Civil Action for Wrongful Levy

§ 7426. Civil actions by persons other than taxpayers(a) Actions permitted(1) Wrongful levyIf a levy has been made on property or 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 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 proceedsIf 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 proceedsIf 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 valueIf 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) AdjudicationThe district court shall have jurisdiction to grant only such of the following forms of relief as may be appropriate in the circumstances:(1) InjunctionIf 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 propertyIf 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.