (3). Pub. L. 100-203 inserted "4955,"

after "4952,".

1986 - Subsec. (g)(1)(B). Pub. L. 99-514 substituted "section

4963" for "section 4962".

1984 - Subsec. (h). Pub. L. 98-369, Sec. 714(p)(2)(H),

substituted "section 6231(a)(3)" for "section 6131(a)(3)".

Subsecs. (i), (j). Pub. L. 98-369, Sec. 714(g)(1), added subsec.

(i) and redesignated former subsec. (i) as (j).

1982 - Subsec. (e). Pub. L. 97-164 substituted "United States

Claims Court" for "Court of Claims" wherever appearing.

Subsecs. (h), (i). Pub. L. 97-248 added subsec. (h) and

redesignated former subsec. (h) as (i).

1980 - Subsec. (e). Pub. L. 96-223 inserted reference to chapter

45.

Subsec. (g). Pub. L. 96-596 substituted in par. (1) provision

authorizing, with respect to any taxable event, payment of the full

amount of the first tier tax as constituting sufficient payment in

order to maintain an action under this section with respect to the

second tier tax and defining the terms "taxable event", "first tier

tax", and "second tier tax" as having the respective meanings given

to such terms by section 4962 of this title for provision

authorizing, with respect to any act or failure to act giving rise

to liability under sections 4941, 4942, 4943, 4944, 4945, 4951,

4952, 4971, or 4975 of this title, payment of the full amount of

tax imposed under specified subsections of those sections as

constituting sufficient payment in order to maintain an action

under this section with respect to such act or failure to act.

Pub. L. 96-222 substituted in pars. (1) to (3) "4944, 4945, 4951,

4952" for "4944, 4945" and in par. (1) "section 4945(a) (relating

to initial taxes on taxable expenditures), section 4951(a)

(relating to initial taxes on self dealing), 4952(a) (relating to

initial taxes on taxable expenditures)" for "section 4945(a)

(relating to initial taxes on taxable expenditures)" and "section

4945(b) (relating to additional taxes on taxable expenditures),

section 4951(b) (relating to additional taxes on self-dealing),

4952(b) (relating to additional taxes on taxable expenditures)" for

"section 4945(b) (relating to additional taxes on taxable

expenditures)".

1976 - Subsec. (a). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck

out "or his delegate" after "Secretary".

Subsec. (c). Pub. L. 94-455, Sec. 1906(a)(44), struck out

"instituted after June 15, 1942," after "res judicata in all suits"

and "where the petition to the Tax Court was filed after such date"

after "decisions of the Tax Court".

Subsec. (e). Pub. L. 94-455, Secs. 1307(d)(2)(F)(viii),

1605(b)(11), 1906(b)(13)(A), struck out "or his delegate" after

"Secretary" and substituted "chapter 41, 42," for "chapter 42" and

"43, or 44" for "or 43".

1974 - Subsec. (e). Pub. L. 93-406, Sec. 1016(a)(26)(A),

substituted "chapter 42 or 43" for "chapter 42".

Subsec. (g). Pub. L. 93-406, Sec. 1016(a)(26)(B)-(F), substituted

"chapter 42 or 43" for "chapter 42" in heading, substituted "4945,

4971, or 4975" for "or 4945", "section 4945(a) (relating to initial

taxes on taxable expenditures), 4971(a) (relating to initial tax on

failure to meet minimum funding standard), 4975(a) (relating to

initial tax on prohibited transactions)" for "section 4945(a)

(relating to initial taxes on taxable expenditures)", and "section

4945(b) (relating to additional taxes on taxable expenditures),

section 4971(b) (relating to additional tax on failure to meet

minimum funding standard), or section 4975(b) (relating to

additional tax on prohibited transactions)" for "or section 4945(b)

(relating to additional taxes on taxable expenditures)" in par.

(1), and substituted "4945, 4971, or 4975" for "or 4945" in pars.

(2) and (3).

1971 - Subsec. (f)(1). Pub. L. 92-178 authorized maintenance of

suit or proceeding against the United States notwithstanding

provisions of section 1502 of Title 28 (relating to certain treaty

cases).

1969 - Subsec. (e). Pub. L. 91-172, Sec. 101(j)(56), inserted

reference to chapter 42 taxes.

Subsecs. (g), (h). Pub. L. 91-172, Sec. 101(i), added subsec. (g)

and redesignated former subsec. (g) as (h).

1966 - Subsecs. (f), (g). Pub. L. 89-713 added subsec. (f) and

redesignated former subsec. (f) as (g).

1958 - Subsec. (f)(2). Pub. L. 85-866 struck out "district"

before "attorneys".

EFFECTIVE DATE OF 1998 AMENDMENT

Pub. L. 105-206, title III, Sec. 3104(c), July 22, 1998, 112

Stat. 732, provided that: "The amendments made by this section

[amending this section and section 7479 of this title] shall apply

to any claim for refund filed after the date of the enactment of

this Act [July 22, 1998]."

