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. * * * 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 * * * 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 or effects distrained, a copy of which, signed by the officer making such distraint, shall be left with the owner or possessor of such goods or effects, or at his dwelling or usual place of business, with some person of suitable age and discretion, if any such can be found, with a note of the sum demanded and the time and place of sale; and (b) PUBLIC NOTICE.-Forthwith cause a notification to be published in some newspaper within the county wherein said distraint is made, if a newspaper is published in said county, or to be publicly posted at the post office, if there be one within five miles, nearest to the residence of the person whose property shall be distrained, and in not less than two other public places. Such notice shall specify the articles distrained, and the time and place for the sale thereof. (c) TIME AND PLACE OF SALE. The time of sale shall not be less than ten nor more than twenty days from the date of such notification to the owner or possessor of the property and the publication or posting of such notice as provided in subsection (b), and the place proposed for the sale shall not be more than five miles distant from the place of making such distraint. (d) ADJOURNMENT OF SALE. Said sale may be adjourned from time to time by said officer, if he deems it advisable, but not for a time to exceed in all 30 days. SEC. 3694. PRIORITY OF SPECIFIC TAX LIABILITY ON DISTRAINED PROPERTY. When property subject to tax, but upon which the tax has not been paid, is seized upon distraint and sold, the amount of such tax shall, after deducting the expenses of such sale, be first appropriated out of the proceeds thereof to the payment of the tax. And if no assessment of such tax has been made upon such property, the collector shall make a return thereof in the form required by law, and the Commissioner shall assess the tax thereon. SEC. 3695. PROPERTY FOR ACCOUNT OF THE UNITED STATES. (a) PURCHASE.-When any personal property is advertised for sale under distraint as aforesaid, the officer making the seizure shall proceed to sell such property at a public auction, offering the same at a minimum price, including the expenses of making the levy and of advertising the sale, and if the amount bid for such property at the sale is not equal to the minimum price so fixed, the officer conducting the sale may declare the same to be purchased by him for the United States. (b) SALE. The property so purchased may be sold by the collector within whose district the sale was made, under such regulations as may be prescribed by the Commissioner with the approval of the Secretary. (c) ACCOUNTING. The collector shall render to the Commissioner a distinct account of all charges incurred in such sales, and, in case of resale, shall pay into the Treasury the proceeds as provided in section 3971. SEC. 3696. REDEMPTION OF PROPERTY. In any case of distraint for the payment of taxes, the goods, chattels, or effects so distrained shall be restored to the owner or possessor, if, prior to the sale, payment of the amount due is made to the proper officer charged with the collection, together with the fees and other charges; but, in case of nonpayment, the said officer shall proceed to sell the said goods, chattels, or effects at public auction. SEC. 3697. CERTIFICATES OF SALE. In all cases of sale, as aforesaid, the certificate of such sale— (a) AS EVIDENCE.-Shall be prima facie evidence of the right of the officer to make such sale, and conclusive evidence of the regularity of his proceedings in making the sale; and (b) As CONVEYANCES. Shall transfer to the purchaser all right, title, and interest of such delinquent in and to the property sold; and (c) AS AUTHORITY FOR TRANSFER OF CORPORATE STOCK.-Where such property consists of stocks, shall be notice, when received, to any corporation, company, or association of said transfer, and shall be authority to such corporation, company, or association to record the transfer on their books and records in the same manner as if the stocks were transferred or assigned by the party holding the same, in lieu of any original or prior certificates, which shall be void, whether canceled or not; and (d) AS RECEIPTS.-Where the subject of sale is securities or other evidences of debt, shall be a good and valid receipt to the person holding the same, as against any person holding or claiming to hold possession of such securities or other evidences of debt. SEC. 3698. CROSS REFERENCES. For provisions relating to Production of books, see section 3711. Sale of indivisible property, see section 3712. Part II-Distraint on Real Estate SEC. 3700. AUTHORITY TO DISTRAIN. When goods, chattels, or effects sufficient to satisfy the taxes imposed upon any person are not found by the collector or deputy collector, he is authorized to collect the same by seizure and sale of real estate. SEC. 3701. PROCEEDINGS ON DISTRAINT. (a) NOTICE TO OWNER.-The officer making the seizure mentioned in the preceding section shall give notice to the person whose estate it is proposed to sell by giving him in hand, or leaving at his last or usual place of abode, if he has any such within the collection district where said estate is situated, a notice in writing, stating what particular estate is to be sold, describing the same with reasonable certainty, and the time when and place where said officer proposes to sell the same. (b) PUBLIC NOTICE. The said officer shall also cause a notification to the same effect to be published in some newspaper within the county where such seizure is made, if any such there be, and shall also cause a like notice to be posted at the post office nearest to the estate seized, and in two other public places within the county. |