---
kind: "section"
citation: "26 U.S.C. § 7432"
title: "26"
title_heading: "Internal Revenue Code"
number: "7432"
heading: "Civil damages for failure to release lien"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/26/7432"
units:
  - "Subtitle F — Procedure and Administration"
  - "Chapter 76 — Judicial Proceedings"
  - "Subchapter B — Proceedings by Taxpayers and Third Parties"
---

# §7432. Civil damages for failure to release lien

- (a) **In general—** If any officer or [employee](/usc/26/7701.md?p=a-20) of the Internal Revenue Service knowingly, or by reason of negligence, fails to release a lien under [section 6325](/usc/26/6325.md) on property of the [taxpayer](/usc/26/7701.md?p=a-14), such [taxpayer](/usc/26/7701.md?p=a-14) may bring a civil action for damages against the [United States](/usc/26/7701.md?p=a-9) in a district court of the [United States](/usc/26/7701.md?p=a-9).
- (b) **Damages—** In any action brought under [subsection (a)](#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](/usc/31/1304.md), United States Code.
- (d) **Limitations—**
  - (1) **Requirement that administrative remedies be exhausted—** A judgment for damages shall not be awarded under [subsection (b)](#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)](#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](/usc/26/7701.md?p=a-11-B) shall by regulation prescribe reasonable procedures for a [taxpayer](/usc/26/7701.md?p=a-14) to notify the [Secretary](/usc/26/7701.md?p=a-11-B) of the failure to release a lien under [section 6325](/usc/26/6325.md) on property of the [taxpayer](/usc/26/7701.md?p=a-14).

## Source credit

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

## Notes

### Editorial Notes

### Prior Provisions

A prior section 7432 was renumbered 7437 of this title.

### Statutory Notes and Related Subsidiaries

### Effective Date

Pub. L. 100–647, title VI, § 6240(c), Nov. 10, 1988, 102 Stat. 3747, 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.”