Section 6325. Release of lien or discharge of property

Section 6325. Release of lien or discharge of property

U.S. Code as of: 01/19/04

(a) Release of lien

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 -

(1) Liability satisfied or unenforceable

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

(2) Bond accepted

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.

(b) Discharge of property

(1) Property double the amount of the liability

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.

(2) Part payment; interest of United States valueless

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 -

(A) 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

(B) 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.

(3) Substitution of proceeds of sale

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.

(4) Right of substitution of value

(A) In general

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 -

(i) 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

(ii) furnishes a bond acceptable to the Secretary in a like

amount.

(B) Refund of deposit with interest and release of bond

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 -

(i) the unsatisfied liability giving rise to the lien can

be satisfied from a source other than such property; or

(ii) 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 -

(i) apply the amount deposited, or collect on such bond, to

the extent necessary to satisfy the unsatisfied liability

secured by the lien; and

(ii) refund (with interest as described in subparagraph

(B)) any portion of the amount deposited which is not used to

satisfy such liability.

(D) Exception

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.

(d) Subordination of lien

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 -

(1) 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,

(2) 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

(3) 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.

(e) Nonattachment of lien

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.

(f) Effect of certificate

(1) Conclusiveness

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:

(A) in the case of a certificate of release, such certificate

shall be conclusive that the lien referred to in such

certificate is extinguished;

(B) 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;

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

(D) 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.

(2) Revocation of certificate of release or nonattachment

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 -

(A) by mailing notice of such revocation to the person

against whom the tax was assessed at his last known address,

and

(B) 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).

(3) Certificates void under certain conditions

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.

(g) Filing of certificates and notices

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.

(h) Cross reference

For provisions relating to bonds, see chapter 73 (sec. 7101

and following).