EFFECTIVE DATE OF 1996 AMENDMENT

Amendment by Pub. L. 104-168 applicable to excess benefit

transactions occurring on or after Sept. 14, 1995 and not

applicable to any benefit arising from a transaction pursuant to

any written contract which was binding on Sept. 13, 1995, and at

all times thereafter before such transaction occurred, see section

1311(d)(1), (2) of Pub. L. 104-168, set out as a note under section

4955 of this title.

EFFECTIVE DATE OF 1992 AMENDMENT

Amendment by Pub. L. 102-572 effective Oct. 29, 1992, see section

911 of Pub. L. 102-572, set out as a note under section 171 of

Title 28, Judiciary and Judicial Procedure.

EFFECTIVE DATE OF 1988 AMENDMENT

Amendment by Pub. L. 100-418 applicable to crude oil removed from

the premises on or after Aug. 23, 1988, see section 1941(c) of Pub.

L. 100-418, set out as a note under section 164 of this title.

EFFECTIVE DATE OF 1987 AMENDMENT

Amendment by Pub. L. 100-203 applicable to taxable years

beginning after Dec. 22, 1987, see section 10712(d) of Pub. L.

100-203, set out as an Effective Date note under section 4955 of

this title.

EFFECTIVE DATE OF 1984 AMENDMENT

Amendment by section 714(g)(1) of Pub. L. 98-369 applicable to

any claim for refund or credit filed after July 18, 1984, see

section 714(g)(4) of Pub. L. 98-369, set out as an Effective Date

note under section 1509 of Title 28, Judiciary and Judicial

Procedure.

Amendment by section 714(p)(2)(H) of Pub. L. 98-369 effective as

if included in the provision of the Tax Equity and Fiscal

Responsibility Act of 1982, Pub. L. 97-248, to which such amendment

relates, see section 715 of Pub. L. 98-369, set out as a note under

section 31 of this title.

EFFECTIVE DATE OF 1982 AMENDMENT

Amendment by Pub. L. 97-248 applicable to partnership taxable

years beginning after Sept. 3, 1982, with provision for the

applicability of the amendment to any partnership taxable year

ending after Sept. 3, 1982, if the partnership, each partner, and

each indirect partner requests such application and the Secretary

of the Treasury or his delegate consents to such application, see

section 407(a)(1), (3) of Pub. L. 97-248, set out as an Effective

Date note under section 6221 of this title.

Amendment by Pub. L. 97-164 effective Oct. 1, 1982, see section

402 of Pub. L. 97-164, set out as a note under section 171 of Title

28, Judiciary and Judicial Procedure.

EFFECTIVE DATE OF 1980 AMENDMENTS

For effective date of amendment by Pub. L. 96-596 with respect to

any first tier tax and to any second tier tax, see section 2(d) of

Pub. L. 96-596, set out as an Effective Date note under section

4961 of this title.

Amendment by Pub. L. 96-223 applicable to periods after Feb. 29,

1980, see section 101(i) of Pub. L. 96-223, set out as a note under

section 6161 of this title.

Amendment by Pub. L. 96-222 effective as if included in the

provisions of the Black Lung Benefits Revenue Act of 1977, Pub. L.

95-227, see section 108(b)(4) of Pub. L. 96-222, set out as a note

under section 192 of this title.

EFFECTIVE DATE OF 1976 AMENDMENT

Amendment by section 1307(d)(2)(F)(viii) of Pub. L. 94-455

effective on and after Oct. 4, 1976, see section 1307(e)(6) of Pub.

L. 94-455, set out as a note under section 501 of this title.

For effective date of amendment by section 1605(b)(11) of Pub. L.

94-455, see section 1608(d) of Pub. L. 94-455, set out as a note

under section 856 of this title.

Amendment by section 1906(a)(44), (b)(13)(A) of Pub. L. 94-455

effective on first day of first month which begins more than 90

days after Oct. 4, 1976, see section 1906(d)(1) of Pub. L. 94-455,

set out as a note under section 6013 of this title.

EFFECTIVE DATE OF 1974 AMENDMENT

Amendment by Pub. L. 93-406 applicable, except as otherwise

provided in section 1017(c) through (i) of Pub. L. 93-406, for plan

years beginning after Sept. 2, 1974, and in the case of plans in

existence on Jan. 1, 1974, amendment by Pub. L. 93-406 applicable

for plan years beginning after Dec. 31, 1975, see section 1017 of

Pub. L. 93-406, set out as an Effective Date; Transitional Rules

note under section 410 of this title.

EFFECTIVE DATE OF 1971 AMENDMENT

Section 309(b) of Pub. L. 92-178 provided that: "The amendment

made by subsection (a) [amending this section] shall apply to suits

or proceedings which are instituted after January 30, 1967."

