26 U.S.C. § 6343 — Authority to release levy and return prop-

Page 3593 TITLE 26—INTERNAL REVENUE CODE § 6343 (Aug. 16, 1954, ch. 736, 68A Stat. 789; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.) Editorial Notes AMENDMENTS 1976—Pub. L. 94–455 struck out ‘‘or his delegate’’ after ‘‘Secretary’’. § 6342. Application of proceeds of levy (a) Collection of liability Any money realized by proceedings under this subchapter (whether by seizure, by surrender under section 6332 (except pursuant to sub- section (d)(2) thereof), or by sale of seized prop- erty) or by sale of property redeemed by the United States (if the interest of the United States in such property was a lien arising under the provisions of this title) shall be applied as follows: (1) Expense of levy and sale First, against the expenses of the pro- ceedings; (2) Specific tax liability on seized property If the property seized and sold is subject to a tax imposed by any internal revenue law which has not been paid, the amount remain- ing after applying paragraph (1) shall then be applied against such tax liability (and, if such tax was not previously assessed, it shall then be assessed); (3) Liability of delinquent taxpayer The amount, if any, remaining after apply- ing paragraphs (1) and (2) shall then be applied against the liability in respect of which the levy was made or the sale was conducted. (b) Surplus proceeds Any surplus proceeds remaining after the ap- plication of subsection (a) shall, upon applica- tion and satisfactory proof in support thereof, be credited or refunded by the Secretary to the per- son or persons legally entitled thereto. (Aug. 16, 1954, ch. 736, 68A Stat. 789; Pub. L. 89–719, title I, § 104(h), Nov. 2, 1966, 80 Stat. 1137; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 115–141, div. U, title IV, § 401(a)(284), Mar. 23, 2018, 132 Stat. 1198.) Editorial Notes AMENDMENTS 2018—Subsec. (a). Pub. L. 115–141 substituted ‘‘sub- section (d)(2)’’ for ‘‘subsection (c)(2)’’ in introductory provisions. 1976—Pub. L. 94–455 struck out ‘‘or his delegate’’ after ‘‘Secretary’’ wherever appearing. 1966—Subsec. (a). Pub. L. 89–719 inserted in introduc- tory provisions, references to an exception in the case of surrender under section 6332(c)(2) and to sale of prop- erty redeemed by the United States if the interest of the United States in such property was a lien arising under the provisions of this title, struck out ‘‘under this subchapter’’ after ‘‘proceedings’’ in par. (1), and in- serted ‘‘or the sale was conducted’’ after ‘‘levy was made’’ in par. (3). Statutory Notes and Related Subsidiaries 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. § 6343. Authority to release levy and return prop- erty (a) Release of levy and notice of release (1) In general Under regulations prescribed by the Sec- retary, the Secretary shall release the levy upon all, or part of, the property or rights to property levied upon and shall promptly no- tify the person upon whom such levy was made (if any) that such levy has been released if— (A) the liability for which such levy was made is satisfied or becomes unenforceable by reason of lapse of time, (B) release of such levy will facilitate the collection of such liability, (C) the taxpayer has entered into an agree- ment under section 6159 to satisfy such li- ability by means of installment payments, unless such agreement provides otherwise, (D) the Secretary has determined that such levy is creating an economic hardship due to the financial condition of the tax- payer, or (E) the fair market value of the property exceeds such liability and release of the levy on a part of such property could be made without hindering the collection of such li- ability. For purposes of subparagraph (C), the Sec- retary is not required to release such levy if such release would jeopardize the secured creditor status of the Secretary. (2) Expedited determination on certain busi- ness property In the case of any tangible personal property essential in carrying on the trade or business of the taxpayer, the Secretary shall provide for an expedited determination