[Federal Register Volume 60, Number 1 (Tuesday, January 3, 1995)]
[Rules and Regulations]
[Pages 33-38]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-31665]



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DEPARTMENT OF THE TREASURY
26 CFR Part 301

[TD 8587]
RIN 1545-AN48


Authority to Release Levy and Return Property

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations.

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SUMMARY: This document contains final regulations regarding the 
authority to release a levy and to return property. The Technical and 
Miscellaneous Revenue Act of 1988 sets forth certain conditions under 
which the IRS must release a levy. In addition, the Internal Revenue 
Code was amended in 1979 to provide for the payment of interest in 
certain circumstances in which wrongfully levied upon property is 
returned. These final regulations describe the conditions under which a 
levy will be released and the procedures for obtaining such a release. 
Lastly, these final regulations also conform the existing regulations 
regarding the return of wrongfully levied upon property to provide for 
the payment of interest in certain circumstances.

EFFECTIVE DATE: These regulations are effective December 30, 1994.

FOR FURTHER INFORMATION CONTACT: Jerome D. Sekula, 202-622-3640 (not a 
toll-free call).

SUPPLEMENTARY INFORMATION:

Background

    This document contains final regulations amending the Procedure and 
Administration Regulations (26 CFR part 301) under section 6343 of the 
Internal Revenue Code. These regulations reflect the amendment of 
section 6343 by section 6236(f) of the Technical and Miscellaneous 
Revenue Act of 1988 (Pub. L. 100-647), section 4(a) of Act of Dec. 29, 
1979 (Pub. L. 96-167), and section 1511(c)(10) of the Tax Reform Act of 
1986 (Pub. L. 99-514).
    On October 16, 1991 a notice of proposed rulemaking concerning the 
authority to release and return property was published in the Federal 
Register (56 FR 51857). Written comments [[Page 34]] responding to this 
notice were received. No public hearing was requested or held. After 
consideration of all the comments, the proposed regulations under 
section 6343 are adopted as revised by this Treasury decision.