EFFECTIVE DATE OF 1969 AMENDMENT

Amendment by Pub. L. 91-172 effective Jan. 1, 1970, see section

101(k)(1) of Pub. L. 91-172, set out as an Effective Date note

under section 4940 of this title.

EFFECTIVE DATE OF 1966 AMENDMENT

Section 3(d) of Pub. L. 89-713 provided that: "The amendments

made by subsections (a) and (b) [amending this section and section

2502 of Title 28, Judiciary and Judicial Procedure] shall apply to

suits brought against officers, employees, or personal

representatives referred to therein which are instituted 90 days or

more after the date of the enactment of this Act [Nov. 2, 1966].

The amendment made by subsection (c) [amending section 7482 of this

title] shall apply to all decisions of the Tax Court entered after

the date of enactment of this Act."

EFFECTIVE DATE OF 1958 AMENDMENT

Amendment by Pub. L. 85-866 as effective Aug. 17, 1954, see

section 1(c)(2) of Pub. L. 85-866, set out as a note under section

165 of this title.

PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989

For provisions directing that if any amendments made by subtitle

A or subtitle C of title XI [Secs. 1101-1147 and 1171-1177] or

title XVIII [Secs. 1800-1899A] of Pub. L. 99-514 require an

amendment to any plan, such plan amendment shall not be required to

be made before the first plan year beginning on or after Jan. 1,

1989, see section 1140 of Pub. L. 99-514, as amended, set out as a

note under section 401 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 4961, 6228, 6234, 6532,

7426 of this title; title 28 section 2502.

-End-

-CITE-

26 USC Sec. 7423 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter B - Proceedings by Taxpayers and Third Parties

-HEAD-

Sec. 7423. Repayments to officers or employees

-STATUTE-

The Secretary, subject to regulations prescribed by the

Secretary, is authorized to repay -

(1) Collections recovered

To any officer or employee of the United States the full amount

of such sums of money as may be recovered against him in any

court, for any internal revenue taxes collected by him, with the

cost and expense of suit; also

(2) Damages and costs

All damages and costs recovered against any officer or employee

of the United States in any suit brought against him by reason of

anything done in the due performance of his official duty under

this title.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 877; Pub. L. 94-455, title XIX,

Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.)

-MISC1-

AMENDMENTS

1976 - Pub. L. 94-455 struck out "or his delegate" after

"Secretary" in provisions preceding par. (1).

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in title 5 section 3111.

-End-

-CITE-

26 USC Sec. 7424 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter B - Proceedings by Taxpayers and Third Parties

-HEAD-

Sec. 7424. Intervention

-STATUTE-

If the United States is not a party to a civil action or suit,

the United States may intervene in such action or suit to assert

any lien arising under this title on the property which is the

subject of such action or suit. The provisions of section 2410 of

title 28 of the United States Code (except subsection (b)) and of

section 1444 of title 28 of the United States Code shall apply in

any case in which the United States intervenes as if the United

States had originally been named a defendant in such action or

suit. In any case in which the application of the United States to

intervene is denied, the adjudication in such civil action or suit

shall have no effect upon such lien.

-SOURCE-

(Aug. 16, 1954, ch. 736, 68A Stat. 877; Pub. L. 89-719, title I,

Sec. 108, Nov. 2, 1966, 80 Stat. 1140.)

-MISC1-

AMENDMENTS

1966 - Pub. L. 89-719 substituted "Intervention" for "Civil

action to clear title to property" in section catchline and

substituted provisions, set out in a single paragraph, granting the

government authority to intervene in a court proceeding to assert

any lien arising under this title on property which is the subject

of a civil action or suit to which the government is not a party

with the same procedural rules to apply as where the government is

initially joined properly as a party and with the proceedings to

have no effect on the government's lien if the application to

intervene is denied, for provisions, formerly set out in three

subsections, setting out a procedure by which a person having a

lien upon or interest in property referred to in section 7403 could

file a civil action to clear title to the property and obtain an

adjudication of the matter involved in the same manner as in the

case of a civil action filed under section 7403.

EFFECTIVE DATE OF 1966 AMENDMENT

Amendment by Pub. L. 89-719 applicable after Nov. 2, 1966,

regardless of when the title or lien of the United States arose or

when the lien or interest of another person was acquired, with

certain exceptions, see section 114(a) to (c) of Pub. L. 89-719,

set out as a note under section 6323 of this title.

CIVIL ACTIONS TO CLEAR TITLE TO PROPERTY COMMENCED BEFORE NOV. 2,

1966

Section 114(d) of Pub. L. 89-719 provided that civil actions

commenced before Nov. 2, 1966, to clear title to property pursuant

to this section as in effect before Nov. 2, 1966, were to be

determined in accord with this section as in effect before Nov. 2,

1966.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in title 28 section 2409a.

