Civil Damages for Unauthorized Collection Actions
TAXPAYER BILL OF RIGHTS II
9. TITLE VIII--MODIFICATION TO RECOVERY OF CIVIL DAMAGES FOR UNAUTHORIZED COLLECTION ACTIONS
9.1. Increase In Limit On Recovery Of Civil Damages For Unauthorized Collection Actions. Under prior law, a taxpayer may sue the United States for up to $100,000 of damages caused by an officer or employee of the IRS who recklessly or intentionally
disregards provisions of the Internal Revenue Code or the Treasury regulations promulgated thereunder in connection with the collection of Federal tax with respect to the taxpayer. The new law increases the cap from $100,000 to $1 million. The provision
applies to unauthorized collection actions by IRS employees that occur after the date of enactment. TPBR2 §801. IRC §7433(b). SEC. 801 OF THE BILL
9.2. Court Discretion To Reduce Award For Litigation Costs For Failure To Exhaust Administrative Remedies. Under prior law, a taxpayer suing the United States for civil damages for unauthorized collection activities must exhaust
administrative remedies to be eligible for an award. The new law permits (but does not require) a court to reduce an award if the taxpayer has not exhausted administrative remedies. The provision is effective for proceedings commenced after the date of
enactment. TPBR2 §802. IRC §7433(d). SEC. 802 OF THE BILL
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