26 U.S.C. § 6335 — Sale of seized property

Page 3588 TITLE 26—INTERNAL REVENUE CODE § 6335 certain exceptions, see section 312(d) of Pub. L. 105–34, set out as a note under section 121 of this title. Pub. L. 105–34, title X, § 1025(b), Aug. 5, 1997, 111 Stat. 924, provided that: ‘‘The amendment made by sub- section (a) [amending this section] shall apply to levies issued after the date of the enactment of this Act [Aug. 5, 1997].’’ Amendment by Pub. L. 105–33 effective as if included in section 110 of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, Pub. L. 104–193, at the time such section 110 became law, see section 5518(c) of Pub. L. 105–33, set out as a note under section 51 of this title. EFFECTIVE DATE OF 1996 AMENDMENTS Amendment by section 110(l)(3) of Pub. L. 104–193 ef- fective July 1, 1997, with transition rules relating to State options to accelerate such date, rules relating to claims, actions, and proceedings commenced before such date, rules relating to closing out of accounts for terminated or substantially modified programs and continuance in office of Assistant Secretary for Family Support, and provisions relating to termination of enti- tlement under AFDC program, see section 116 of Pub. L. 104–193, as amended, set out as an Effective Date note under section 601 of Title 42, The Public Health and Welfare. Pub. L. 104–168, title V, § 502(d), July 30, 1996, 110 Stat. 1461, provided that: ‘‘The amendments made by this section [amending this section] shall take effect with respect to levies issued after December 31, 1996.’’ EFFECTIVE DATE OF 1988 AMENDMENT Pub. L. 100–647, title I, § 1015(o), Nov. 10, 1988, 102 Stat. 3572, provided that the amendment made by that sec- tion is effective with respect to levies made after Dec. 31, 1988. Amendment by section 6236(c) of Pub. L. 100–647 appli- cable to levies issued on or after July 1, 1989, see sec- tion 6236(h)(1) of Pub. L. 100–647, set out as a note under section 6331 of this title. EFFECTIVE DATE OF 1986 AMENDMENT Pub. L. 99–514, title XV, § 1565(b), Oct. 22, 1986, 100 Stat. 2763, provided that: ‘‘The amendment made by this section [amending this section] shall apply to amounts payable after December 31, 1986.’’ EFFECTIVE DATE OF 1984 AMENDMENT Amendment by Pub. L. 98–369 effective as though in- cluded in the enactment of the Social Security Amend- ments of 1983, Pub. L. 98–21, see section 2664(a) of Pub. L. 98–369, set out as a note under section 401 of Title 42, The Public Health and Welfare. EFFECTIVE DATE OF 1982 AMENDMENT Pub. L. 97–248, title III, § 347(b), Sept. 3, 1982, 96 Stat. 638, provided that: ‘‘The amendments made by sub- section (a) [amending this section] shall apply to levies made after December 31, 1982.’’ EFFECTIVE DATE OF 1976 AMENDMENT Pub. L. 94–455, title XII, § 1209(e), Oct. 4, 1976, 90 Stat. 1711, as amended by Pub. L. 94–528, § 2(c), Oct. 17, 1976, 90 Stat. 2483, provided that: ‘‘The amendments made by this section [amending this section and sections 6331 and 6332 of this title] shall apply only with respect to levies made after February 28, 1977.’’ EFFECTIVE DATE OF 1969 AMENDMENT Pub. L. 91–172, title IX, § 945(b), Dec. 30, 1969, 83 Stat. 729, provided that: ‘‘The amendment made by sub- section (a) [amending this section] shall apply with re- spect to levies made 30 days or more after the date of the enactment of this Act [Dec. 30, 1969].’’ 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 1965 AMENDMENT Pub. L. 89–44, title VIII, § 812(b), June 21, 1965, 79 Stat. 170, provided that: ‘‘The amendment made by sub- section (a) [amending this section] shall take effect on the date of the enactment of this Act [June 21, 1965].’’ TRANSFER OF FUNCTIONS For transfer of authorities, functions, personnel, and assets of the Coast Guard, including the authorities and functions of the Secretary of Transportation relat- ing thereto, to the Department of Homeland Security, and for treatment of related references, see sections 468(b), 551(d), 552(d), and 557 of Title 6, Domestic Secu- rity, and the Department of Homeland Security Reor- ganization Plan of November 25, 2002, as modified, set out as a note under section 542 of Title 6. STATE FISH AND WILDLIFE PERMITS Pub. L. 105–206, title III, § 3445(c), July 22, 1998, 112 Stat. 763, provided that: ‘‘(1) IN GENERAL.