Laws: Cases and Codes : U.S. Code : Title 26 : Section 6331



   

U.S. Code as of: 01/05/99

Section 6331. Levy and distraint 

 
    (a) Authority of Secretary
      If any person liable to pay any tax neglects or refuses to pay
    the same within 10 days after notice and demand, it shall be lawful
    for the Secretary to collect such tax (and such further sum as
    shall be sufficient to cover the expenses of the levy) by levy upon
    all property and rights to property (except such property as is
    exempt under section 6334) belonging to such person or on which
    there is a lien provided in this chapter for the payment of such
    tax.  Levy may be made upon the accrued salary or wages of any
    officer, employee, or elected official, of the United States, the
    District of Columbia, or any agency or instrumentality of the
    United States or the District of Columbia, by serving a notice of
    levy on the employer (as defined in section 3401(d)) of such
    officer, employee, or elected official.  If the Secretary makes a
    finding that the collection of such tax is in jeopardy, notice and
    demand for immediate payment of such tax may be made by the
    Secretary and, upon failure or refusal to pay such tax, collection
    thereof by levy shall be lawful without regard to the 10-day period
    provided in this section.
    (b) Seizure and sale of property
      The term ''levy'' as used in this title includes the power of
    distraint and seizure by any means.  Except as otherwise provided
    in subsection (e), a levy shall extend only to property possessed
    and obligations existing at the time thereof.  In any case in which
    the Secretary may levy upon property or rights to property, he may
    seize and sell such property or rights to property (whether real or
    personal, tangible or intangible).
    (c) Successive seizures
      Whenever any property or right to property upon which levy has
    been made by virtue of subsection (a) is not sufficient to satisfy
    the claim of the United States for which levy is made, the
    Secretary may, thereafter, and as often as may be necessary,
    proceed to levy in like manner upon any other property liable to
    levy of the person against whom such claim exists, until the amount
    due from him, together with all expenses, is fully paid.
    (d) Requirement of notice before levy
      (1) In general
        Levy may be made under subsection (a) upon the salary or wages
      or other property of any person with respect to any unpaid tax
      only after the Secretary has notified such person in writing of
      his intention to make such levy.
      (2) 30-day requirement
        The notice required under paragraph (1) shall be -
          (A) given in person,
          (B) left at the dwelling or usual place of business of such
        person, or
          (C) sent by certified or registered mail to such persons's
        last known address,
      no less than 30 days before the day of the levy.
      (3) Jeopardy
        Paragraph (1) shall not apply to a levy if the Secretary has
      made a finding under the last sentence of subsection (a) that the
      collection of tax is in jeopardy.
      (4) Information included with notice
        The notice required under paragraph (1) shall include a brief
      statement which sets forth in simple and nontechnical terms -
          (A) the provisions of this title relating to levy and sale of
        property,
          (B) the procedures applicable to the levy and sale of
        property under this title,
          (C) the administrative appeals available to the taxpayer with
        respect to such levy and sale and the procedures relating to
        such appeals,
          (D) the alternatives available to taxpayers which could
        prevent levy on the property (including installment agreements
        under section 6159),
          (E) the provisions of this title relating to redemption of
        property and release of liens on property, and
          (F) the procedures applicable to the redemption of property
        and the release of a lien on property under this title.
    (e) Continuing levy on salary and wages
      The effect of a levy on salary or wages payable to or received by
    a taxpayer shall be continuous from the date such levy is first
    made until such levy is released under section 6343.
    (f) Uneconomical levy
      No levy may be made on any property if the amount of the expenses
    which the Secretary estimates (at the time of levy) would be
    incurred by the Secretary with respect to the levy and sale of such
    property exceeds the fair market value of such property at the time
    of levy.
    (g) Levy on appearance date of summons
      (1) In general
        No levy may be made on the property of any person on any day on
      which such person (or officer or employee of such person) is
      required to appear in response to a summons issued by the
      Secretary for the purpose of collecting any underpayment of tax.
      (2) No application in case of jeopardy
        This subsection shall not apply if the Secretary finds that the
      collection of tax is in jeopardy.
    (h) Continuing levy on certain payments
      (1) In general
        If the Secretary approves a levy under this subsection, the
      effect of such levy on specified payments to or received by a
      taxpayer shall be continuous from the date such levy is first
      made until such levy is released.  Notwithstanding section 6334,
      such continuous levy shall attach to up to 15 percent of any
      specified payment due to the taxpayer.
      (2) Specified payment
        For the purposes of paragraph (1), the term ''specified
      payment'' means -
          (A) any Federal payment other than a payment for which
        eligibility is based on the income or assets (or both) of a
        payee,
          (B) any payment described in paragraph (4), (7), (9), or (11)
        of section 6334(a), and
          (C) any annuity or pension payment under the Railroad
