26 U.S.C. § 6325 — Release of lien or discharge of property

Page 3572 TITLE 26—INTERNAL REVENUE CODE § 6324B of Pub. L. 97–34, set out as a note under section 6166 of this title. EFFECTIVE DATE OF 1978 AMENDMENT Pub. L. 95–600, title VII, § 702(e)(2), Nov. 6, 1978, 92 Stat. 2930, provided that: ‘‘The amendments made by this section [amending this section] shall apply to the estates of decedents dying after December 31, 1976.’’ § 6324B. Special lien for additional estate tax at- tributable to farm, etc., valuation (a) General rule In the case of any interest in qualified real property (within the meaning of section 2032A(b)), an amount equal to the adjusted tax difference attributable to such interest (within the meaning of section 2032A(c)(2)(B)) shall be a lien in favor of the United States on the prop- erty in which such interest exists. (b) Period of lien The lien imposed by this section shall arise at the time an election is filed under section 2032A and shall continue with respect to any interest in the qualified real property— (1) until the liability for tax under sub- section (c) of section 2032A with respect to such interest has been satisfied or has become unenforceable by reason of lapse of time, or (2) until it is established to the satisfaction of the Secretary that no further tax liability may arise under section 2032A(c) with respect to such interest. (c) Certain rules and definitions made applicable (1) In general The rule set forth in paragraphs (1), (3), and (4) of section 6324A(d) shall apply with respect to the lien imposed by this section as if it were a lien imposed by section 6324A. (2) Qualified real property For purposes of this section, the term ‘‘qualified real property’’ includes qualified re- placement property (within the meaning of section 2032A(h)(3)(B)) and qualified exchange property (within the meaning of section 2032A(i)(3)). (d) Substitution of security for lien To the extent provided in regulations pre- scribed by the Secretary, the furnishing of secu- rity may be substituted for the lien imposed by this section. (Added Pub. L. 94–455, title XX, § 2003(b), Oct. 4, 1976, 90 Stat. 1861; amended Pub. L. 95–600, title VII, § 702(r)(4), Nov. 6, 1978, 92 Stat. 2939; Pub. L. 96–222, title I, § 108(d), Apr. 1, 1980, 94 Stat. 228; Pub. L. 97–34, title IV, § 421(d)(2)(B), Aug. 13, 1981, 95 Stat. 309.) Editorial Notes AMENDMENTS 1981—Subsec. (c)(2). Pub. L. 97–34 defined ‘‘qualified real property’’ to include qualified exchange property (within the meaning of section 2032A(i)(3)). 1980—Subsec. (c). Pub. L. 96–222 designated existing provisions as par. (1), substituted ‘‘The rule’’ for ‘‘The rules’’, and added par. (2). 1978—Subsec. (b). Pub. L. 95–600 substituted ‘‘qualified real property’’ for ‘‘qualified farm real property’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1981 AMENDMENT Amendment by Pub. L. 97–34 applicable with respect to exchanges after Dec. 31, 1981, see section 421(k)(3) of Pub. L. 97–34, set out as a note under section 2032A of this title. EFFECTIVE DATE OF 1980 AMENDMENT Amendment by Pub. L. 96–222 effective, except as oth- erwise provided, as if it had been included in the provi- sions of the Revenue Act of 1978, Pub. L. 95–600, to which such amendment relates, see section 201 of Pub. L. 96–222, set out as a note under section 32 of this title. EFFECTIVE DATE OF 1978 AMENDMENT Amendment by Pub. L. 95–600 applicable to estates of decedents dying after Dec. 31, 1976, see section 702(r)(5) of Pub. L. 95–600, set out as a note under section 2051 of this title. § 6325. Release of lien or discharge of property (a) Release of lien Subject to such regulations as the Secretary may prescribe, the Secretary shall issue a cer- tificate of release of any lien imposed with re- spect to any internal revenue tax not later than 30 days after the day on which— (1) Liability satisfied or unenforceable The Secretary finds that the liability for the amount assessed, together with all interest in respect thereof, has been fully satisfied or has become legally unenforceable; or (2) Bond accepted There is furnished to the Secretary and ac- cepted by him a bond that is conditioned upon the payment of the amount assessed, together with all interest in respect thereof, within the time prescribed by law (including any exten- sion of such time), and that is in accordance with such requirements relating to terms, con- ditions, and form of the bond and sureties thereon, as may be specified by such regula- tions. (b) Discharge of property (1) Property double the amount of the liability Subject to such regulations as the Secretary may prescribe, the Secretary may issue a cer- tificate of discharge of any part of the prop- erty subject to any lien imposed under this chapter if the Secretary finds that the fair market value of that part of such property re- maining subject to the lien is at least double the amount of the unsatisfied liability secured by such lien and the amount of all other liens upon such property which have priority over such lien. (2) Part payment; interest of United States val- ueless Subject to such regulations as the Secretary may prescribe, the Secretary may issue a cer- tificate of discharge of any part of the prop- erty subject to the lien if— (A) there is paid over to the Secretary in partial satisfaction of the liability secured by the lien an amount determined