Explanation of Revisions and Summary of Comments

    The notice of proposed rulemaking provided different rules with 
respect to levies made prior to July 1, 1989, and levies made on or 
after that date. It was decided that separate rules concerning levies 
made prior to July 1, 1989 are not necessary. Accordingly, they have 
been eliminated. These final regulations are prospective in nature and 
are effective as of December 30, 1994. In addition, for ease of 
administration, it was decided that the authority to release levies 
should be extended by regulation to service center and compliance 
center directors. These final regulations has been revised to confer 
this authority on service center and compliance center directors.
    The written comments received made several suggestions for changes 
to the proposed regulations. The comments suggested that the 
regulations provide an appeal procedure for taxpayers when a request 
for a release of levy is denied. These final regulations do not adopt 
this suggestion. A taxpayer who believes an IRS employee is not 
properly applying these regulations has the right to appeal to that 
person's supervisor. Thus, a formal appeals procedure would add a layer 
of bureaucracy to the process while providing little or no benefit to 
the taxpayer.
    The comments also suggested revising an example in the proposed 
regulations governing when a levy may be released to facilitate 
collection. The comment suggested that the example provide that a 
release of levy must be made if that release would increase the fair 
market value of the property (and, presumably, the amount that would be 
bid) if the taxpayer were to sell that property, irrespective of 
whether the proceeds from that sale would satisfy the taxpayer's 
outstanding federal tax liabilities. This suggestion has been adopted 
in modified form. The final regulations provide that a levy may be 
released even though the proceeds of the sale would not fully satisfy 
the taxpayer's outstanding federal tax liabilities, but only on a case 
by case basis at the discretion of a district director. The IRS is not 
required to release a levy merely because a taxpayer alleges that a 
sale by the taxpayer would produce a higher bid than if the sale were 
made by the IRS.
    Another suggestion was that the regulations provide an example of 
situations where the fair market value of the property exceeds the 
liability for which the levy was made and the release of levy can be 
made on only a part of a taxpayer's property without hindering the 
collection of the liability. This suggestion has been adopted in the 
final regulations.
    The comments suggested that an example be given of ``essential 
business property'' qualifying for expedited determination of whether a 
levy should be released. The issue of what constitutes ``essential 
business property'' will necessarily turn on the unique facts of an 
individual case. An item of property that may be essential to the 
carrying on of one business may not be essential in the carrying on of 
another business. Thus, any example given in the regulations could not 
provide specific guidance as to what specific items of property would 
be considered essential in all cases. Conversely, any example given in 
the regulations could be erroneously construed as requiring a certain 
fact pattern or degree of effect on the operation of a business that 
would not be necessary in all cases in order for a specific item of 
property to be considered ``essential business property.'' Accordingly, 
this suggestion has not been adopted in these final regulations.
    The comments also suggested that the final regulations require a 
district director to return the specific property levied upon if it is 
still in the possession of the United States Government. This 
suggestion was adopted in part. It is the practice of the IRS, 
generally, to return specific property still in its possession to its 
rightful owner if the property has been wrongfully seized. However, 
this general rule is not appropriate in all cases. For instance, the 
property seized may be found to include items which may be illegal 
under State or Federal law. This type of property will not be returned 
to its owner. The final regulations indicate that the IRS will normally 
return specific property in its possession when that property has been 
wrongfully levied upon.
    Another suggestion was that the proposed regulations be revised to 
require the IRS to return property within 10 days after it is 
determined that such property was wrongfully levied upon. This 
suggestion is not adopted in these final regulations. Although section 
6343 does not mandate a time period within which the property must be 
returned, property is normally returned as expeditiously as possible. 
There do occur, however, situations where conflicting claims are made 
for the return of wrongfully levied upon property. Cases where 
conflicting claims to the property are received require greater time 
and, in some instances, litigation to resolve who is rightfully 
entitled to the return of the property. A requirement that the IRS 
return property in 10 days in all cases could adversely affect the 
rights of other claimants to the property and would not benefit either 
those claimants or the IRS.
    The comments also suggested that final regulations require a person 
requesting the return of wrongfully levied upon property to include a 
copy of the levy itself if it is available. This suggestion was not 
adopted in these final regulations. Based on the experience of the IRS, 
the actual submission of a copy of the levy or notice of levy has not 
been necessary. Thus, the addition of a new requirement for the 
submission of a copy of either of those two forms in all cases could be 
potentially burdensome for some taxpayers and prove to be of no benefit 
to the IRS.
    It has also been suggested that the proposed regulations be revised 
in order to prevent a taxpayer from making a request for a release of 
levy by telephone because such requests lack proper documentation and 
make it difficult for the IRS to determine if the taxpayer has complied 
with the statutory provisions. The regulations follow current IRS 
procedures and are designed to provide the taxpayer with the most 
expeditious method to initiate a request for release. The regulations, 
however, also provide that the IRS may request any documentation 
necessary before making a determination on whether a condition 
requiring release has been met. Thus, although the request for a 
determination may be made orally, the IRS is not required to make the 
determination based on insufficient information.
    Another comment interpreted the proposed regulations as creating an 
inconsistency in that a request for release of property, in ordinary 
circumstances, could be made as little as six days prior to a scheduled 
sale of that property, while the IRS was generally allowed up to 30 
days to make a determination concerning a request for release. The 
commentator indicated its belief that these two rules could be read to 
allow a sale to take place without a determination being made 
concerning a request for release.
    The commentator's concern is unfounded. The period between the date 
of seizure and the date notice of sale is given is used by the IRS to 
determine whether the property seized [[Page 35]] should be sold or 
released. This determination is made whether or not a request for 
release has been received. Because this initial determination 
concerning sale or the possible release of the levy is made prior to 
the issuance of the notice of sale, a subsequent determination in 
response to an actual request for release of levy made by a taxpayer 
can be accomplished, in most of these cases, prior to the scheduled 
sale date if at least five days remain prior to the sale date. It is 
only in unusual cases where a determination cannot be made prior to the 
date of the scheduled sale if a request for release is made more than 
five days prior to the scheduled sale date. In those cases, the sale is 
postponed, but a determination is normally made within 30 days of the 
date of the request for release.
    To clarify this issue, however, these final regulations have been 
revised to state that if a request for release is made more than five 
days prior to a scheduled sale, the IRS is to make a determination on 
any request for release of property before that property can be sold. 
In addition, the final regulations state that the IRS is not required 
to consider a request for release or an expedited determination made 
within five or fewer days prior to a scheduled sale. The IRS has the 
discretion, however, to consider such requests.
    In Sec. 301.6343-1(b)(3) of these final regulations, the phrase 
``there is an intervening judgment lien creditor'' has been added to 
the example indicating when the IRS is not required to release a levy 
when an installment agreement has been entered into if the release will 
jeopardize the secured status of the United States. The final 
regulations also clarify that the lack of a filed notice of federal tax 
lien does not by itself warrant a finding that the secured status of 
the United States is jeopardized in all situations where no notice of 
such tax lien has been filed. Finally, the final regulations provide 
that, for the purposes of determining a reasonable amount for basic 
living expenses, a taxpayer may furnish, and the IRS may consider, 
information concerning his or her current employment status, as well as 
past employment history.

