§7434 — Title 26 Internal Revenue Code | U.S. Code

Summary

If someone on purpose files a fake tax form saying they paid you money when they did not, you can sue that person for money. If the court finds the filer lied, the filer must pay you the larger of $5,000 or the total of any actual losses you suffered because of the fake form (including costs to fix tax problems), the costs of the lawsuit, and, if the judge allows, reasonable lawyer fees. You can bring the case no matter how much money is at stake. You must file the lawsuit by the later of: 6 years after the fake form was filed, or 1 year after you would have found the fake form if you had used reasonable care. When you file, give a copy of the complaint to the IRS. The court’s decision must state the correct amount that should have been reported on the form. "Information return" means the kinds of statements listed in section 6724(d)(1)(A).

Title 26, §7434

Internal Revenue Code — Source: USLM XML via OLRC

(a)If any person willfully files a fraudulent information return with respect to payments purported to be made to any other person, such other person may bring a civil action for damages against the person so filing such return.

(b)In any action brought under subsection (a), 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 greater of $5,000 or the sum of—

(1)any actual damages sustained by the plaintiff as a proximate result of the filing of the fraudulent information return (including any costs attributable to resolving deficiencies asserted as a result of such filing),

(2)the costs of the action, and

(3)in the court’s discretion, reasonable attorneys’ fees.

(c)Notwithstanding any other provision of law, an action to enforce the liability created under this section may be brought without regard to the amount in controversy and may be brought only within the later of—

(1)6 years after the date of the filing of the fraudulent information return, or

(2)1 year after the date such fraudulent information return would have been discovered by exercise of reasonable care.

(d)Any person bringing an action under subsection (a) shall provide a copy of the complaint to the Internal Revenue Service upon the filing of such complaint with the court.

(e)The decision of the court awarding damages in an action brought under subsection (a) shall include a finding of the correct amount which should have been reported in the information return.

(f)For purposes of this section, the term “information return” means any statement described in section 6724(d)(1)(A).

Notes & Related Subsidiaries

Editorial Notes

Prior Provisions

A prior section 7434 was renumbered 7437 of this title.

Amendments

1998—Subsec. (b)(3). Pub. L. 105–206 substituted “attorneys’ fees” for “attorneys fees”.

Statutory Notes and Related Subsidiaries

Effective Date

Pub. L. 104–168, title VI, § 601(c), July 30, 1996, 110 Stat. 1462, provided that: “The

Amendments

made by this section [enacting this section and renumbering former section 7434 as 7435 of this title] shall apply to fraudulent information returns filed after the date of the enactment of this Act [July 30, 1996].”

§7434 Civil Damages for Fraudulent Filing of Information Returns

Summary

Title 26, §7434

Notes & Related Subsidiaries

Editorial Notes

Prior Provisions

Amendments

Statutory Notes and Related Subsidiaries

Effective Date

Amendments

Citations & Metadata