-End-

-CITE-

26 USC Sec. 7425 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter B - Proceedings by Taxpayers and Third Parties

-HEAD-

Sec. 7425. Discharge of liens

-STATUTE-

(a) Judicial proceedings

If the United States is not joined as a party, a judgment in any

civil action or suit described in subsection (a) of section 2410 of

title 28 of the United States Code, or a judicial sale pursuant to

such a judgment, with respect to property on which the United

States has or claims a lien under the provisions of this title -

(1) shall be made subject to and without disturbing the lien of

the United States, if notice of such lien has been filed in the

place provided by law for such filing at the time such action or

suit is commenced, or

(2) shall have the same effect with respect to the discharge or

divestment of such lien of the United States as may be provided

with respect to such matters by the local law of the place where

such property is situated, if no notice of such lien has been

filed in the place provided by law for such filing at the time

such action or suit is commenced or if the law makes no provision

for such filing.

If a judicial sale of property pursuant to a judgment in any civil

action or suit to which the United States is not a party discharges

a lien of the United States arising under the provisions of this

title, the United States may claim, with the same priority as its

lien had against the property sold, the proceeds (exclusive of

costs) of such sale at any time before the distribution of such

proceeds is ordered.

(b) Other sales

Notwithstanding subsection (a) sale of property on which the

United States has or claims a lien, or a title derived from

enforcement of a lien, under the provisions of this title, made

pursuant to an instrument creating a lien on such property,

pursuant to a confession of judgment on the obligation secured by

such an instrument, or pursuant to a nonjudicial sale under a

statutory lien on such property -

(1) shall, except as otherwise provided, be made subject to and

without disturbing such lien or title, if notice of such lien was

filed or such title recorded in the place provided by law for

such filing or recording more than 30 days before such sale and

the United States is not given notice of such sale in the manner

prescribed in subsection (c)(1); or

(2) shall have the same effect with respect to the discharge or

divestment of such lien or such title of the United States, as

may be provided with respect to such matters by the local law of

the place where such property is situated, if -

(A) notice of such lien or such title was not filed or

recorded in the place provided by law for such filing more than

30 days before such sale,

(B) the law makes no provision for such filing, or

(C) notice of such sale is given in the manner prescribed in

subsection (c)(1).

(c) Special rules

(1) Notice of sale

Notice of a sale to which subsection (b) applies shall be given

(in accordance with regulations prescribed by the Secretary) in

writing, by registered or certified mail or by personal service,

not less than 25 days prior to such sale, to the Secretary.

(2) Consent to sale

Notwithstanding the notice requirement of subsection (b)(2)(C),

a sale described in subsection (b) of property shall discharge or

divest such property of the lien or title of the United States if

the United States consents to the sale of such property free of

such lien or title.

(3) Sale of perishable goods

Notwithstanding the notice requirement of subsection (b)(2)(C),

a sale described in subsection (b) of property liable to perish

or become greatly reduced in price or value by keeping, or which

cannot be kept without great expense, shall discharge or divest

such property of the lien or title of the United States if notice

of such sale is given (in accordance with regulations prescribed

by the Secretary) in writing, by registered or certified mail or

by personal service, to the Secretary before such sale. The

proceeds (exclusive of costs) of such sale shall be held as a

fund subject to the liens and claims of the United States, in the

same manner and with the same priority as such liens and claims

had with respect to the property sold, for not less than 30 days

after the date of such sale.

(4) Forfeitures of land sales contracts

For purposes of subsection (b), a sale of property includes any

forfeiture of a land sales contract.

(d) Redemption by United States

(1) Right to redeem

In the case of a sale of real property to which subsection (b)

applies to satisfy a lien prior to that of the United States, the

Secretary may redeem such property within the period of 120 days

from the date of such sale or the period allowable for redemption

under local law, whichever is longer.

(2) Amount to be paid

In any case in which the United States redeems real property

pursuant to paragraph (1), the amount to be paid for such

property shall be the amount prescribed by subsection (d) of

section 2410 of title 28 of the United States Code.

(3) Certificate of redemption

(A) In general

In any case in which real property is redeemed by the United

States pursuant to this subsection, the Secretary shall apply

to the officer designated by local law, if any, for the

documents necessary to evidence the fact of redemption and to

record title to such property in the name of the United States.

If no such officer is designated by local law or if such

officer fails to issue such documents, the Secretary shall

execute a certificate of redemption therefor.

(B) Filing

The Secretary shall, without delay, cause such documents or

certificate to be duly recorded in the proper registry of

deeds. If the State in which the real property redeemed by the

United States is situated has not by law designated an office

in which such certificate may be recorded, the Secretary shall

file such certificate in the office of the clerk of the United

States district court for the judicial district in which such

property is situated.

(C) Effect

A certificate of redemption executed by the Secretary shall

constitute prima facie evidence of the regularity of such

redemption and shall, when recorded, transfer to the United

States all the rights, title, and interest in and to such

property acquired by the person from whom the United States

redeems such property by virtue of the sale of such property.

-SOURCE-

(Added Pub. L. 89-719, title I, Sec. 109, Nov. 2, 1966, 80 Stat.