Special Analyses

    It has been determined that this Treasury decision is not a 
significant regulatory action as defined in EO 12866. Therefore, a 
regulatory assessment is not required. It also has been determined that 
section 553(b) of the Administrative Procedure Act (5 U.S.C. chapter 5) 
and the Regulatory Flexibility Act (5 U.S.C. chapter 6) do not apply to 
these regulations, and therefore, a Regulatory Flexibility Analysis is 
not required. Pursuant to section 7805(f) of the Code, the notice of 
proposed rulemaking was submitted to the Small Business Administration 
for comment on its impact on small business.

Drafting Information

    The principal author of these final regulations is Jerome D. 
Sekula, Office of the Assistant Chief Counsel (General Litigation), 
IRS. However, personnel from other offices of the IRS and Treasury 
Department participated in their development.

List of Subjects in 26 CFR Part 301

    Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income 
taxes, Penalties, Reporting and recordkeeping requirements.

Adoption of Amendments to the Regulations

    Accordingly, 26 CFR part 301 is amended as follows:

PART 301--PROCEDURE AND ADMINISTRATION

    Paragraph 1. The authority for part 301 is amended by adding 
entries to read as follows:

    Authority: 26 U.S.C. 7805 * * *

    Section 301.6343-1 also issued under 26 U.S.C. 6343.
    Section 301.6343-2 also issued under 26 U.S.C. 6343 * * *

    Par. 2. Section 301.6343-1 is revised to read as follows:


Sec. 301.6343-1  Requirement to release levy and notice of release.

    (a) In general. A district director, service center director, or 
compliance center director (director) must promptly release a levy upon 
all, or part of, property or rights to property levied upon and must 
promptly notify the person upon whom the levy was made of such a 
release, if the director determines that any of the conditions in 
paragraph (b) of this section (conditions requiring release) exist. The 
director must make a determination whether any of the conditions 
requiring release exist if a taxpayer submits a request for release of 
levy in accordance with paragraph (c) or (d) of this section; however, 
the director may make this determination based upon information 
received from a source other than the taxpayer. The director may 
require any supporting documentation as is reasonably necessary to 
determine whether a condition requiring release exists.
    (b) Conditions requiring release. The director must release the 
levy upon all or a part of the property or rights to property levied 
upon if he or she determines that one of the following conditions 
exists--
    (1) Liability satisfied or unenforceable--(i) General rule. The 
liability for which the levy was made is satisfied or the period of 
limitations provided in section 6502 (and any period during which the 
period of limitations is suspended as provided by law) has lapsed. A 
levy is considered made on the date on which the notice of seizure 
provided in section 6335(a) is given. A levy that is made within the 
period of limitations provided in section 6502 does not become 
unenforceable simply because the person who receives the levy does not 
surrender the subject property within the period of limitations. In 
this case, the liability remains enforceable to the extent of the value 
of the levied upon property. However, a levy made outside the period of 
limitations (normally ten years without suspensions) must be released 
unless--
    (A) The taxpayer agreed in writing to extend the period of 
limitations as provided in section 6502(a)(2) and Sec. 301.6502-1; or
    (B) A proceeding in court to collect the liability has begun within 
the period of limitations.
    (ii) Special situations. A continuing levy on salary or wages made 
under section 6331(e) must be released at the end of the period of 
limitations in section 6502. However, a levy on a fixed and 
determinable right to payment which right includes payments to be made 
after the period of limitations expires does not become unenforceable 
upon the expiration of the period of limitations and will not be 
released under this condition unless the liability is satisfied.
    (2) Release will facilitate collection. The release of the levy 
will facilitate collection of the liability. A director has the 
discretion to release the levy in all situations, including those where 
the proceeds from the sale will not fully satisfy the tax liabilities 
of the taxpayer, under terms and conditions as he or she determines are 
warranted.
    (i) Example. The following example illustrates the provisions of 
this paragraph (b)(2):

