26 U.S.C. § 6325 — Release of lien or discharge of property
submitted 72 years ago by ch. 736 to r/title-26-INTERNAL-REVENUE-CODE · 1,576 words · no verdicts yet
The Secretary must release a Federal tax lien when the liability is satisfied or secured by an accepted bond, and may discharge property, subordinate a lien, or certify nonattachment under specified conditions. The section states the effect, possible revocation, filing, and cross-reference rules for certificates.
(a) Release. Subject to regulations, within 30 days after finding that an assessed internal-revenue-tax liability and interest are fully paid or legally unenforceable, or after receiving and accepting a qualifying bond promising payment within the legal period, the Secretary* must issue a lien-release certificate.
(b) Discharge of property. (1) The Secretary may discharge part of liened property if the fair market value of the part left subject to the lien is at least twice the unpaid liability secured by the lien plus all other higher-priority liens. (2) The Secretary may discharge part if the owner pays an amount the Secretary sets, at least the value of the United States’ interest, or if that interest has no value. The Secretary considers the part’s value and higher-priority liens. (3) The Secretary may discharge property sold under an agreement placing the proceeds in a fund* subject to United States liens and claims with the same priority. (4) At an owner’s request, the Secretary must discharge property if the owner deposits the value of the United States’ interest or gives an acceptable bond for that amount. The Secretary must refund the deposit with section 6621 overpayment-rate interest and release the bond to the extent the liability can be paid from another source or the interest is worth less than first determined. If no section 7426(a)(4) action is filed on time, within 60 days after the period ends the Secretary must use the deposit or collect the bond as needed to pay the liability and refund the unused deposit with interest. This owner-substitution rule does not apply when the owner is the person whose liability caused the lien.
(c) Estate or gift tax. Subject to regulations, the Secretary may discharge any or all property under a section 6324 lien if the secured liability has been paid or provided for.
(d) Subordination. Subject to regulations, the Secretary may subordinate a lien on part of the property if: (1) an amount equal to the lien or interest being placed ahead of the United States is paid; (2) the Secretary believes subordination will increase the eventual amount realized or facilitate collection; or (3) for a section 6324B lien, the United States will remain adequately secured.
(e) Nonattachment. If confusion of names or another reason makes a person other than the assessed taxpayer* appear to be affected, the Secretary may certify that the lien does not attach to that person’s property.
(f) Effect. If filed in the same office as the related lien notice, a certificate is conclusive that: (1) a release extinguishes the lien; (2) a discharge frees the covered property; (3) subordination makes the other lien or interest superior; and (4) nonattachment keeps the lien from attaching to the named person’s property. The Secretary may revoke an erroneous or improvidently issued release or nonattachment certificate for a section 6321 lien, or a release issued under a breached compromise collateral agreement, if collection time has not expired. The Secretary must mail revocation to the taxpayer’s last known address and file it where the lien notice was filed. The reinstated lien takes effect when the mailed notice is effective, but not before required filing, and has section 6321 lien force until collection time expires. Any chapter lien attaches to property discharged by certificate if the tax-liable person reacquires it afterward.
(g) Filing. If State law’s designated office cannot file the certificate or notice, filing in the clerk’s office of the United States district court for the district containing that office makes it effective.
(h) For bond provisions, see chapter 73, sections 7101 and following.
Subject to such regulations as the Secretary* may prescribe, the Secretary shall issue a certificate of release of any lien imposed with respect to any internal revenue tax not later than 30 days after the day on which—
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
There is furnished to the Secretary and accepted 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 extension of such time), and that is in accordance with such requirements relating to terms, conditions, and form of the bond and sureties thereon, as may be specified by such regulations.
Subject to such regulations as the Secretary may prescribe, the Secretary may issue a certificate of discharge of any part of the property subject to any lien imposed under this chapter if the Secretary finds that the fair market value of that part of such property remaining 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.
Subject to such regulations as the Secretary may prescribe, the Secretary may issue a certificate of discharge of any part of the property subject to the lien if—
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
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.
Subject to such regulations as the Secretary may prescribe, the Secretary may issue a certificate of discharge of any part of the property 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 discharged property.
At the request of the owner of any property subject to any lien imposed by this chapter, the Secretary shall issue a certificate of discharge of such property if such owner—
deposits with the Secretary an amount of money equal to the value of the interest of the United States (as determined by the Secretary) in the property; or
furnishes a bond acceptable to the Secretary in a like amount.
The Secretary shall refund the amount so deposited (and shall pay interest at the overpayment rate under section 6621), and shall release such bond, to the extent that the Secretary determines that—
the unsatisfied liability giving rise to the lien can be satisfied from a source other than such property; or
the value of the interest of the United States in the property is less than the Secretary’s prior determination of such value.
If no action is filed under section 7426(a)(4) within the period prescribed therefor, the Secretary shall, within 60 days after the expiration of such period—
apply the amount deposited, or collect on such bond, to the extent necessary to satisfy the unsatisfied liability secured by the lien; and
refund (with interest as described in subparagraph (B)) any portion of the amount deposited which is not used to satisfy such liability.
Subparagraph (A) shall not apply if the owner of the property is the person whose unsatisfied liability gave rise to the lien.
Subject to such regulations as the Secretary may prescribe, the Secretary may issue a certificate 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.
Subject to such regulations as the Secretary may prescribe, the Secretary may issue a certificate of subordination of any lien imposed by this chapter upon any part of the property subject to such lien if—
there is paid over to the Secretary an amount equal to the amount of the lien or interest to which the certificate subordinates the lien of the United States,
the Secretary believes that the amount realizable by the United States from the property to which the certificate relates, or from any other property subject to the lien, will ultimately be increased by reason of the issuance of such certificate and that the ultimate collection of the tax liability will be facilitated by such subordination, or
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.
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 appearance 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.
Except as provided in paragraphs (2) and (3), if a certificate is issued pursuant to this section 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 certificate shall have the following effect:
in the case of a certificate of release, such certificate shall be conclusive that the lien referred to in such certificate is extinguished;
in the case of a certificate of discharge, such certificate shall be conclusive that the property covered by such certificate is discharged from the lien;
in the case of a certificate of subordination, 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
in the case of a certificate of nonattachment, such certificate shall be conclusive that the lien of the United States does not attach to the property of the person referred to in such certificate.
If the Secretary determines that a certificate of release or nonattachment of a lien imposed 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—
by mailing notice of such revocation to the person against whom the tax was assessed at his last known address, and
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 provisions 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 imposed by section 6321 (relating to lien for taxes).
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 reacquires such property after such certificate has been issued.
If a certificate or notice issued pursuant to this section may not be filed in the office designated 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.
For provisions relating to bonds, see chapter 73 (sec. 7101 and following).
Source credit: (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.)
- 1954Enacted · Act of Aug. 16, 1954, ch. 736
- 1966Amended · Pub. L. 85-866 · 72 Stat. 1662
- 1966Amended · Pub. L. 89-719 · 80 Stat. 1133
- 1976Amended · Pub. L. 94-455 · 90 Stat. 1834
- 1978Amended · Pub. L. 95-600 · 92 Stat. 2883
- 1982Amended · Pub. L. 97-248 · 96 Stat. 638
- 1998Amended · Pub. L. 105-206 · 112 Stat. 732
A history note hasn’t been published yet. The record shows enactment by ch. 736 on 1954-08-16.
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