under para- graph (1) if levy on such tangible personal property would prevent the taxpayer from car- rying on such trade or business. (3) Subsequent levy The release of levy on any property under paragraph (1) shall not prevent any subsequent levy on such property. (b) Return of property If the Secretary determines that property has been wrongfully levied upon, it shall be lawful for the Secretary to return— (1) the specific property levied upon, (2) an amount of money equal to the amount of money levied upon, or (3) an amount of money equal to the amount of money received by the United States from a sale of such property. Property may be returned at any time. An amount equal to the amount of money levied upon or received from such sale may be returned at any time before the expiration of 2 years from the date of such levy. For purposes of paragraph (3), if property is declared purchased by the United States at a sale pursuant to section 6335(e) (relating to manner and conditions of Page 3594 TITLE 26—INTERNAL REVENUE CODE § 6343 1 So in original. Probably should be followed by a comma. sale), the United States shall be treated as hav- ing received an amount of money equal to the minimum price determined pursuant to such section or (if larger) the amount received by the United States from the resale of such property. (c) Interest Interest shall be allowed and paid at the over- payment rate established under section 6621— (1) in a case described in subsection (b)(2), from the date the Secretary receives the money to a date (to be determined by the Sec- retary) preceding the date of return by not more than 30 days, or (2) in a case described in subsection (b)(3), from the date of the sale of the property to a date (to be determined by the Secretary) pre- ceding the date of return by not more than 30 days. (d) Return of property in certain cases If— (1) any property has been levied upon, and (2) the Secretary determines that— (A) the levy on such property was pre- mature or otherwise not in accordance with administrative procedures of the Secretary, (B) the taxpayer has entered into an agree- ment under section 6159 to satisfy the tax li- ability for which the levy was imposed by means of installment payments, unless such agreement provides otherwise, (C) the return of such property will facili- tate the collection of the tax liability, or (D) with the consent of the taxpayer or the National Taxpayer Advocate, the return of such property would be in the best interests of the taxpayer (as determined by the Na- tional Taxpayer Advocate) and the United States, the provisions of subsection (b) shall apply in the same manner as if such property had been wrongly levied upon, except that no interest shall be allowed under subsection (c). (e) Release of levy upon agreement that amount is not collectible In the case of a levy on the salary or wages payable to or received by the taxpayer, upon agreement with the taxpayer that the tax is not collectible, the Secretary shall release such levy as soon as practicable. (f) Individuals held harmless on wrongful levy, etc.1 on retirement plan (1) In general If the Secretary determines that an individ- ual’s account or benefit under an eligible re- tirement plan (as defined in section 402(c)(8)(B)) has been levied upon in a case to which subsection (b) or (d)(2)(A) applies and property or an amount of money is returned to the individual— (A) the individual may contribute such property or an amount equal to the sum of— (i) the amount of money so returned by the Secretary, and (ii) interest paid under subsection (c) on such amount of money, into such eligible retirement plan if such contribution is permitted by the plan, or into an individual retirement plan (other than an endowment contract) to which a rollover contribution of a distribution from such eligible retirement plan is permitted, but only if such contribution is made not later than the due date (not including exten- sions) for filing the return of tax for the tax- able year in which such property or amount of money is returned, and (B) the Secretary shall, at