    Example. A and B each own machines which, when used together, 
produce widgets. A owes delinquent federal taxes. A notice of 
federal tax lien is properly filed against all property or rights to 
property belonging to A. A's machine is seized to satisfy A's 
delinquent tax liability. The fair market value of A's property is 
greater than the expenses of seizure and sale, but less than the 
amount of A's tax liability. A and B find a buyer who 
[[Page 36]] wants to buy both machines together. The buyer will only 
buy the machines together. A's property has a greater value as part 
of the package than it does by itself. The larger value, as shown in 
the sale contract, is enough to pay A's tax liability in full. In 
this situation a release of the levy will facilitate collection 
because the sale of both machines can be completed and A's liability 
will be paid in full at the settlement.

    (ii) Compliance with other conditions. The director may find that 
collection will be facilitated by the taxpayer's compliance with 
conditions other than immediate payment, such as:
    (A) The delinquent taxpayer delivers a satisfactory arrangement, 
which is accepted by the director, for placing property in escrow to 
secure the payment of the liability (including the expenses of the 
levy) which is the basis of the levy.
    (B) The delinquent taxpayer delivers an acceptable bond to the 
director conditioned upon the payment of the liability (including the 
expenses of levy) which is the basis of the levy. This bond shall be in 
the form provided in section 7101 and Sec. 301.7101-1.
    (C) There is paid to the director an amount determined by the 
director to be equal to the interest of the United States in the seized 
property or the part of the seized property to be released.
    (D) The delinquent taxpayer executes an agreement to extend the 
statute of limitations in accordance with section 6502(a)(2) and 
Sec. 301.6502-1.
    (iii) Expenses of sale exceed the government's interest. If the 
director determines that the value of the United States' interest in 
the seized property does not exceed the expenses of sale of the 
property, a release of the levy will be deemed to facilitate collection 
of the liability even though the fair market value of property which 
has been seized exceeds the expenses of seizure and sale.
    (3) Installment agreement. The taxpayer has entered into an 
agreement under section 6159 to satisfy the liability by means of 
installment payments, unless the agreement provides otherwise. However, 
the director is not required to release the levy under this condition 
if a release of the levy will jeopardize the secured creditor status of 
the United States, e.g., where there is an intervening judgment lien 
creditor and a notice of tax lien has not been filed.
    (4) Economic hardship--(i) General rule. The levy is creating an 
economic hardship due to the financial condition of an individual 
taxpayer. This condition applies if satisfaction of the levy in whole 
or in part will cause an individual taxpayer to be unable to pay his or 
her reasonable basic living expenses. The determination of a reasonable 
amount for basic living expenses will be made by the director and will 
vary according to the unique circumstances of the individual taxpayer. 
Unique circumstances, however, do not include the maintenance of an 
affluent or luxurious standard of living.
    (ii) Information from taxpayer. In determining a reasonable amount 
for basic living expenses the director will consider any information 
provided by the taxpayer including--
    (A) The taxpayer's age, employment status and history, ability to 
earn, number of dependents, and status as a dependent of someone else;
    (B) The amount reasonably necessary for food, clothing, housing 
(including utilities, home-owner insurance, home-owner dues, and the 
like), medical expenses (including health insurance), transportation, 
current tax payments (including federal, state, and local), alimony, 
child support, or other court-ordered payments, and expenses necessary 
to the taxpayer's production of income (such as dues for a trade union 
or professional organization, or child care payments which allow the 
taxpayer to be gainfully employed);
    (C) The cost of living in the geographic area in which the taxpayer 
resides;
    (D) The amount of property exempt from levy which is available to 
pay the taxpayer's expenses;
    (E) Any extraordinary circumstances such as special education 
expenses, a medical catastrophe, or natural disaster; and
    (F) Any other factor that the taxpayer claims bears on economic 
hardship and brings to the attention of the director.
    (iii) Good faith requirement. In addition, in order to obtain a 
release of a levy under this subparagraph, the taxpayer must act in 
good faith. Examples of failure to act in good faith include, but are 
not limited to, falsifying financial information, inflating actual 
expenses or costs, or failing to make full disclosure of assets.
    (5) Fair market value exceeds liability. The fair market value of 
the property exceeds the liability for which the levy was made and 
release of the levy on a part of the property can be made without 
hindering the collection of the liability. The following example 
illustrates the provisions of this paragraph (b)(5):

    Example. The Internal Revenue Service levies upon ten widgets 
which belong to the taxpayer to satisfy the taxpayer's outstanding 
tax liabilities. Subsequent to the levy, the taxpayer establishes 
that market conditions have increased the aggregate fair market 
value of widgets so that the value of seven widgets equals the 
aggregate anticipated expenses of sale and seizure and the tax 
liabilities for which the levy was made. The director must release 
three widgets from the levy and return them to the taxpayer.

