SEC. 3662. PROHIBITION OF SUITS TO REPLEVY PROPERTY TAKEN UNDER INTERNAL REVENUE LAWS.

For statute prohibiting_suits to replevy property taken under revenue laws, see section 934 R. S. (U. S. C., Title 28, section 747).1

SEC. 3663. CROSS REFERENCES.

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For prohibition upon collection of any tax from insolvent banks, see section 3798.

[For requirement of separate accounts of moneys received from internal duties or taxes in each State, Territory, and collection district, see R. S. 239 (5 U. S. C. 259).]

SUBCHAPTER B-LIEN FOR TAXES

SEC. 3670. PROPERTY SUBJECT TO LIEN.

If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount (including any interest, penalty, additional amount, or addition to such tax, together with any costs that may accrue in addition thereto) shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person.

SEC. 3671. PERIOD OF LIEN.

Unless another date is specifically fixed by law, the lien shall arise at the time the assessment list was received by the collector and shall continue until the liability for such amount is satisfied or becomes. unenforceable by reason of lapse of time.

SEC. 3672. VALIDITY AGAINST MORTGAGEES, PLEDGEES, PURCHASERS, AND JUDGMENT CREDITORS.

(a) INVALIDITY OF LIEN WITHOUT NOTICE.-Such lien shall not be valid as against any mortgagee, pledgee, purchaser, or judgment creditor until notice thereof has been filed by the collector

(1) UNDER STATE OR TERRITORIAL LAWS.-In the office in which the filing of such notice is authorized by the law of the State or Territory in which the property subject to the lien is situated, whenever the State or Territory has by law authorized the filing of such notice in an office within the State or Territory;

or

(2) WITH CLERK OF DISTRICT COURT.-In the office of the clerk of the United States district court for the judicial district in which the property subject to the lien is situated, whenever the State or Territory has not by law authorized the filing of such notice in an office within the State or Territory; or

(3) WITH CLERK OF DISTRICT COURT OF THE UNITED STATES FOR THE DISTRICT OF COLUMBIA.-In the office of the clerk of the District Court of the United States for the District of Columbia, if the property subject to the lien is situated in the District of Columbia.

(b) (1) EXCEPTION IN CASE OF SECURITIES. -Even though notice of lien provided in section 3670 has been filed in the manner prescribed in subsection (a) of this section, the lien

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1 R. S. 934 has been superseded by section 2463 of title 28 of the United States Code (62 Stat. 974); see Appendix ÎI.

shall not be valid with respect to a security, as defined in paragraph (2) of this subsection, as against any mortgagee, pledgee, or purchaser of such security, for an adequate and full consideration in money or money's worth, if at the time of such mortgage, pledge, or purchase such mortgagee, pledgee, or purchaser is without notice or knowledge of the existence of such lien.

(2) DEFINITION OF SECURITY.-As used in this subsection, the term "security" means any bond, debenture, note, or certificate, or other evidence of indebtedness, issued by any corporation (including one issued by a government or political subdivision thereof), with interest coupons or in registered form, share of stock, voting trust certificate, or any certificate of interest or participation in, certificate of deposit or receipt for, temporary or interim certificate for, or warrant or right to subscribe to or purchase, any of the foregoing; negotiable instrument; or money. (3) APPLICABILITY OF SUBSECTION.this subsection shall apply regardless of the time when the mortgage, pledge, or purchase was made or the lien arose.

SEC. 3673. RELEASE OF LIEN.

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Subject to such regulations as the Commissioner, with the approval of the Secretary, may prescribe, the collector charged with an assessment in respect of any tax may issue a certificate of release of the lien if

(a) LIABILITY SATISFIED OR UNENFORCEABLE.-The collector finds that the liability for the amount assessed, together with all interest in respect thereof, has been satisfied or has become unenforceable by reason of lapse of time; or

(b) BOND ACCEPTED.-There is furnished to the collector 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 in the regulations.

SEC. 3674. PARTIAL DISCHARGE OF PROPERTY.