by the Secretary, which shall not be less than the value, as determined by the Secretary, of the interest of the United States in the part to be so discharged, or Page 3573 TITLE 26—INTERNAL REVENUE CODE § 6325 (B) the Secretary determines at any time that the interest of the United States in the part to be so discharged has no value. In determining the value of the interest of the United States in the part to be so discharged, the Secretary shall give consideration to the value of such part and to such liens thereon as have priority over the lien of the United States. (3) Substitution of proceeds of sale Subject to such regulations as the Secretary may prescribe, the Secretary may issue a cer- tificate of discharge of any part of the prop- erty subject to the lien if such part of the property is sold and, pursuant to an agreement with the Secretary, the proceeds of such sale are to be held, as a fund subject to the liens and claims of the United States, in the same manner and with the same priority as such liens and claims had with respect to the dis- charged property. (4) Right of substitution of value (A) In general At the request of the owner of any prop- erty subject to any lien imposed by this chapter, the Secretary shall issue a certifi- cate 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 States (as deter- mined 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 re- lease of bond The Secretary shall refund the amount so deposited (and shall pay interest at the over- payment 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 ex- piration of such period— (i) apply the amount deposited, or col- lect 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 sat- isfy 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. (c) Estate or gift tax Subject to such regulations as the Secretary may prescribe, the Secretary may issue a cer- tificate of discharge of any or all of the property subject to any lien imposed by section 6324 if the Secretary finds that the liability secured by such lien has been fully satisfied or provided for. (d) Subordination of lien Subject to such regulations as the Secretary may prescribe, the Secretary may issue a cer- tificate of subordination of any lien imposed by this chapter upon any part of the property sub- ject to such lien if— (1) there is paid over to the Secretary an amount equal to the amount of the lien or in- terest to which the certificate subordinates the lien of the United States, (2) the Secretary believes that the amount realizable by the United States from the prop- erty to which the certificate relates, or from any other property subject to the lien, will ul- timately be increased by reason of the issuance of such certificate and that the ulti- mate collection of the tax liability will be fa- cilitated by such subordination, or (3) in the case of any lien imposed by section 6324B, if the Secretary determines that the United States will be adequately secured after such subordination. (e) Nonattachment of lien If the Secretary determines that, because of confusion of names or otherwise, any person (other than the person against whom the tax was assessed) is or may be injured by the appear- ance that a notice of lien filed under section 6323 refers to such person, the Secretary may issue a certificate that the lien does not attach to the property of such person. (f) Effect of certificate (1) Conclusiveness Except as provided in paragraphs (2) and (3), if a certificate is issued pursuant to this sec- tion by the Secretary and is filed in the same office as the notice of lien to which it relates (if such notice of lien has been filed) such cer- tificate shall have the following effect: (A) in the case of a certificate of release, such certificate shall be conclusive that the lien referred to in such certificate is extin- guished; (B) in the case of a certificate of discharge, such certificate shall be conclusive that the property covered by such certificate is dis- charged from the lien; (C) in the case of a certificate of subordi- nation, such certificate shall be conclusive that the lien or interest to which the lien of the United States is subordinated is superior to the lien of the United States; and (D) in the case of a certificate of non- attachment, such certificate shall be conclu- sive that the lien of the United States does not attach to the property of the person re- ferred to in such certificate. (2) Revocation of certificate of release or non- attachment If the Secretary determines that a certifi- cate of release or nonattachment of a lien im- Page 3574 TITLE 26—INTERNAL REVENUE CODE § 6326 posed by section 6321 was issued erroneously or improvidently, or if a certificate of release of such lien was issued pursuant to a collateral agreement entered into in connection with a compromise under section 7122 which has been breached, and if the period of limitation on collection after assessment has not expired, the Secretary may revoke such certificate and reinstate the lien— (A) by mailing notice of such revocation to the person against whom the tax was as- sessed at his last known address, and (B) by filing notice of such revocation in the same office in which the notice of lien to which it relates was filed (if such notice of lien had been filed). Such reinstated lien (i) shall be effective on the date notice of revocation is mailed to