    (c) Request for release of levy--(1) Information to be submitted by 
taxpayer. A taxpayer who wishes to obtain a release of a levy must 
submit a request for release in writing or by telephone to the district 
director for the Internal Revenue district in which the levy was made. 
The taxpayer making the request must provide the following 
information--
    (i) The name, address, and taxpayer identification number of the 
taxpayer;
    (ii) A description of the property levied upon;
    (iii) The type of tax and the period for which the tax is due;
    (iv) The date of the levy and the originating Internal Revenue 
district, if known; and
    (v) A statement of the grounds upon which the request for release 
of the levy is based.
    (2) Time for submission. Except in extraordinary circumstances, a 
request for release of a levy must be made more than five days prior to 
a scheduled sale of the property to which the levy relates.
    (3) Determination by director--(i) When required. The director must 
promptly make a determination concerning release prior to sale in all 
cases where a request for release of a levy is made except those where 
the request for release is made five or fewer days prior to a scheduled 
sale of the property to which the levy relates.
    (ii) Time for making required determination. The determination will 
be made, generally, within 30 days of a request for release made 30 or 
more days prior to a scheduled sale of the property to which the levy 
relates. If a request for release is made less than 30 days prior to 
the scheduled sale but more than 5 days before the scheduled sale, a 
determination must be made prior to the scheduled sale. If necessary 
the director may postpone the scheduled sale in order to make this 
determination.
    (iii) Discretionary determination. The director has the discretion, 
but is not required, to make a determination concerning release prior 
to sale in cases where a request for release of a levy is made five or 
fewer days prior to a scheduled sale of the property to which the levy 
relates.
    (4) Notification to taxpayer of determination. The director must 
promptly notify the taxpayer if the levy is released. If the director 
determines [[Page 37]] that none of the conditions requiring release of 
the levy exist, the director must promptly notify the taxpayer of the 
decision not to release the levy and the reason why the levy is not 
being released.
    (d) Expedited determination with respect to certain business 
property--(1) General procedure--(i) Submission by taxpayer. If a levy 
is made on essential business property as is described in paragraph 
(d)(2) of this section, the taxpayer may obtain an expedited 
determination of whether any of the conditions requiring release of the 
levy exist. In order to obtain an expedited determination, the taxpayer 
must submit, within the time frame specified in paragraph (c)(2) of 
this section, the information required in paragraph (c)(1) of this 
section and include with the information an explanation of why the 
property levied upon qualifies for an expedited determination of 
whether a condition requiring release of the levy exists.
    (ii) Time for making required determination. The director must make 
such a determination by the later of 10 business days from the time the 
director receives the request for release, or 10 business days from the 
time the director receives any necessary supporting documentation, if 
10 or more business days remain before a scheduled sale of the property 
to which the levy relates. An expedited determination concerning 
release must be made prior to sale in all cases where a request for 
release of a levy is made within the time frame specified in paragraph 
(c)(2) of this section. If necessary the director may postpone the 
scheduled sale in order to make this determination.
    (iii) Discretionary determination. The director has the discretion, 
but is not required, to make an expedited determination concerning 
release in cases where the taxpayer does not submit, within the time 
frame specified in paragraph (c)(2) of this section, the information 
required in paragraph (c)(1) of this section and include with the 
information an explanation of why the property levied upon qualifies 
for an expedited determination of whether a condition requiring release 
of the levy exists.
    (2) Essential business property defined. For purposes of this 
section, essential business property means tangible personal property 
used in carrying on the trade or business of the taxpayer which when 
levied upon prevents the taxpayer from continuing to carry on the trade 
or business.
    (3) Seizure of perishable goods. The provisions of this paragraph 
do not apply in the case of a seizure of perishable goods. Those 
seizures are governed by the provisions of section 6336 and 
Sec. 301.6336-1.
    (e) Effect of a release of levy. If property has not yet been 
surrendered to the director in response to a levy, a release of the 
levy under section 6343(a) will relieve the possessor of any obligation 
to surrender the property. Otherwise, a release of a levy under section 
6343(a) will cause the property to be returned to the custody of the 
person or persons legally entitled thereto. The release of a levy on 
any property under this section does not prevent any subsequent levy on 
the property. Section 301.6343-2, dealing with return of wrongfully 
levied upon property, is subject to section 6402 which prohibits the 
Internal Revenue Service from refunding a payment of money that has 
been deposited in the Treasury and credited to the taxpayer's liability 
unless there is an overpayment.
    (f) Effective date. This section is effective as of December 30, 
1994.
    Par. 3. Section 301.6343-2 is added to read as follows:


Sec. 301.6343-2  Return of wrongfully levied upon property.

    (a) Return of property--(1) General rule. If the district director, 
service center director, or compliance center director (the director) 
determines that property has been wrongfully levied upon, the director 
may return--
    (i) The specific property levied upon;
    (ii) An amount of money equal to the amount of money levied upon; 
or
    (iii) An amount of money equal to the amount of money received by 
the United States from a sale of the property.
    (2) Time of return. If the United States is in possession of 
specific property, the property may be returned at any time. An amount 
equal to the amount of money levied upon or received from a sale of the 
property may be returned at any time before the expiration of 9 months 
from the date of the levy. When a request described in paragraph (b) of 
this section is filed for the return of property before the expiration 
of 9 months from the date of levy, an amount of money may be returned 
after a reasonable period of time subsequent to the expiration of the 
9-month period if necessary for the investigation and processing of 
such request.
    (3) Specific property. In general the specific property levied upon 
will be returned whenever possible. For this purpose, money that is 
specifically identifiable, as in the case of a coin collection which 
may be worth substantially more than its face value, is treated as 
specific property.
    (4) Purchase by United States. For purposes of paragraph 
(a)(1)(iii) of this section, if property is declared purchased by the 
United States at a sale pursuant to section 6335(e), the United States 
is treated as having received an amount of money equal to the minimum 
price determined by the director before the sale or, if larger, the 
amount received by the United States from the resale of the property.
    (b) Request for return of property. A written request for the 
return of property wrongfully levied upon must be addressed to the 
district director (marked for the attention of the Chief, Special 
Procedures Staff) for the Internal Revenue district in which the levy 
was made. The written request must contain the following information--
    (1) The name and address of the person submitting the request;
    (2) A detailed description of the property levied upon;
    (3) A description of the claimant's basis for claiming an interest 
in the property levied upon; and
    (4) The name and address of the taxpayer, the originating Internal 
Revenue district, and the date of the levy as shown on the notice of 
levy form, or levy form, or, in lieu thereof, a statement of the 
reasons why such information cannot be furnished.
    (c) Inadequate request. A request for the return of property 
wrongfully levied upon will not be considered adequate unless it is a 
written request containing the information required by paragraph (b) of 
this section. However, unless a notification is mailed by the director 
to the claimant within 30 days of receipt of the request to inform the 
claimant of the inadequacies, any written request will be considered 
adequate. If the director timely notifies the claimant of the 
inadequacies of his request, the claimant has 30 days from the receipt 
of the notification of inadequacy to supply in writing any omitted 
information. Where the omitted information is so supplied within the 
30-day period, the request will be considered to be adequate from the 
time the original request was made for purposes of determining the 
applicable period of limitation upon suit under section 6532(c).
    (d) Payment of interest. Interest is paid at the overpayment rate 
established under section 6621--
    (1) In the case of money returned under paragraph (a)(1)(ii) of 
this section, from the date the director received the money to a date 
(to be determined by the director) preceding the date of return by not 
more than 30 days; or
    (2) In the case of money returned under paragraph (a)(1)(iii) of 
this [[Page 38]] section, from the date of the sale of the property to 
a date (to be determined by the director) preceding the date of return 
by not more than 30 days.
    (e) Effective date. This section is effective as of December 30, 
1994.

    Approved: December 13, 1994.
Margaret Milner Richardson,
Commissioner of Internal Revenue.
Leslie Samuels,
Assistant Secretary of the Treasury.
[FR Doc. 94-31665 Filed 12-30-94; 8:45 am]
BILLING CODE 4830-01-U