the time such property or amount of money is returned, notify such individual that a contribution described in subparagraph (A) may be made. (2) Treatment as rollover The distribution on account of the levy and any contribution under paragraph (1) with re- spect to the return of such distribution shall be treated for purposes of this title as if such distribution and contribution were described in section 402(c), 402A(c)(3), 403(a)(4), 403(b)(8), 408(d)(3), 408A(d)(3), or 457(e)(16), whichever is applicable; except that— (A) the contribution shall be treated as having been made for the taxable year in which the distribution on account of the levy occurred, and the interest paid under subsection (c) shall be treated as earnings within the plan after the contribution and shall not be included in gross income, and (B) such contribution shall not be taken into account under section 408(d)(3)(B). (3) Refund, etc., of income tax on levy (A) In general If any amount is includible in gross in- come for a taxable year by reason of a dis- tribution on account of a levy referred to in paragraph (1) and any portion of such amount is treated as a rollover contribution under paragraph (2), any tax imposed by chapter 1 on such portion shall not be as- sessed, and if assessed shall be abated, and if collected shall be credited or refunded as an overpayment made on the due date for filing the return of tax for such taxable year. (B) Exception Subparagraph (A) shall not apply to a roll- over contribution under this subsection which is made from an eligible retirement plan which is not a Roth IRA or a designated Roth account (within the meaning of section 402A) to a Roth IRA or a designated Roth ac- count under an eligible retirement plan. (4) Interest Notwithstanding subsection (d), interest shall be allowed under subsection (c) in a case in which the Secretary makes a determination described in subsection (d)(2)(A) with respect to a levy upon an individual retirement plan. (5) Treatment of inherited accounts For purposes of paragraph (1)(A), section 408(d)(3)(C) shall be disregarded in determining whether an individual retirement plan is a plan to which a rollover contribution of a dis- tribution from the plan levied upon is per- mitted. Page 3595 TITLE 26—INTERNAL REVENUE CODE § 6344 (Aug. 16, 1954, ch. 736, 68A Stat. 789; Pub. L. 89–719, title I, § 104(i), Nov. 2, 1966, 80 Stat. 1138; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 96–167, § 4(a), Dec. 29, 1979, 93 Stat. 1275; Pub. L. 99–514, title XV, § 1511(c)(10), Oct. 22, 1986, 100 Stat. 2745; Pub. L. 100–647, title VI, § 6236(f), Nov. 10, 1988, 102 Stat. 3740; Pub. L. 104–168, title V, § 501(b), July 30, 1996, 110 Stat. 1460; Pub. L. 105–206, title I, § 1102(d)(1)(B), title III, § 3432(a), July 22, 1998, 112 Stat. 704, 759; Pub. L. 115–97, title I, § 11071(a), Dec. 22, 2017, 131 Stat. 2091; Pub. L. 115–123, div. D, title II, § 41104(a), Feb. 9, 2018, 132 Stat. 155.) Editorial Notes AMENDMENTS 2018—Subsec. (f). Pub. L. 115–123 added subsec. (f). 2017—Subsec. (b). Pub. L. 115–97 substituted ‘‘2 years’’ for ‘‘9 months’’ in concluding provisions. 1998—Subsec. (d)(2)(D). Pub. L. 105–206, § 1102(d)(1)(B), substituted ‘‘National Taxpayer Advocate’’ for ‘‘Tax- payer Advocate’’ in two places. Subsec. (e). Pub. L. 105–206, § 3432(a), added subsec. (e). 1996—Subsec. (d). Pub. L. 104–168 added subsec. (d). 1988—Subsec. (a). Pub. L. 100–647 inserted ‘‘and notice of release’’ after ‘‘levy’’ in heading and amended text generally. Prior to amendment, text read as follows: ‘‘It shall be lawful for the Secretary, under regulations prescribed by the Secretary, to release the levy upon all or part of the property or rights to property levied upon where the Secretary determines that such action will facilitate the collection of the liability, but such release shall not operate to prevent any subsequent levy.’’ 1986—Subsec. (c). Pub. L. 99–514 substituted ‘‘the over- payment rate established under section 6621’’ for ‘‘an annual rate established under section 6621’’. 1979—Subsec. (c). Pub. L. 96–167 added subsec. (c). 