—With respect to permits issued by a State and required under State law for the harvest of fish or wildlife in the trade or business of an individual taxpayer, the term ‘other assets’ as used in section 6334(e)(2) of the Internal Revenue Code of 1986 shall in- clude future income which may be derived by such tax- payer from the commercial sale of fish or wildlife under such permit. ‘‘(2) CONSTRUCTION.—Paragraph (1) shall not be con- strued to invalidate or in any way prejudice any asser- tion that the privilege embodied in permits described in paragraph (1) is not property or a right to property under the Internal Revenue Code of 1986.’’ § 6335. Sale of seized property (a) Notice of seizure As soon as practicable after seizure of prop- erty, notice in writing shall be given by the Sec- retary to the owner of the property (or, in the case of personal property, the possessor thereof), or shall be left at his usual place of abode or business if he has such within the internal rev- enue district where the seizure is made. If the owner cannot be readily located, or has no dwelling or place of business within such dis- trict, the notice may be mailed to his last known address. Such notice shall specify the sum demanded and shall contain, in the case of personal property, an account of the property seized and, in the case of real property, a de- scription with reasonable certainty of the prop- erty seized. (b) Notice of sale The Secretary shall as soon as practicable after the seizure of the property give notice to the owner, in the manner prescribed in sub- section (a), and shall cause a notification to be published in some newspaper published or gen- erally circulated within the county wherein such seizure is made, or if there be no newspaper published or generally circulated in such coun- ty, shall post such notice at the post office near- est the place where the seizure is made, and in not less than two other public places. Such no- tice shall specify the property to be sold, and the time, place, manner, and conditions of the sale thereof. Whenever levy is made without re- gard to the 10-day period provided in section Page 3589 TITLE 26—INTERNAL REVENUE CODE § 6335 6331(a), public notice of sale of the property seized shall not be made within such 10-day pe- riod unless section 6336 (relating to sale of per- ishable goods) is applicable. (c) Sale of indivisible property If any property liable to levy is not divisible, so as to enable the Secretary by sale of a part thereof to raise the whole amount of the tax and expenses, the whole of such property shall be sold. (d) Time and place of sale The time of sale shall not be less than 10 days nor more than 40 days from the time of giving public notice under subsection (b). The place of sale shall be within the county in which the property is seized, except by special order of the Secretary. (e) Manner and conditions of sale (1) In general (A) Determinations relating to minimum price Before the sale of property seized by levy, the Secretary shall determine— (i) a minimum price below which such property shall not be sold (taking into ac- count the expense of making the levy and conducting the sale), and (ii) whether, on the basis of criteria pre- scribed by the Secretary, the purchase of such property by the United States at such minimum price would be in the best inter- est of the United States. (B) Sale to highest bidder at or above min- imum price If, at the sale, one or more persons offer to purchase such property for not less than the amount of the minimum price, the property shall be declared sold to the highest bidder. (C) Property deemed sold to United States at minimum price in certain cases If no person offers the amount of the min- imum price for such property at the sale and the Secretary has determined that the pur- chase of such property by the United States would be in the best interest of the United States, the property shall be declared to be sold to the United States at such minimum price. (D) Release to owner in other cases If, at the sale, the property is not declared sold under subparagraph (B) or (C), the prop- erty shall be released to the owner thereof and the expense of the levy and sale shall be added to the amount of tax for the collection of which the levy was made. Any property released under this subparagraph shall re- main subject to any lien imposed by sub- chapter C. (2) Additional rules applicable