1141; amended Pub. L. 94-455, title XIX, Sec. 1906(b)(13)(A), Oct.

4, 1976, 90 Stat. 1834; Pub. L. 99-514, title XV, Sec. 1572(a),

Oct. 22, 1986, 100 Stat. 2765.)

-MISC1-

PRIOR PROVISIONS

A prior section 7425 was renumbered 7434 of this title.

AMENDMENTS

1986 - Subsec. (c)(4). Pub. L. 99-514 added par. (4).

1976 - Pub. L. 94-455 struck out "or his delegate" after

"Secretary" wherever appearing.

EFFECTIVE DATE OF 1986 AMENDMENT

Section 1572(b) of Pub. L. 99-514 provided that: "The amendment

made by subsection (a) [amending this section] shall apply to

forfeitures after the 30th day after the date of the enactment of

this Act [Oct. 22, 1986]."

EFFECTIVE DATE

Section applicable after Nov. 2, 1966, regardless of when title

or lien of United States arose or when lien or interest of another

person was acquired, with certain exceptions, see section

114(a)-(c) of Pub. L. 89-719, set out as an Effective Date of 1966

Amendment note under section 6323 of this title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in section 7810 of this title; title

28 section 2409a.

-End-

-CITE-

26 USC Sec. 7426 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter B - Proceedings by Taxpayers and Third Parties

-HEAD-

Sec. 7426. Civil actions by persons other than taxpayers

-STATUTE-

(a) Actions permitted

(1) Wrongful levy

If a levy has been made on property or property has been sold

pursuant to a levy, and any person (other than the person against

whom is assessed the tax out of which such levy arose) who claims

an interest in or lien on such property and that such property

was wrongfully levied upon may bring a civil action against the

United States in a district court of the United States. Such

action may be brought without regard to whether such property has

been surrendered to or sold by the Secretary.

(2) Surplus proceed

If property has been sold pursuant to a levy, any person (other

than the person against whom is assessed the tax out of which

such levy arose) who claims an interest in or lien on such

property junior to that of the United States and to be legally

entitled to the surplus proceeds of such sale may bring a civil

action against the United States in a district court of the

United States.

(3) Substituted sale proceeds

If property has been sold pursuant to an agreement described in

section 6325(b)(3) (relating to substitution of proceeds of

sale), any person who claims to be legally entitled to all or any

part of the amount held as a fund pursuant to such agreement may

bring a civil action against the United States in a district

court of the United States.

(4) Substitution of value

If a certificate of discharge is issued to any person under

section 6325(b)(4) with respect to any property, such person may,

within 120 days after the day on which such certificate is

issued, bring a civil action against the United States in a

district court of the United States for a determination of

whether the value of the interest of the United States (if any)

in such property is less than the value determined by the

Secretary. No other action may be brought by such person for such

a determination.

(b) Adjudication

The district court shall have jurisdiction to grant only such of

the following forms of relief as may be appropriate in the

circumstances:

(1) Injunction

If a levy or sale would irreparably injure rights in property

which the court determines to be superior to rights of the United

States in such property, the court may grant an injunction to

prohibit the enforcement of such levy or to prohibit such sale.

(2) Recovery of property

If the court determines that such property has been wrongfully

levied upon, the court may -

(A) order the return of specific property if the United

States is in possession of such property;

(B) grant a judgment for the amount of money levied upon; or

(C) if such property was sold, grant a judgment for an amount

not exceeding the greater of -

(i) the amount received by the United States from the sale

of such property, or

(ii) the fair market value of such property immediately

before the levy.

For the purposes of subparagraph (C), if the property was

declared purchased by the United States at a sale pursuant to

section 6335(e) (relating to manner and conditions of sale), the

United States shall be treated as having received an amount equal

to the minimum price determined pursuant to such section or (if

larger) the amount received by the United States from the resale

of such property.

(3) Surplus proceeds

If the court determines that the interest or lien of any party

to an action under this section was transferred to the proceeds

of a sale of such property, the court may grant a judgment in an

amount equal to all or any part of the amount of the surplus

proceeds of such sale.

(4) Substituted sale proceeds

If the court determines that a party has an interest in or lien

on the amount held as a fund pursuant to an agreement described

in section 6325(b)(3) (relating to substitution of proceeds of

sale), the court may grant a judgment in an amount equal to all

or any part of the amount of such fund.

(5) Substitution of value

If the court determines that the Secretary's determination of

the value of the interest of the United States in the property

for purposes of section 6325(b)(4) exceeds the actual value of

such interest, the court shall grant a judgment ordering a refund

of the amount deposited, and a release of the bond, to the extent

that the aggregate of the amounts thereof exceeds such value

determined by the court.

(c) Validity of assessment

For purposes of an adjudication under this section, the

assessment of tax upon which the interest or lien of the United

States is based shall be conclusively presumed to be valid.

