[Federal Register Volume 73, Number 131 (Tuesday, July 8, 2008)]
[Rules and Regulations]
[Pages 38915-38917]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-15460]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 301

[TD 9410]
RIN 1545-BF54


Change to Office to Which Notices of Nonjudicial Sale and 
Requests for Return of Wrongfully Levied Property Must Be Sent

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Final regulations and removal of temporary regulations.

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SUMMARY: This document contains final regulations relating to the 
discharge of liens under section 7425 and return of wrongfully levied 
upon property under section 6343 of the Internal Revenue Code (Code) of 
1986. These regulations revise regulations currently published under 
sections 7425 and 6343. These regulations clarify that such notices and 
claims should be sent to the IRS official and office specified in the 
relevant IRS publications. The regulations will affect parties seeking 
to provide the IRS with

[[Page 38916]]

notice of a nonjudicial foreclosure sale and parties making 
administrative requests for return of wrongfully levied property.

DATES: Effective Date: These regulations are effective on July 8, 2008.
    Applicability Date: See Sec. Sec.  301.6343-2 and 301.6343-3.

FOR FURTHER INFORMATION CONTACT: Robin M. Ferguson, (202) 622-3630 (not 
a toll-free call).

SUPPLEMENTARY INFORMATION: 

Background

    This document contains final regulations amending the Procedure and 
Administration Regulations (26 CFR part 301) relating to the giving of 
notice of nonjudicial sales under section 7425(b) of the Code. This 
document also contains final regulations amending the Procedure and 
Administration Regulations relating to requests for return of 
wrongfully levied property under section 6343(b) of the Code. On July 
20, 2007, temporary regulations (TD 9344) were published in the Federal 
Register (72 FR 39737). A notice of proposed rulemaking (REG-148951-05) 
cross-referencing the temporary regulations was published in the 
Federal Register on the same day (72 FR 39771). No written comments 
were received from the public in response to the notice of proposed 
rulemaking. No public hearing was requested, scheduled or held. The 
proposed regulations are adopted as amended by this Treasury decision, 
and the corresponding temporary regulations are removed.
    For notices of nonjudicial foreclosure sale under section 7425(b) 
and requests for return of property wrongfully levied upon under 
section 6343(b), the existing regulations direct the notices and 
requests to be sent to the ``district director (marked for the 
attention of the Chief, Special Procedures Staff).'' The offices of the 
district director and Special Procedures were eliminated by the IRS 
reorganization implemented pursuant to the IRS Restructuring and Reform 
Act of 1998, Public Law 105-206 (RRA 1998), creating uncertainty as to 
the timeliness of notices and requests under these provisions.

Comments on the Proposed Regulations

    None.

Modifications of the Proposed Regulations

    None, other than minor grammatical revisions.

Effective/Applicability Date

    These regulations are effective on July 8, 2008.

Special Analyses

    It has been determined that this Treasury decision is not a 
significant regulatory action as defined in Executive Order 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) does not apply to these regulations, and because the 
regulations do not impose a collection of information on small 
entities, the Regulatory Flexibility Act (5 U.S.C. chapter 6) does not 
apply. Pursuant to section 7805(f) of the Internal Revenue Code, these 
regulations have been submitted to the Chief Counsel for Advocacy of 
the Small Business Administration for comment on its impact on small 
business.

Drafting Information

    The principal author of these regulations is Robin M. Ferguson, 
Office of Associate Chief Counsel (Procedure and Administration).

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

0
Accordingly, 26 CFR part 301 is amended as follows:

PART 301--PROCEDURE AND ADMINISTRATION

0
Paragraph 1. The authority citation for part 301 continues to read in 
part as follows:

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


0
Par. 2. Section 301.6343-2 is amended as follows:
0
1. Paragraphs (a)(1) introductory text and (b) introductory text are 
revised.
0
2. Paragraph (e) is revised.
    The revisions read as follows:


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

    (a) Return of property--(1) General rule. If the Internal Revenue 
Service (IRS) determines that property has been wrongfully levied upon, 
the IRS may return--
* * * * *
    (b) Request for return of property. A written request for the 
return of property wrongfully levied upon must be given to the IRS 
official, office and address specified in IRS Publication 4528, 
``Making an Administrative Wrongful Levy Claim Under Internal Revenue 
Code (IRC) Section 6343(b),'' or any successor publication. The 
relevant IRS publications may be downloaded from the IRS internet site 
at http://www.irs.gov. Under this section, a request for the return of 
property wrongfully levied upon is not effective if it is given to an 
office other than the office listed in the relevant publication. The 
written request must contain the following information--
* * * * *
    (e) Effective/applicability date. These regulations are effective 
on July 8, 2008.