to sale The Secretary shall by regulations prescribe the manner and other conditions of the sale of property seized by levy. If one or more alter- native methods or conditions are permitted by regulations, the Secretary shall select the al- ternatives applicable to the sale. Such regula- tions shall provide: (A) That the sale shall not be conducted in any manner other than— (i) by public auction, or (ii) by public sale under sealed bids. (B) In the case of the seizure of several items of property, whether such items shall be offered separately, in groups, or in the ag- gregate; and whether such property shall be offered both separately (or in groups) and in the aggregate, and sold under whichever method produces the highest aggregate amount. (C) Whether the announcement of the min- imum price determined by the Secretary may be delayed until the receipt of the high- est bid. (D) Whether payment in full shall be re- quired at the time of acceptance of a bid, or whether a part of such payment may be de- ferred for such period (not to exceed 1 month) as may be determined by the Sec- retary to be appropriate. (E) The extent to which methods (includ- ing advertising) in addition to those pre- scribed in subsection (b) may be used in giv- ing notice of the sale. (F) Under what circumstances the Sec- retary may adjourn the sale from time to time (but such adjournments shall not be for a period to exceed in all 1 month). (3) Payment of amount bid If payment in full is required at the time of acceptance of a bid and is not then and there paid, the Secretary shall forthwith proceed to again sell the property in the manner provided in this subsection. If the conditions of the sale permit part of the payment to be deferred, and if such part is not paid within the prescribed period, suit may be instituted against the pur- chaser for the purchase price or such part thereof as has not been paid, together with in- terest at the rate of 6 percent per annum from the date of the sale; or, in the discretion of the Secretary, the sale may be declared by the Secretary to be null and void for failure to make full payment of the purchase price and the property may again be advertised and sold as provided in subsections (b) and (c) and this subsection. In the event of such readvertise- ment and sale any new purchaser shall receive such property or rights to property, free and clear of any claim or right of the former de- faulting purchaser, of any nature whatsoever, and the amount paid upon the bid price by such defaulting purchaser shall be forfeited. (4) Cross reference For provision providing for civil damages for vio- lation of paragraph (1)(A)(i), see section 7433. (f) Right to request sale of seized property with- in 60 days The owner of any property seized by levy may request that the Secretary sell such property within 60 days after such request (or within such longer period as may be specified by the owner). The Secretary shall comply with such request unless the Secretary determines (and notifies the owner within such period) that such compli- ance would not be in the best interests of the United States. Page 3590 TITLE 26—INTERNAL REVENUE CODE § 6336 (g) Stay of sale of seized property pending Tax Court decision For restrictions on sale of seized property pend- ing Tax Court decision, see section 6863(b)(3). (Aug. 16, 1954, ch. 736, 68A Stat. 785; Pub. L. 89–719, title I, § 104(d), Nov. 2, 1966, 80 Stat. 1137; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 99–514, title XV, § 1570(a), Oct. 22, 1986, 100 Stat. 2764; Pub. L. 100–647, title VI, § 6236(g), Nov. 10, 1988, 102 Stat. 3740; Pub. L. 105–206, title III, § 3441(a), (b), July 22, 1998, 112 Stat. 761.) Editorial Notes AMENDMENTS 1998—Subsec. (e)(1)(A)(i). Pub. L. 105–206, § 3441(a), substituted ‘‘a minimum price below which such prop- erty shall not be sold’’ for ‘‘a minimum price for which such property shall be sold’’. Subsec. (e)(4). Pub. L. 105–206, § 3441(b), added par. (4). 1988—Subsecs. (f), (g). Pub. L. 100–647 added subsec. (f) and redesignated former subsec. (f) as (g). 