(d) Limitation on rights of action

No action may be maintained against any officer or employee of

the United States (or former officer or employee) or his personal

representative with respect to any acts for which an action could

be maintained under this section.

(e) Substitution of United States as party

If an action, which could be brought against the United States

under this section, is improperly brought against any officer or

employee of the United States (or former officer or employee) or

his personal representative, the court shall order, upon such terms

as are just, that the pleadings be amended to substitute the United

States as a party for such officer or employee as of the time such

action was commenced upon proper service of process on the United

States.

(f) Provision inapplicable

The provisions of section 7422(a) (relating to prohibition of

suit prior to filing claim for refund) shall not apply to actions

under this section.

(g) Interest

Interest shall be allowed at the overpayment rate established

under section 6621 -

(1) In the case of a judgment pursuant to subsection (b)(2)(B),

from the date the Secretary receives the money wrongfully levied

upon to the date of payment of such judgment;

(2) in the case of a judgment pursuant to subsection (b)(2)(C),

from the date of the sale of the property wrongfully levied upon

to the date of payment of such judgment; and

(3) in the case of a judgment pursuant to subsection (b)(5)

which orders a refund of any amount, from the date the Secretary

received such amount to the date of payment of such judgment.

(h) Recovery of damages permitted in certain cases

(1) In general

Notwithstanding subsection (b), if, in any action brought under

this section, there is a finding that any officer or employee of

the Internal Revenue Service recklessly or intentionally, or by

reason of negligence, disregarded any provision of this title the

defendant shall be liable to the plaintiff in an amount equal to

the lesser of $1,000,000 ($100,000 in the case of negligence) or

the sum of -

(A) actual, direct economic damages sustained by the

plaintiff as a proximate result of the reckless or intentional

or negligent disregard of any provision of this title by the

officer or employee (reduced by any amount of such damages

awarded under subsection (b)); and

(B) the costs of the action.

(2) Requirement that administrative remedies be exhausted;

mitigation; period

The rules of section 7433(d) shall apply for purposes of this

subsection.

(3) Payment authority

Claims pursuant to this section shall be payable out of funds

appropriated under section 1304 of title 31, United States Code.

(i) Cross reference

For period of limitation, see section 6532(c).

-SOURCE-

(Added Pub. L. 89-719, title I, Sec. 110(a), Nov. 2, 1966, 80 Stat.

1142; amended Pub. L. 93-625, Sec. 7(a)(2)(E), Jan. 3, 1975, 88

Stat. 2115; Pub. L. 94-455, title XIX, Sec. 1906(b)(13)(A), Oct. 4,

1976, 90 Stat. 1834; Pub. L. 97-248, title III, Sec. 350(a), Sept.

3, 1982, 96 Stat. 639; Pub. L. 99-514, title XV, Sec. 1511(c)(16),

Oct. 22, 1986, 100 Stat. 2745; Pub. L. 105-206, title III, Secs.

3102(b), 3106(b)(1), (2), July 22, 1998, 112 Stat. 730, 733.)

-MISC1-

AMENDMENTS

1998 - Subsec. (a)(4). Pub. L. 105-206, Sec. 3106(b)(1), added

par. (4).

Subsec. (b)(5). Pub. L. 105-206, Sec. 3106(b)(2)(A), added par.

(5).

Subsec. (g)(3). Pub. L. 105-206, Sec. 3106(b)(2)(B), added par.

(3).

Subsecs. (h), (i). Pub. L. 105-206, Sec. 3102(b), added subsec.

(h) and redesignated former subsec. (h) as (i).

1986 - Subsec. (g). Pub. L. 99-514 substituted "the overpayment

rate established under section 6621" for "an annual rate

established under section 6621".

1982 - Subsec. (b)(2)(C). Pub. L. 97-248 inserted "if such

property was sold," before "grant a judgment" and "the greater of -

" after "not exceeding", redesignated remaining provisions as cl.

(i), and added cl. (ii).

1976 - Pub. L. 94-455 struck out "or his delegate" after

"Secretary" wherever appearing.

1975 - Subsec. (g). Pub. L. 93-625 substituted "an annual rate

established under section 6621" for "the rate of 6 percent per

annum".

EFFECTIVE DATE OF 1998 AMENDMENT

Pub. L. 105-206, title III, Sec. 3102(d), July 22, 1998, 112

Stat. 731, provided that: "The amendments made by this section

[amending this section and section 7433 of this title] shall apply

to actions of officers or employees of the Internal Revenue Service

after the date of the enactment of this Act [July 22, 1998]."

Amendment by section 3106(b)(1), (2) of Pub. L. 105-206 effective

July 22, 1998, see section 3106(c) of Pub. L. 105-206, set out as a

note under section 6325 of this title.

EFFECTIVE DATE OF 1986 AMENDMENT

Amendment by Pub. L. 99-514 applicable for purposes of

determining interest for periods after Dec. 31, 1986, see section

1511(d) of Pub. L. 99-514, set out as a note under section 47 of

this title.

