CIVIL ACTION FOR RELEASE OF ERRONEOUS LIEN.

SEC. 3106. CIVIL ACTION FOR RELEASE OF ERRONEOUS LIEN. (a) Right of Substitution of Value.— Subsection (b) of section 6325 (relating to release of lien or discharge of property) is amended by adding at the end the following new paragraph: “(4) Right of substitution of value.— “(A) In general.— At the request of the owner of any property subject to any lien imposed by this chapter, the Secretary shall issue a certificate of discharge of such property if such owner— “(i) deposits with the Secretary an amount of money equal to the value of the interest of the United 112 STAT. 733States (as determined by the Secretary) in the property; or “(ii) furnishes a bond acceptable to the Secretary in a like amount. “(B) Refund of deposit with interest and release of bond.— The Secretary shall refund the amount so deposited (and shall pay interest at the overpayment rate under section 6621), and shall release such bond, to the extent that the Secretary determines that— “(i) the unsatisfied liability giving rise to the lien can be satisfied from a source other than such property; or “(ii) the value of the interest of the United States in the property is less than the Secretary’s prior determination of such value. “(C) Use of deposit, etc., if action to contest lien not filed.— If no action is filed under section 7426(a)(4) within the period prescribed therefor, the Secretary shall, within 60 days after the expiration of such period— “(i) apply the amount deposited, or collect on such bond, to the extent necessary to satisfy the unsatisfied liability secured by the lien; and “(ii) refund (with interest as described in subparagraph (B)) any portion of the amount deposited which is not used to satisfy such liability. “(D) Exception.— Subparagraph (A) shall not apply if the owner of the property is the person whose unsatisfied liability gave rise to the lien.”. (b) Civil Action To Release Erroneous Lien.— (1) In general.— Subsection (a) of section 7426 (relating to civil actions by persons other than taxpayers) is amended by adding at the end the following new paragraph: “(4) Substitution of value.— If 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.”. (2) Form of relief.— (A) In general.— Subsection (b) of section 7426 is amended by adding at the end the following new paragraph: “(5) Substitution of value.— If the court determines that the Secretary’s determination of the value of the interest of the United States in the property for purposes of section 6325(b)(4) exceeds the actual value of such interest, the court shall grant a judgment ordering a refund of the amount deposited, and a release of the bond, to the extent that the aggregate of the amounts thereof exceeds such value determined by the court.”. (B) Interest allowed on refund of deposit.— Subsection (g) of section 7426 is amended by striking “and” at the end of paragraph (1), by striking the period at the end of paragraph (2) and inserting “; and”, and by adding at the end the following new paragraph:112 STAT. 734 “(3) in the case of a judgment pursuant to subsection (b)(5) which orders a refund of any amount, from the date the Secretary received such amount to the date of payment of such judgment.”. (3) Suspension of running of statute of limitation.— Subsection (f) of section 6503 is amended to read as follows: “(f) Wrongful Seizure of or Lien on Property of Third Party.— “(1) Wrongful seisure.— The running of the period under section 6502 shall be suspended for a period equal to the period from the date property (including money) of a third party is wrongfully seized or received by the Secretary to the date the Secretary returns property pursuant to section 6343(b) or the date on which a judgment secured pursuant to section 7426 with respect to such property becomes final, and for 30 days thereafter. The running of such period shall be suspended under this paragraph only with respect to the amount of such assessment equal to the amount of money or the value of specific property returned. “(2) Wrongful lien.— In the case of any assessment for which a lien was made on any property, the running of the period under section 6502 shall be suspended for a period equal to the period beginning on the date any person becomes entitled to a certificate under section 6325(b)(4) with respect to such property and ending on the date which is 30 days after the earlier of— “(A) the earliest date on which the Secretary no longer holds any amount as a deposit or bond provided under section 6325(b)(4) by reason of such deposit or bond being used to satisfy the unpaid tax or being refunded or released; or “(B) the date that the judgment secured under section 7426(b)(5) becomes final. The running of such period shall be suspended under this paragraph only with respect to the amount of such assessment equal to the value of the interest of the United States in the property plus interest, penalties, additions to the tax, and additional amounts attributable thereto.”. (c) Effective Date.— The amendments made by this section shall take effect on the date of the enactment of this Act.