2010 Tennessee Code
Title 67 - Taxes And Licenses
Chapter 1 - General Provisions
Part 14 - Tax Enforcement Procedures Act
67-1-1434 - Civil action by person other than taxpayer.  

67-1-1434. Civil action by person other than taxpayer.

(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 file a claim with the state board of claims.

     (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 state and to be legally entitled to the surplus proceeds of such sale may bring a civil action against the commissioner in chancery court.

     (3)  Substituted Sale Proceeds.  If property has been sold pursuant to an agreement whereby the commissioner has released that property from the liens and claims of the state of Tennessee in return for liens and claims of the same priority against the proceeds of the sale of the released property, any person who claims to be legally entitled to all or any amount of such substituted sale proceeds held as a fund pursuant to such agreement may bring a civil action against the commissioner in the chancery court.

(b)  Adjudication.  The chancery 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 that the court determines to be superior to rights of the state 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. 

          (A)  If the court determines that such property has been wrongfully levied upon, the court may:

                (i)  Order the return of specific property, if the state is in possession of such property;

                (ii)  Grant a judgment for the amount of money levied upon; or

                (iii)  Grant a judgment for an amount not exceeding the amount received by the state from the sale of such property;

          (B)  For purposes of subdivision (b)(2)(A)(iii), if the property was declared purchased by the state at a sale pursuant to § 67-1-1418(a), relating to manner and conditions of sale, the state 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 state 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; or

     (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, 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 purpose of an adjudication under this section, the assessment of tax upon which the interest or lien of the state 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 state, or former officer or employee, or the officer's or employee's personal representative with respect to any acts for which an action could be maintained under this section.

(e)  Requirements for Beginning or Proceeding with Action. 

     (1)  No suit or proceeding under this section shall be begun unless a request is made by certified mail, within nine (9) months of the date of the levy, for the return of money or property pursuant to § 67-1-1428.

     (2)  No suit or proceeding under this section shall be begun after twelve (12) months from the date of filing the request required under subdivision (e)(1) or after six (6) months from the date of mailing, by certified mail, of a notice to the person making the request, of disallowance by the commissioner or the commissioner's delegate, whichever period ends sooner.

[Acts 1972, ch. 762, § 20; 1981, ch. 65, § 3; T.C.A., § 67-6037.]