26 U.S.C. § 7341 — Penalty for sales to evade tax
submitted 72 years ago by ch. 736 to r/title-26-INTERNAL-REVENUE-CODE · 162 words · no verdicts yet
A person who sells property to avoid an internal-revenue tax can make the sale debt and security unenforceable, and money already paid can be forfeited.
(a) Contract not enforceable. If a person who owes a tax on property sells it, or causes or allows it to be sold, before paying the tax, intending to avoid the tax or defraud the internal-revenue laws, any debt created by the sale and any security for that debt are void. A court may not enforce them unless the security was transferred in good faith to an innocent holder.
(b) Money forfeited. If the property was paid for in whole or in part, the amount paid is treated as forfeited.
(c) Recovery. A person who sues the seller for the amount paid in an action for debt recovers that amount from the seller: one-half for the plaintiff and one-half for the United States.
Whenever any person who is liable to pay any tax imposed by this title upon, for, or in respect of, any property sells or causes or allows the same to be sold before such tax is paid, with intent to avoid such tax, or in fraud of the internal revenue laws, any debt contracted in such sale, and any security given therefor, unless the same shall have been bona fide transferred to an innocent holder, shall be void, and the collection thereof shall not be enforced in any court.
If such property has been paid for, in whole or in part, the sum so paid shall be deemed forfeited.
Any person who shall sue for the sum so paid (in an action of debt) shall recover from the seller the amount so paid, one-half to his own use and the other half to the use of the United States.
Source credit: (Aug. 16, 1954, ch. 736, 68A Stat. 872.)
- 1954Enacted · Act of Aug. 16, 1954, ch. 736
A history note hasn’t been published yet. The record shows enactment by ch. 736 on 1954-08-16.
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