1976—Pub. L. 94–455 struck out ‘‘or his delegate’’ after ‘‘Secretary’’ wherever appearing. 1966—Pub. L. 89–719 inserted ‘‘and return property’’ in section catchline, designated existing provisions as subsec. (a), and added subsec. (b). Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2018 AMENDMENT Pub. L. 115–123, div. D, title II, § 41104(b), Feb. 9, 2018, 132 Stat. 157, provided that: ‘‘The amendment made by this section [amending this section] shall apply to amounts paid under subsections (b), (c), and (d)(2)(A) of section 6343 of the Internal Revenue Code of 1986 in tax- able years beginning after December 31, 2017.’’ EFFECTIVE DATE OF 2017 AMENDMENT Pub. L. 115–97, title I, § 11071(c), Dec. 22, 2017, 131 Stat. 2092, provided that: ‘‘The amendments made by this section [amending this section and section 6532 of this title] shall apply to— ‘‘(1) levies made after the date of the enactment of this Act [Dec. 22, 2017], and ‘‘(2) levies made on or before such date if the 9- month period has not expired under section 6343(b) of the Internal Revenue Code of 1986 (without regard to this section) as of such date.’’ EFFECTIVE DATE OF 1998 AMENDMENT Amendment by section 1102 of Pub. L. 105–206 effec- tive July 22, 1998, see section 1102(f) of Pub. L. 105–206, set out as a note under section 7803 of this title. Pub. L. 105–206, title III, § 3432(b), July 22, 1998, 112 Stat. 759, provided that: ‘‘The amendment made by this section [amending this section] shall apply to levies imposed after December 31, 1999.’’ EFFECTIVE DATE OF 1988 AMENDMENT Amendment by Pub. L. 100–647 applicable to levies issued on or after July 1, 1989, see section 6236(h)(1) of Pub. L. 100–647, set out as a note under section 6331 of this title. EFFECTIVE DATE OF 1986 AMENDMENT Amendment by Pub. L. 99–514 applicable for purposes of determining interest for periods after Dec. 31, 1986, see section 1511(d) of Pub. L. 99–514, set out as a note under section 47 of this title. EFFECTIVE DATE OF 1979 AMENDMENT Pub. L. 96–167, § 4(c)(1), Dec. 29, 1979, 93 Stat. 1276, pro- vided that: ‘‘The amendment made by subsection (a) [amending this section] shall apply to levies made after the date of the enactment of this Act [Dec. 29, 1979].’’ 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. § 6344. Cross references (a) Length of period For period within which levy may be begun in case of— (1) Income, estate, and gift taxes, and taxes im- posed by chapter 41, 42, 43, or 44, see sections 6502(a) and 6503(a)(1). (2) Employment and miscellaneous excise taxes, see section 6502(a). (b) Delinquent collection officers For distraint proceedings against delinquent in- ternal revenue officers, see section 7804(c). (c) Other references For provisions relating to— (1) Stamps, marks and brands, see section 6807. (2) Administration of real estate acquired by the United States, see section 7506. (Aug. 16, 1954, ch. 736, 68A Stat. 789; Pub. L. 91–172, title I, § 101(j)(45), Dec. 30, 1969, 83 Stat. 531; Pub. L. 93–406, title II, § 1016(a)(13), Sept. 2, 1974, 88 Stat. 930; Pub. L. 94–455, title XIII, § 1307(d)(2)(F)(v), title XVI, § 1605(b)(8), Oct. 4, 1976, 90 Stat. 1728, 1755; Pub. L. 96–223, title I, § 101(f)(1)(I), Apr. 2, 1980, 94 Stat. 252; Pub. L. 100–418, title I, § 1941(b)(2)(B)(ix), Aug. 23, 1988, 102 Stat. 1323; Pub. L. 105–206, title I, § 1104(b)(1), July 22, 1998, 112 Stat. 710.) Editorial Notes AMENDMENTS 1998—Subsec. (b). Pub. L. 105–206 substituted ‘‘section 7804(c)’’ for ‘‘section 7803(d)’’. 1988—Subsec. (a)(1). Pub. L. 100–418 substituted ‘‘or 44’’ for ‘‘44, or 45’’. 1980—Subsec. (a)(1). Pub. L. 96–223 inserted reference to chapter 45. 1976—Subsec. (a)(1). Pub. L. 94–455 inserted reference to chapters 41 and 44. 1974—Subsec. (a)(1). Pub. L. 93–406 inserted reference to chapter 43. 1969—Subsec. (a)(1). Pub. L. 91–172 inserted reference to chapter 42. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1988 AMENDMENT Amendment by Pub. L. 100–418 applicable to crude oil removed from the premises on or after Aug. 23, 1988, see section 1941(c) of Pub. L. 100–418, set out as a note under section 164 of this title.