the taxpayer in accordance with the provisions of subparagraph (A), but not earlier than the date on which any required filing of notice of revocation is filed in accordance with the pro- visions of subparagraph (B), and (ii) shall have the same force and effect (as of such date), until the expiration of the period of limitation on collection after assessment, as a lien im- posed by section 6321 (relating to lien for taxes). (3) Certificates void under certain conditions Notwithstanding any other provision of this subtitle, any lien imposed by this chapter shall attach to any property with respect to which a certificate of discharge has been issued if the person liable for the tax re- acquires such property after such certificate has been issued. (g) Filing of certificates and notices If a certificate or notice issued pursuant to this section may not be filed in the office des- ignated by State law in which the notice of lien imposed by section 6321 is filed, such certificate or notice shall be effective if filed in the office of the clerk of the United States district court for the judicial district in which such office is situated. (h) Cross reference For provisions relating to bonds, see chapter 73 (sec. 7101 and following). (Aug. 16, 1954, ch. 736, 68A Stat. 783; Pub. L. 85–866, title I, § 77, Nov. 2, 1966, 72 Stat. 1662; Pub. L. 89–719, title I, § 103(a), Nov. 2, 1966, 80 Stat. 1133; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 95–600, title V, § 513(a), Nov. 6, 1978, 92 Stat. 2883; Pub. L. 97–248, title III, § 348(a), Sept. 3, 1982, 96 Stat. 638; Pub. L. 105–206, title III, § 3106(a), July 22, 1998, 112 Stat. 732.) Editorial Notes AMENDMENTS 1998—Subsec. (b)(4). Pub. L. 105–206 added par. (4). 1982—Subsec. (a). Pub. L. 97–248 in introductory provi- sions substituted ‘‘shall issue’’ for ‘‘may issue’’ and ‘‘not later than 30 days after the day on which’’ for ‘‘if’’. 1978—Subsec. (d)(3). Pub. L. 95–600 added par. (3). 1976—Pub. L. 94–455 struck out ‘‘or his delegate’’ after ‘‘Secretary’’ wherever appearing. 1966—Subsec. (b)(3). Pub. L. 89–719 added par. (3). Subsecs. (d), (e). Pub. L. 89–719 added subsecs. (d) and (e). Former subsecs. (d) and (e) redesignated, with amendments, as subsecs. (f)(1) and (h), respectively. Subsec. (f). Pub. L. 89–719 redesignated as par. (1) pro- visions formerly constituting subsec. (d), inserted ref- erence to exceptions provided in pars. (2) and (3) and reference to the filing of the certificate in the same of- fice as the notice of lien to which it refers and ex- panded the types of certificates to include separate cer- tificates of release, discharge, subordination, and non- attachment, and added pars. (2) and (3). Subsec. (g). Pub. L. 89–719 added subsec. (g). Subsec. (h). Pub. L. 89–719 redesignated as subsec. (h) provisions formerly constituting subsec. (e) and struck out cross references for single bonds, suits to enforce liens, and suits to clear title to realty. 1958—Subsec. (a)(1). Pub. L. 85–866, § 77(1), substituted ‘‘or’’ for ‘‘,’’ after ‘‘satisfied’’ and struck out ‘‘, or, in the case of the estate tax imposed by chapter 11 or the gift tax imposed by chapter 12, has been fully satisfied or provided for’’ after ‘‘unenforceable’’. Subsec. (c). Pub. L. 85–866, § 77(2), added subsec. (c) and redesignated former subsec. (c) as (d). Subsec. (d). Pub. L. 85–866. § 77(2), (3), redesignated former subsec. (c) as (d) and in heading and text struck out ‘‘partial’’ before ‘‘discharge’’. Former subsec. (d) re- designated (e). Subsec. (e). Pub. L. 85–866, § 77(2), redesignated former subsec. (d) as (e). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1998 AMENDMENT Pub. L. 105–206, title III, § 3106(c), July 22, 1998, 112 Stat. 734, provided that: ‘‘The amendments made by this section [amending this section and sections 6503 and 7426 of this title] shall take effect on the date of the enactment of this Act [July 22, 1998].’’ EFFECTIVE DATE OF 1982 AMENDMENT Pub. L. 97–248, title III, § 348(b), Sept. 3, 1982, 96 Stat. 638, provided that: ‘‘The amendment made by sub- section (a) [amending this section] shall apply with re- spect to liens— ‘‘(1) which are filed after December 31, 1982, ‘‘(2) which are satisfied after December 31, 1982, or ‘‘(3) with respect to which the taxpayer after De- cember 31, 1982, requests the Secretary of the Treas- ury or his delegate to issue a certificate of release on the grounds that the liability was satisfied or legally unenforceable.’’ EFFECTIVE DATE OF 1978 AMENDMENT Pub. L. 95–600, title V, § 513(b), Nov. 6, 1978, 92 Stat. 2883, provided that: ‘‘The amendments made by sub- section (a) [amending this section] shall apply with re- spect to the estates of decedents dying after December 31, 1976.’’ EFFECTIVE DATE OF 1966 AMENDMENT Amendment by Pub. L. 89–719 applicable after Nov. 2, 1966, regardless of when title or lien of United States arose or when lien or interest of another person was ac- quired, with certain exceptions, see section 114(a)–(c) of Pub. L. 89–719, set out as a note under section 6323 of this title. EFFECTIVE DATE OF 1958 AMENDMENT Amendment by Pub. L. 85–866 effective Aug. 17, 1954, see section 1(c)(2) of Pub. L. 85–866, set out as a note under section 165 of this title. § 6326. Administrative appeal of liens (a) In general In such form and at such time as the Sec- retary shall prescribe by regulations, any person