(a) PROPERTY DOUBLE THE AMOUNT OF THE LIABILITY.-Subject to such regulations as the Commissioner, with the approval of the Secretary, may prescribe, the collector charged with an assessment in respect of any tax may issue a certificate of partial discharge of any part of the property subject to the lien if the collector 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 liability remaining unsatisfied in respect of such tax and the amount of all prior liens upon such property.

(b) PART PAYMENT. Subject to such regulations as the Commissioner, with the approval of the Secretary, may prescribe, the collector charged with an assessment in respect of any tax may issue a certificate of discharge of any part of the property subject to the lien if there is paid over to the collector in part satisfaction of the liability in respect of such tax an amount determined by the Commissioner, which shall

not be less than the value, as determined by him, of the interest of the United States in the part to be so discharged. In determining such value the Commissioner shall give consideration to the fair market value of the part to be so discharged and to such liens thereon as have priority to the lien of the United States.

SEC. 3675. EFFECT OF CERTIFICATES OF RELEASE OR PARTIAL DISCHARGE.

A certificate of release or of partial discharge issued under this subchapter shall be held conclusive that the lien upon the property covered by the certificate is extinguished.

SEC. 3677. EXTENDED APPLICATION OF PROVISIONS RELATING TO RELEASE OR PARTIAL DISCHARGE.

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Sections 3673, 3674, 3675, and shall apply to a lien in respect of any internal revenue tax, whether or not the lien is imposed by this subchapter.

SEC. 3678. CIVIL ACTION TO ENFORCE LIEN ON PROPERTY.

(a) FILING. In any case where there has been a refusal or neglect to pay any tax, and it has become necessary to seize and sell property and rights to property, whether real or personal, to satisfy the same, whether distraint proceedings have been commenced or not, the Attorney General at the request of the Commissioner may direct a civil action to be filed, in a district court of the United States, to enforce the lien of the United States for tax upon any property and rights to property, whether real or personal, or to subject any such property and rights to property owned by the delinquent, or in which he has any right, title, or interest, to the payment of such tax.

(b) PARTIES TO PROCEEDINGS.-All persons having liens upon or claiming any interest in the property or rights to property sought to be subjected as aforesaid shall be made parties to such proceedings and be brought into court.

(c) ADJUDICATION AND DECREE.-The said court shall, at the term next after the parties have been duly notified of the proceedings, unless otherwise ordered by the court, proceed to adjudicate all matters involved therein and finally determine the merits of all claims to and liens upon the property and rights to property in question, and, in all cases where a claim or interest of the United States therein is established, may decree a sale of such property and rights to property, by the proper officer of the court, and a distribution of the proceeds of such sale according to the findings of the court in respect to the interests of the parties and of the United States.

(d) RECEIVERSHIP.-In any such proceeding, at the instance of the United States, the court may appoint a receiver to enforce the lien, or, upon certification by the Commissioner during the pendency of such proceedings that it is in the public interest, may appoint a receiver with all the powers of a receiver in equity.

SEC. 3679. CIVIL ACTION TO CLEAR TITLE TO REALTY. (a) OBTAINING LEAVE TO FILE.

(1) REQUEST FOR INSTITUTION OF PROCEEDINGS BY UNITED STATES. Any person having a lien upon or any interest in the real estate referred to in section 3678, notice of which has been duly

filed of record in the jurisdiction in which the real estate is located, prior to the filing of notice of the lien of the United States as provided in section 3672, or any person purchasing the real estate at a sale to satisfy such prior lien or interest, may make written request to the Commissioner to authorize the filing of a civil action as provided in section 3678.

(2) PETITION TO COURT.-If the Commissioner fails to authorize the filing of such civil action within six months after receipt of such written request, such person or purchaser may, after giving notice to the Commissioner, file a petition in the district court of the United States for the district in which the real estate is located, praying leave to file a civil action for a final determination of all claims to or liens upon the real estate in question.

(3) COURT ORDER.-After a full hearing in open court, the district court may in its discretion enter an order granting leave to file such civil action, in which the United States and all persons having liens upon or claiming any interest in the real estate shall be made parties.