EFFECTIVE DATE OF 1982 AMENDMENT

Section 350(b) of Pub. L. 97-248 provided that: "The amendment

made by subsection (a) [amending this section] shall apply with

respect to levies made after December 31, 1982."

EFFECTIVE DATE OF 1975 AMENDMENT

Amendment by Pub. L. 93-625 effective July 1, 1975, and

applicable to amounts outstanding on such date or arising

thereafter, see section 7(e) of Pub. L. 93-625, set out as an

Effective Date note under section 6621 of this title.

EFFECTIVE DATE

Section applicable after Nov. 2, 1966, regardless of when title

or lien of United States arose or when lien or interest of another

person was acquired, except in a case in which a lien or title

derived from enforcement of a lien held by United States has been

enforced by a civil action or suit which has become final by

judgment, sale, or agreement before Nov. 2, 1966, or in a case in

which section would impair a priority held by any person other than

United States holding a lien or interest prior to Nov. 2, 1966,

operate to increase liability of such person, or shorten time of

bringing suit with respect to transactions occurring before Nov. 2,

1966, see section 114(a)-(c) of Pub. L. 89-719, set out as

Effective Date of 1966 Amendments note under section 6323 of this

title.

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 6325, 6503, 6532, 7421 of

this title; title 28 sections 1346, 2409a.

-End-

-CITE-

26 USC Sec. 7427 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter B - Proceedings by Taxpayers and Third Parties

-HEAD-

Sec. 7427. Income tax return preparers

-STATUTE-

In any proceeding involving the issue of whether or not an income

tax return preparer has willfully attempted in any manner to

understate the liability for tax (within the meaning of section

6694(b)), the burden of proof in respect to such issue shall be

upon the Secretary.

-SOURCE-

(Added Pub. L. 94-455, title XII, Sec. 1203(b)(2)(A), Oct. 4, 1976,

90 Stat. 1690.)

-MISC1-

PRIOR PROVISIONS

A prior section 7427 was renumbered 7437 of this title.

-End-

-CITE-

26 USC Sec. 7428 01/06/03

-EXPCITE-

TITLE 26 - INTERNAL REVENUE CODE

Subtitle F - Procedure and Administration

CHAPTER 76 - JUDICIAL PROCEEDINGS

Subchapter B - Proceedings by Taxpayers and Third Parties

-HEAD-

Sec. 7428. Declaratory judgments relating to status and

classification of organizations under section 501(c)(3), etc.

-STATUTE-

(a) Creation of remedy

In a case of actual controversy involving -

(1) a determination by the Secretary -

(A) with respect to the initial qualification or continuing

qualification of an organization as an organization described

in section 501(c)(3) which is exempt from tax under section

501(a) or as an organization described in section 170(c)(2),

(B) with respect to the initial classification or continuing

classification of an organization as a private foundation (as

defined in section 509(a)), or

(C) with respect to the initial classification or continuing

classification of an organization as a private operating

foundation (as defined in section 4942(j)(3)), or

(2) a failure by the Secretary to make a determination with

respect to an issue referred to in paragraph (1),

upon the filing of an appropriate pleading, the United States Tax

Court, the United States Court of Federal Claims, or the district

court of the United States for the District of Columbia may make a

declaration with respect to such initial qualification or

continuing qualification or with respect to such initial

classification or continuing classification. Any such declaration

shall have the force and effect of a decision of the Tax Court or a

final judgment or decree of the district court or the Court of

Federal Claims, as the case may be, and shall be reviewable as

such. For purposes of this section, a determination with respect to

a continuing qualification or continuing classification includes

any revocation of or other change in a qualification or

classification.

(b) Limitations

(1) Petitioner

A pleading may be filed under this section only by the

organization the qualification or classification of which is at

issue.

(2) Exhaustion of administrative remedies

A declaratory judgment or decree under this section shall not

be issued in any proceeding unless the Tax Court, the Court of

Federal Claims, or the district court of the United States for

the District of Columbia determines that the organization

involved has exhausted administrative remedies available to it

within the Internal Revenue Service. An organization requesting

the determination of an issue referred to in subsection (a)(1)

shall be deemed to have exhausted its administrative remedies

with respect to a failure by the Secretary to make a

determination with respect to such issue at the expiration of 270

days after the date on which the request for such determination

was made if the organization has taken, in a timely manner, all

reasonable steps to secure such determination.

(3) Time for bringing action

If the Secretary sends by certified or registered mail notice

of his determination with respect to an issue referred to in

subsection (a)(1) to the organization referred to in paragraph

(1), no proceeding may be initiated under this section by such

organization unless the pleading is filed before the 91st day

after the date of such mailing.