1986—Subsec. (e)(1). Pub. L. 99–514 amended par. (1) generally. Prior to amendment, par. (1) ‘‘Minimum price’’ read as follows: ‘‘Before the sale the Secretary shall determine a minimum price for which the prop- erty shall be sold, and if no person offers for such prop- erty at the sale the amount of the minimum price, the property shall be declared to be purchased at such price for the United States; otherwise the property shall be declared to be sold to the highest bidder. In deter- mining the minimum price, the Secretary shall take into account the expense of making the levy and sale.’’ 1976—Pub. L. 94–455 struck out ‘‘or his delegate’’ after ‘‘Secretary’’ wherever appearing. 1966—Subsec. (b). Pub. L. 89–719 inserted an alter- native to the publication of notice of sale to allow pub- lication in a newspaper generally circulated within the county in which the property is seized even though the newspaper is not published in such county. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1998 AMENDMENT Pub. L. 105–206, title III, § 3441(c), July 22, 1998, 112 Stat. 761, provided that: ‘‘The amendments made by this section [amending this section] shall apply to sales made after the date of the enactment of this Act [July 22, 1998].’’ EFFECTIVE DATE OF 1988 AMENDMENT Amendment by Pub. L. 100–647 applicable to requests made on or after Jan. 1, 1989, see section 6236(h)(2) of Pub. L. 100–647, set out as a note under section 6331 of this title. EFFECTIVE DATE OF 1986 AMENDMENT Pub. L. 99–514, title XV, § 1570(b), Oct. 22, 1986, 100 Stat. 2765, provided that: ‘‘The amendment made by subsection (a) [amending this section] shall apply to— ‘‘(1) property seized after the date of the enactment of this Act [Oct. 22, 1986], and ‘‘(2) property seized on or before such date which is held by the United States on such date.’’ 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. UNIFORM ASSET DISPOSAL MECHANISM Pub. L. 105–206, title III, § 3443, July 22, 1998, 112 Stat. 762, provided that: ‘‘Not later than the date which is 2 years after the date of the enactment of this Act [July 22, 1998], the Secretary of the Treasury or the Sec- retary’s delegate shall implement a uniform asset dis- posal mechanism for sales under section 6335 of the In- ternal Revenue Code of 1986. The mechanism should be designed to remove any participation in such sales by revenue officers of the Internal Revenue Service and should consider the use of outsourcing.’’ § 6336. Sale of perishable goods If the Secretary determines that any property seized is liable to perish, he shall appraise the value of such property and— (1) Return to owner If the owner of the property can be readily found, the Secretary shall give him notice of such determination of the appraised value of the property. The property shall be returned to the owner if, within such time as may be specified in the notice, the owner— (A) Pays to the Secretary an amount equal to the appraised value, or (B) Gives bond in such form, with such sureties, and in such amount as the Sec- retary shall prescribe, to pay the appraised amount at such time as the Secretary deter- mines to be appropriate in the cir- cumstances. (2) Immediate sale If the owner does not pay such amount or furnish such bond in accordance with this sec- tion, the Secretary shall as soon as prac- ticable make public sale of the property in ac- cordance with such regulations as may be pre- scribed by the Secretary. (Aug. 16, 1954, ch. 736, 68A Stat. 786; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 116–25, title I, § 1404(a), July 1, 2019, 133 Stat. 997.) Editorial Notes AMENDMENTS 2019—Pub. L. 116–25 struck out ‘‘or become greatly re- duced in price or value by keeping, or that such prop- erty cannot be kept without great expense’’ after ‘‘to perish’’ in introductory provisions. 1976—Pub. L. 94–455 struck out ‘‘or his delegate’’ after ‘‘Secretary’’ wherever appearing. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2019 AMENDMENT Pub. L. 116–25, title I, § 1404(b), July 1, 2019, 133 Stat. 997, provided that: ‘‘The amendment made by this sec- tion [amending this section] shall apply to property seized after the date of the enactment of this Act [July 1, 2019].’’ § 6337. Redemption of property (a) Before sale Any person whose property has been levied upon shall have the right to pay the amount due, together with the expenses of the pro- ceeding, if any, to the Secretary at any time prior to the sale thereof, and upon such payment the Secretary shall restore such property to him, and all further proceedings in connection with the levy on such property shall cease from the time of such payment.