---
kind: "section"
citation: "26 U.S.C. § 7433"
title: "26"
title_heading: "Internal Revenue Code"
number: "7433"
heading: "Civil damages for certain unauthorized collection actions"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/26/7433"
units:
  - "Subtitle F — Procedure and Administration"
  - "Chapter 76 — Judicial Proceedings"
  - "Subchapter B — Proceedings by Taxpayers and Third Parties"
---

# §7433. Civil damages for certain unauthorized collection actions

- (a) **In general—** If, in connection with any collection of Federal tax with respect to a [taxpayer](/usc/26/7701.md?p=a-14), any officer or [employee](/usc/26/7701.md?p=a-20) 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](/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). Except as provided in [section 7432](/usc/26/7432.md), such civil action shall be the exclusive remedy for recovering damages resulting from such actions.
- (b) **Damages—** In any action brought under [subsection (a)](#a) or petition filed under [subsection (e)](#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](/usc/26/7701.md?p=a-20), 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](/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) **Actions for violations of certain bankruptcy procedures—**
  - (1) **In general—** If, in connection with any collection of Federal tax with respect to a [taxpayer](/usc/26/7701.md?p=a-14), any officer or [employee](/usc/26/7701.md?p=a-20) of the Internal Revenue Service willfully violates any provision of [section 362](/usc/26/362.md) (relating to automatic stay) or 524 (relating to effect of discharge) of [title 11](/usc/11.md), United States Code (or any successor provision), or any regulation promulgated under such provision, such [taxpayer](/usc/26/7701.md?p=a-14) may petition the bankruptcy court to recover damages against the [United States](/usc/26/7701.md?p=a-9).
  - (2) **Remedy to be exclusive—**
    - (A) **In general—** Except as provided in [subparagraph (B)](#e-2-B), notwithstanding [section 105](/usc/26/105.md) of such [title 11](/usc/11.md), such petition shall be the exclusive remedy for recovering damages resulting from such actions.
    - (B) **Certain other actions permitted—** [Subparagraph (A)](#e-2-A) shall not apply to an action under [section 362(h)](/usc/26/362.md) of such [title 11](/usc/11.md) for a violation of a stay provided by [section 362](/usc/26/362.md) of such title; except that—
      - (i) administrative and litigation costs in connection with such an action may only be awarded under [section 7430](/usc/26/7430.md); and
      - (ii) administrative costs may be awarded only if incurred on or after the date that the bankruptcy petition is filed.

## Source credit

(Added Pub. L. 100–647, title VI, § 6241(a), Nov. 10, 1988, 102 Stat. 3747; amended Pub. L. 104–168, title VIII, §§ 801(a), 802(a), July 30, 1996, 110 Stat. 1465; Pub. L. 105–206, title III, § 3102(a), (c), July 22, 1998, 112 Stat. 730.)

## Notes

### Editorial Notes

### Prior Provisions

A prior section 7433 was renumbered 7437 of this title.

### Amendments

1998—Subsec. (a). Pub. L. 105–206, § 3102(a)(1)(A), inserted “, or by reason of negligence,” after “recklessly or intentionally”.

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

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

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

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

1996—Subsec. (b). Pub. L. 104–168, § 801(a), substituted “$1,000,000” for “$100,000”.

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

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

### Statutory Notes and Related Subsidiaries

### 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

Pub. L. 104–168, title VIII, § 801(b), July 30, 1996, 110 Stat. 1465, 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].”

Pub. L. 104–168, title VIII, § 802(b), July 30, 1996, 110 Stat. 1465, 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].”