PROCEEDINGS BY THIRD PARTIES AGAINST THE UNITED STATES.

SEC. 110. PROCEEDINGS BY THIRD PARTIES AGAINST THE UNITED STATES. (a) Actions by Third Parties.—Subchapter B of chapter 76 (relating to proceedings by taxpayers) is amended by inserting after 80 Stat. 1143 section 7425 (as added by section 109 of this Act) the following new section: “SEC. 7426. CIVIL ACTIONS BY PERSONS OTHER THAN TAXPAYERS. “(a) Actions Permitted.— “(1) Wrongful levy.—If 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 or his delegate. “(2) Surplus proceeds.—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. “(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) grant a judgment for an amount not exceeding the amount received by the United States from the sale of such property. 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) (relat-80 Stat. 1144ing 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. “(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 rate of 6 percent per annum— “(1) in the case of a judgment pursuant to subsection (b) (2) (B), from the date the Secretary or his delegate receives the money wrongfully levied upon to the date of payment of such judgment; and “(2) in the case of a judgment pursuant to subsection (b) (2) ((’), from the date of the sale of the property wrongfully levied upon to the date of payment of such judgment. “(h) Cross Reference.— “For period of limitation, see section 6532(c).” (b) Period of Limitation on Suit.—Section 6532 (relating to period of limitation on suits) is amended by adding at the end thereof the following new subsection: “(c) Suits by Persons Other Than Taxpayers.— “(1) General rule.—Except as provided by paragraph (2), no suit or proceeding under section 7426 shall be begun after the expiration of 9 months from the date of the levy or agreement giving rise to such action. “(2) Period when claim is filed.—If a request is made for the return of property described in section 6343(b), the 9-month period prescribed in paragraph (1) shall be extended for a period of 12 months from the date of filing of such request or for a period of 6 months from the date of mailing by registered or certified mail by the Secretary or his delegate to the person making such request of a notice of disallowance of the part of the request to which the action relates, whichever is shorter.” (c) Prohibition of Suits To Restrain Assessment or Collection.—Section 7421(a) (relating to prohibition of suits to restrain assessment or collection of tax) is amended to read as follows: “(a) Tax.—Except as provided in sections 6212 (a) and (c), 6213(a), and 7426 (a) and (b) (1), 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.” 80 Stat. 1145 (d) Clerical Amendments.— (1) The heading of subchapter B of chapter 76 is amended to read as follows: “Subchapter B—Proceedings by Taxpayers and Third Parties” (2) The table of sections for subchapter B of chapter 76 is amended by striking out “Sec. 7424. Civil action to clear title to property.”. “Sec. 7425. Cross references.”. and inserting in lieu thereof “Sec. 7424. Intervention.”. “Sec. 7425. Discharge of liens.”. “Sec. 7426. Civil actions by persons other than taxpayers.”. “Sec. 7427. Cross references.”. “Sec. 7425. Cross references.”. (3) The table of subchapters for chapter 76 is amended by striking out “Subchapter B. Proceedings by Taxpayers.”. and inserting in lieu thereof “Subchapter B. Proceedings by Taxpayers and Third Parties”.