(c) Validation of certain contributions made during pendency of

proceedings

(1) In general

If -

(A) the issue referred to in subsection (a)(1) involves the

revocation of a determination that the organization is

described in section 170(c)(2),

(B) a proceeding under this section is initiated within the

time provided by subsection (b)(3), and

(C) either -

(i) a decision of the Tax Court has become final (within

the meaning of section 7481), or

(ii) a judgment of the district court of the United States

for the District of Columbia has been entered, or

(iii) a judgment of the Court of Federal Claims, has been

entered,

and such decision or judgment, as the case may be, determines

that the organization was not described in section 170(c)(2),

then, notwithstanding such decision or judgment, such

organization shall be treated as having been described in section

170(c)(2) for purposes of section 170 for the period beginning on

the date on which the notice of the revocation was published and

ending on the date on which the court first determined in such

proceeding that the organization was not described in section

170(c)(2).

(2) Limitation

Paragraph (1) shall apply only -

(A) with respect to individuals, and only to the extent that

the aggregate of the contributions made by any individual to or

for the use of the organization during the period specified in

paragraph (1) does not exceed $1,000 (for this purpose treating

a husband and wife as one contributor), and

(B) with respect to organizations described in section

170(c)(2) which are exempt from tax under section 501(a) (for

this purpose excluding any such organization with respect to

which there is pending a proceeding to revoke the determination

under section 170(c)(2)).

(3) Exception

This subsection shall not apply to any individual who was

responsible, in whole or in part, for the activities (or failures

to act) on the part of the organization which were the basis for

the revocation.

(d) Subpoena power for district court for District of Columbia

In any action brought under this section in the district court of

the United States for the District of Columbia, a subpoena

requiring the attendance of a witness at a trial or hearing may be

served at any place in the United States.

-SOURCE-

(Added Pub. L. 94-455, title XIII, Sec. 1306(a), Oct. 4, 1976, 90

Stat. 1717; amended Pub. L. 95-600, title VII, Sec. 701(dd)(2),

Nov. 6, 1978, 92 Stat. 2924; Pub. L. 97-164, title I, Sec. 152,

Apr. 2, 1982, 96 Stat. 46; Pub. L. 98-369, div. A, title X, Sec.

1033(b), July 18, 1984, 98 Stat. 1039; Pub. L. 102-572, title IX,

Sec. 902(b), Oct. 29, 1992, 106 Stat. 4516.)

-MISC1-

PRIOR PROVISIONS

A prior section 7428 was renumbered 7437 of this title.

AMENDMENTS

1992 - Subsec. (a). Pub. L. 102-572 substituted "United States

Court of Federal Claims" for "United States Claims Court" and

"Court of Federal Claims" for "Claims Court" in concluding

provisions.

Subsecs. (b)(2), (c)(1)(C)(iii). Pub. L. 102-572, Sec. 902(b)(2),

substituted "Court of Federal Claims" for "Claims Court".

1984 - Subsec. (d). Pub. L. 98-369 added subsec. (d).

1982 - Subsecs. (a), (b)(2), (c)(1)(C)(iii). Pub. L. 97-164

substituted "Claims Court" for "Court of Claims".

1978 - Subsec. (a). Pub. L. 95-600 inserted provision relating to

change in qualification or classification.

EFFECTIVE DATE OF 1992 AMENDMENT

Amendment by Pub. L. 102-572 effective Oct. 29, 1992, see section

911 of Pub. L. 102-572, set out as a note under section 171 of

Title 28, Judiciary and Judicial Procedure.

EFFECTIVE DATE OF 1984 AMENDMENT

Amendment by Pub. L. 98-369 applicable with respect to inquiries

and examinations beginning after Dec. 31, 1984, see section 1033(d)

of Pub. L. 98-369, set out as an Effective Date note under section

7611 of this title.

EFFECTIVE DATE OF 1982 AMENDMENT

Amendment by Pub. L. 97-164 effective Oct. 1, 1982, see section

402 of Pub. L. 97-164, set out as a note under section 171 of Title

28, Judiciary and Judicial Procedure.

EFFECTIVE DATE OF 1978 AMENDMENT

Amendment by Pub. L. 95-600 effective as if included in this

section at the time section was added to this title, see section

701(dd)(3) of Pub. L. 95-600, set out as a note under section 7476

of this title.

EFFECTIVE DATE

Section 1306(c) of Pub. L. 94-455 provided that: "The amendments

made by this section [enacting this section and amending sections

7451, 7459, 7470, and 7482 of this title, enacting section 1507 of

Title 28, Judiciary and Judicial Procedure, and amending sections

1346 and 2201 of Title 28] shall apply with respect to pleadings

filed with the United States Tax Court, the district court of the

United States for the District of Columbia, or the United States

Court of Claims more than 6 months after the date of the enactment

of this Act [Oct. 4, 1976] but only with respect to determinations

(or requests for determinations) made after January 1, 1976."

-SECREF-

SECTION REFERRED TO IN OTHER SECTIONS

This section is referred to in sections 7451, 7459, 7482, 7611 of

this title; title 28 sections 1346, 1507, 2201.

-End-