(c) ADJUDICATION.-Upon the filing of such civil action the district court shall proceed to adjudicate the matters involved therein, in the same manner as in the case of civil actions filed under section 3678. For the purpose of such adjudication, the assessment of the tax upon which the lien of the United States is based shall be conclusively presumed to be valid.

(d) Costs. All costs of the proceedings on the petition and the civil action shall be borne by the person filing the civil action. SEC. 3680. CROSS REFERENCES.

For lien in case of

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Tax on distilled spirits, see section 2800 (e).

[For exclusion of tax liability from discharge in bankruptcy, see section 17 of the Bankruptcy Act, as amended (52 Stat. 851; 11 U. S. C. 35). For limit on amount allowed in bankruptcy proceedings on debts owing to the United States, see section 57 (j) of the Bankruptcy Act, as amended (52 Stat. 867; 11 U. S. C. 93).

For recognition of tax liens in proceedings under the Bankruptcy Act, see section 67 (b) and (c) of that act, as amended (52 Stat. 876877; 11 U. S. C. 107).

For collection of taxes in connection with wage earners' plans in bankruptcy courts, see section 680 of the Bankruptcy Act, as added June 22, 1938 (52 Stat. 938; 11 U. S. C. 1080).]

For provisions permitting the United States to be made party defendant in a proceeding in a State court for the foreclosure of a lien upon real estate where the United States may have a claim upon the premises involved, see act of March 4, 1931, c. 515, 46 Stat. 1528 (U. S. C., Title 28, §§ 901-906).1

[For priority of lien of the United States in case of insolvency, see R. S. 3466 (31 U. S. C. 191).]

This act of March 4, 1931, has been superseded by section 2410 of Title 28 of the United States Code (62 Stat. 972-973; see Appendix II).

SUBCHAPTER C-DISTRAINT

Part I-Distraint on Personal Property

SEC. 3690. AUTHORITY TO DISTRAIN.

If any person liable to pay any taxes neglects or refuses to pay the same within ten days after notice and demand, it shall be lawful for the collector or his deputy to collect the said taxes, with such interest and other additional amounts as are required by law, by distraint and sale, in the manner provided in this subchapter, of the goods, chattels, or effects, including stocks, securities, bank accounts, and evidences of debt, of the person delinquent as aforesaid.

[For disregard of the ten-day period in case of jeopardy assessments, see section 3660 (a).

For postponements by reason of war, see section 3804.]

SEC. 3691. PROPERTY EXEMPT FROM DISTRAINT.

(a) ENUMERATION.-There shall be exempt from distraint and sale, if belonging to the head of a family

(1) SCHOOL BOOKS AND WEARING APPAREL.-The school books and wearing apparel necessary for such family; also

(2) ARMS.-Arms for personal use;

(3) LIVESTOCK.-One cow, two hogs, five sheep and the wool thereof, provided the aggregate market value of said sheep shall not exceed $50;

(4) FODDER. The necessary food for such cow, hogs, and sheep, for a period not exceeding 30 days;

(5) FUEL.-Fuel to an amount not greater in value than $25; (6) PROVISIONS.-Provisions to an amount not greater than $50;

(7) HOUSEHOLD FURNITURE.-Household furniture kept for use to an amount not greater than $300; and

(8) BOOKS AND TOOLS OF TRADE OR PROFESSION.-The books, tools, or implements of a trade or profession, to an amount not greater than $100.

(b) APPRAISAL.-The officer making the distraint shall summon three disinterested householders of the vicinity, who shall appraise and set apart to the owner the amount of property herein declared to be exempt.

SEC. 3692. LEVY.

In case of neglect or refusal under section 3690, the collector may levy, or by warrant may authorize a deputy collector to levy, upon all property and rights to property, except such as are exempt by the preceding section, belonging to such person, or on which the lien provided in section 3670 exists, for the payment of the sum due, with interest and penalty for nonpayment, and also of such further sum as shall be sufficient for the fees, costs, and expenses of such levy. SEC. 3693. PROCEEDINGS ON DISTRAINT.

When distraint is made, as provided in section 3690

(a) ACCOUNT AND NOTICE TO OWNER.-The officer charged with the collection shall make or cause to be made an account of the goods