Sec.  301.6343-2T  [Removed].

0
Par. 3. Section 301.6343-2T is removed.
0
Par. 4. Section 301.7425-3 is amended as follows:
0
1. Paragraphs (a)(1), (b)(1), (b)(2), (c)(1), (d)(2), (d)(3), and 
(d)(4) are revised.
0
2. Paragraph (a)(2)(iii) Example 2 is amended by removing the language 
``district director'' and adding the language ``IRS'' in its place 
wherever it appears.
0
3. Paragraph (e) is revised.
    The revisions and additions read as follows:


Sec.  301.7425-3  Discharge of liens; special rules.

    (a) Notice of sale requirements--(1) In general. Except in the case 
of the sale of perishable goods described in paragraph (c) of this 
section, a notice (as described in paragraph (d) of this section) of a 
nonjudicial sale shall be given, in writing by registered or certified 
mail or by personal service, not less than 25 days prior to the date of 
sale (determined under the provisions of Sec.  301.7425-2(b)), to the 
Internal Revenue Service (IRS) official, office and address specified 
in IRS Publication 786, ``Instructions for Preparing a Notice of 
Nonjudicial Sale of Property and Application for Consent to Sale,'' or 
any successor publication. The relevant IRS publications may be 
downloaded from the IRS Internet site at http://www.irs.gov. Under this 
section, a notice of sale is not effective if it is given to an office 
other than the office listed in the relevant publication. The 
provisions of sections 7502 (relating to timely mailing treated as 
timely filing) and 7503 (relating to time for performance of acts where 
the last day falls on Saturday, Sunday, or a legal holiday) apply in 
the case of notices required to be made under this paragraph.
* * * * *
    (b) Consent to sale--(1) In general. Notwithstanding the notice of 
sale provisions of paragraph (a) of this section, a nonjudicial sale of 
property

[[Page 38917]]