        Retirement Act or benefit under the Railroad Unemployment
        Insurance Act.
    (i) No levy during pendency of proceedings for refund of divisible
        tax
      (1) In general
        No levy may be made under subsection (a) on the property or
      rights to property of any person with respect to any unpaid
      divisible tax during the pendency of any proceeding brought by
      such person in a proper Federal trial court for the recovery of
      any portion of such divisible tax which was paid by such person
      if -
          (A) the decision in such proceeding would be res judicata
        with respect to such unpaid tax; or
          (B) such person would be collaterally estopped from
        contesting such unpaid tax by reason of such proceeding.
      (2) Divisible tax
        For purposes of paragraph (1), the term ''divisible tax'' means
      -
          (A) any tax imposed by subtitle C; and
          (B) the penalty imposed by section 6672 with respect to any
        such tax.
      (3) Exceptions
        (A) Certain unpaid taxes
          This subsection shall not apply with respect to any unpaid
        tax if -
            (i) the taxpayer files a written notice with the Secretary
          which waives the restriction imposed by this subsection on
          levy with respect to such tax; or
            (ii) the Secretary finds that the collection of such tax is
          in jeopardy.
        (B) Certain levies
          This subsection shall not apply to -
            (i) any levy to carry out an offset under section 6402; and
            (ii) any levy which was first made before the date that the
          applicable proceeding under this subsection commenced.
      (4) Limitation on collection activity; authority to enjoin
          collection
        (A) Limitation on collection
          No proceeding in court for the collection of any unpaid tax
        to which paragraph (1) applies shall be begun by the Secretary
        during the pendency of a proceeding under such paragraph.  This
        subparagraph shall not apply to -
            (i) any counterclaim in a proceeding under such paragraph;
          or
            (ii) any proceeding relating to a proceeding under such
          paragraph.
        (B) Authority to enjoin
          Notwithstanding section 7421(a), a levy or collection
        proceeding prohibited by this subsection may be enjoined
        (during the period such prohibition is in force) by the court
        in which the proceeding under paragraph (1) is brought.
      (5) Suspension of statute of limitations on collection
        The period of limitations under section 6502 shall be suspended
      for the period during which the Secretary is prohibited under
      this subsection from making a levy.
      (6) Pendency of proceeding
        For purposes of this subsection, a proceeding is pending
      beginning on the date such proceeding commences and ending on the
      date that a final order or judgment from which an appeal may be
      taken is entered in such proceeding.
    (j) No levy before investigation of status of property
      (1) In general
        For purposes of applying the provisions of this subchapter, no
      levy may be made on any property or right to property which is to
      be sold under section 6335 until a thorough investigation of the
      status of such property has been completed.
      (2) Elements in investigation
        For purposes of paragraph (1), an investigation of the status
      of any property shall include -
          (A) a verification of the taxpayer's liability;
          (B) the completion of an analysis under subsection (f);
          (C) the determination that the equity in such property is
        sufficient to yield net proceeds from the sale of such property
        to apply to such liability; and
          (D) a thorough consideration of alternative collection
        methods.
    (k) No levy while certain offers pending or installment agreement
        pending or in effect
      (1) Offer-in-compromise pending
        No levy may be made under subsection (a) on the property or
      rights to property of any person with respect to any unpaid tax -
          (A) during the period that an offer-in-compromise by such
        person under section 7122 of such unpaid tax is pending with
        the Secretary; and
          (B) if such offer is rejected by the Secretary, during the 30
        days thereafter (and, if an appeal of such rejection is filed
        within such 30 days, during the period that such appeal is
        pending).
      For purposes of subparagraph (A), an offer is pending beginning
      on the date the Secretary accepts such offer for processing.
      (2) Installment agreements
        No levy may be made under subsection (a) on the property or
      rights to property of any person with respect to any unpaid tax -
          (A) during the period that an offer by such person for an
        installment agreement under section 6159 for payment of such
        unpaid tax is pending with the Secretary;
          (B) if such offer is rejected by the Secretary, during the 30
        days thereafter (and, if an appeal of such rejection is filed
        within such 30 days, during the period that such appeal is
        pending);
          (C) during the period that such an installment agreement for
        payment of such unpaid tax is in effect; and
          (D) if such agreement is terminated by the Secretary, during
        the 30 days thereafter (and, if an appeal of such termination
        is filed within such 30 days, during the period that such
        appeal is pending).
      (3) Certain rules to apply
        Rules similar to the rules of paragraphs (3), (4), and (5) of
      subsection (i) shall apply for purposes of this subsection.
    (l) Cross references
          (1) For provisions relating to jeopardy, see subchapter A of
        chapter 70.
          (2) For proceedings applicable to sale of seized property see
        section 6335.
          (3) For release and notice of release of levy, see section
        6343.