shall discharge or divest the property of the lien and title of the 
United States if the IRS consents to the sale of the property free of 
the lien or title. Pursuant to section 7425(c)(2), where adequate 
protection is afforded the lien or title of the United States, the IRS 
may, in its discretion, consent with respect to the sale of property in 
appropriate cases. Such consent shall be effective only if given in 
writing and shall be subject to such limitations and conditions as the 
IRS may require. However, the IRS may not consent to a sale of property 
under this section after the date of sale, as determined under Sec.  
301.7425-2(b). For provisions relating to the authority of the IRS to 
release a lien or discharge property subject to a tax lien, see section 
6325 and the section 6325 regulations.
    (2) Application for consent. Any person desiring the IRS's consent 
to sell property free of a tax lien or a title derived from the 
enforcement of a tax lien of the United States in the property shall 
submit to the IRS, at the office and address specified in the relevant 
IRS publications, a written application, in triplicate, declaring that 
it is made under penalties of perjury, and requesting that such consent 
be given. The application shall contain the information required in the 
case of a notice of sale, as set forth in paragraph (d)(1) of this 
section, and, in addition, shall contain a statement of the reasons why 
the consent is desired.
    (c) Sale of perishable goods--(1) In general. A notice (as 
described in paragraph (d) of this section) of a nonjudicial sale of 
perishable goods (as defined in paragraph (c)(2) of this section) shall 
be given in writing, by registered or certified mail or delivered by 
personal service, at any time before the sale, to the IRS official and 
office specified in the relevant IRS publications, at the address 
specified in such publications. Under this section, a notice of sale is 
not effective if it is given to an office other than the office listed 
in the relevant publication. If a notice of a nonjudicial sale is 
timely given in the manner described in this paragraph, the nonjudicial 
sale shall discharge or divest the tax lien, or a title derived from 
the enforcement of a tax lien, of the United States in the property. 
The provisions of sections 7502 (relating to timely mailing treated as 
timely filing) and 7503 (relating to time for performance of acts where 
the last day falls on Saturday, Sunday, or a legal holiday) apply in 
the case of notices required to be made under this paragraph. The 
seller of the perishable goods shall hold the proceeds (exclusive of 
costs) of the sale as a fund, for not less than 30 days after the date 
of the sale, subject to the liens and claims of the United States, in 
the same manner and with the same priority as the liens and claims of 
the United States had with respect to the property sold. If the seller 
fails to hold the proceeds of the sale in accordance with the 
provisions of this paragraph and if the IRS asserts a claim to the 
proceeds within 30 days after the date of sale, the seller shall be 
personally liable to the United States for an amount equal to the value 
of the interest of the United States in the fund. However, even if the 
proceeds of the sale are not so held by the seller, but all the other 
provisions of this paragraph are satisfied, the buyer of the property 
at the sale takes the property free of the liens and claims of the 
United States. In the event of a postponement of the scheduled sale of 
perishable goods, the seller is not required to notify the IRS of the 
postponement. For provisions relating to the authority of the IRS to 
release a lien or discharge property subject to a tax lien, see section 
6325 and the regulations.
* * * * *
    (d) * * *
    (2) Inadequate notice. Except as otherwise provided in this 
paragraph, a notice of sale described in paragraph (a) of this section 
that does not contain the information described in paragraph (d)(1) of 
this section shall be considered inadequate by the IRS. If the IRS 
determines that the notice is inadequate, the IRS will give written 
notification of the items of information which are inadequate to the 
person who submitted the notice. A notice of sale that does not contain 
the name and address of the person submitting such notice shall be 
considered to be inadequate for all purposes without notification of 
any specific inadequacy. In any case where a notice of sale does not 
contain the information required under paragraph (d)(1)(ii) of this 
section with respect to a Notice of Federal Tax Lien, the IRS may give 
written notification of such omission without specification of any 
other inadequacy and such notice of sale shall be considered inadequate 
for all purposes. In the event the IRS gives notification that the 
notice of sale is inadequate, a notice complying with the provisions of 
this section (including the requirement that the notice be given not 
less than 25 days prior to the sale in the case of a notice described 
in paragraph (a) of this section) must be given. However, in accordance 
with the provisions of paragraph (b)(1) of this section, in such a case 
the IRS may, in its discretion, consent to the sale of the property 
free of the lien or title of the United States even though notice of 
the sale is given less than 25 days prior to the sale. In any case 
where the person who submitted a timely notice, which indicates his 
name and address, does not receive more than 5 days prior to the date 
of sale written notification from the IRS that the notice is 
inadequate, the notice shall be considered adequate for purposes of 
this section.
    (3) Acknowledgment of notice. If a notice of sale described in 
paragraph (a) or (c) of this section is submitted in duplicate to the 
IRS with a written request that receipt of the notice be acknowledged 
and returned to the person giving the notice, this request will be 
honored by the IRS. The acknowledgment by the IRS will indicate the 
date and time of the receipt of the notice.
    (4) Disclosure of adequacy of notice. The IRS is authorized to 
disclose, to any person who has a proper interest, whether an adequate 
notice of sale was given under paragraph (d)(1) of this section. Any 
person desiring this information should submit to the IRS a written 
request that clearly describes the property sold or to be sold, 
identifies the applicable notice of lien, gives the reasons for 
requesting the information, and states the name and address of the 
person making the request. The request should be submitted to the IRS 
official, office and address specified in IRS Publication 4235, 
``Technical Services (Advisory) Group Addresses,'' or any successor 
publication. The relevant IRS publications may be downloaded from the 
IRS Internet site at http://www.irs.gov.
    (e) Effective/applicability date. These regulations are effective 
on July 8, 2008.

Sec.  301.7425-3T  [Removed].

0
Par. 5. Section 301.7425-3T is removed.

Linda E. Stiff,
Deputy Commissioner for Services and Enforcement.
    Approved: June 30, 2008.
Eric Solomon,
Assistant Secretary of the Treasury (Tax Policy).
 [FR Doc. E8-15460 Filed 7-7-08; 8:45 am]
BILLING CODE 4830-01-P