[Code of Federal Regulations]
[Title 26, Volume 18]
[Revised as of April 1, 2004]
From the U.S. Government Printing Office via GPO Access
[CITE: 26CFR301.6331-1]

[Page 280-283]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 301_PROCEDURE AND ADMINISTRATION--Table of Contents
 
               Seizure of Property for Collection of Taxes
 
Sec. 301.6331-1  Levy and distraint.

    (a) Authority to levy--(1) In general. If any person liable to pay 
any tax neglects or refuses to pay the tax within 10 days after notice 
and demand, the district director to whom the assessment is charged (or, 
upon his request, any other district director) may proceed to collect 
the tax by levy. The district director may levy upon any property, or 
rights to property, whether real or personal, tangible or intangible, 
belonging to the taxpayer. The district director may also levy upon 
property with respect to which there is a lien provided by section 6321 
or 6324 for the payment of the tax. For exemption of certain property 
from levy, see section 6334 and the regulations thereunder. As used in 
section 6331 and this section, the term ``tax'' includes any interest, 
additional amount, addition to tax, or assessable penalty, together with 
costs and expenses. Property subject to a Federal tax lien which has 
been sold or otherwise transferred by the taxpayer may be seized while 
in the hands of the transferee or any subsequent transferee. However, 
see provisions under

[[Page 281]]

sections 6323 and 6324 (a)(2) and (b) for protection of certain 
transferees against a Federal tax lien. Levy may be made by serving a 
notice of levy on any person in possession of, or obligated with respect 
to, property or rights to property subject to levy, including 
receivables, bank accounts, evidences of debt, securities, and salaries, 
wages, commissions, or other compensation. A levy on a bank reaches any 
interest that accrues on the taxpayer's balance under the terms of the 
bank's agreement with the depositor during the 21-day holding period 
provided for in section 6332(c). Except as provided in Sec. 301.6331-
1(b)(1) with regard to a levy on salary or wages, a levy extends only to 
property possessed and obligations which exist at the time of the levy. 
Obligations exist when the liability of the obligor is fixed and 
determinable although the right to receive payment thereof may be 
deferred until a later date. For example, if on the first day of the 
month a delinquent taxpayer sold personal property subject to an 
agreement that the buyer remit the purchase price on the last day of the 
month, a levy made on the buyer on the 10th day of the month would reach 
the amount due on the sale, although the buyer need not satisfy the levy 
by paying over the amount to the district director until the last day of 
the month. Similarly, a levy only reaches property in the possession of 
the person levied upon at the time the levy is made together with 
interest that accrues during the 21-day holding period provided for in 
section 6332(c). For example, a levy made on a bank with respect to the 
account of a delinquent taxpayer is satisfied if the bank surrenders the 
amount of the taxpayer's balance at the time the levy is made. The levy 
has no effect upon any subsequent deposit made in the bank by the 
taxpayer. Subsequent deposits may be reached only by a subsequent levy 
on the bank.
    (2) Jeopardy cases. If the district director finds that the 
collection of any tax is in jeopardy, he or she may make notice and 
demand for immediate payment of such tax 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 section 6331(a), the 30-day period 
provided in section 6331(d), or the limitation on levy provided in 
section 6331(g)(1).
    (3) Bankruptcy or receivership cases. During a bankruptcy proceeding 
or a receivership proceeding in either a Federal or a State court, the 
assets of the taxpayer are in general under the control of the court in 
which such proceeding is pending. Taxes cannot be collected by levy upon 
assets in the custody of a court, whether or not such custody is 
incident to a bankruptcy or receivership proceeding, except where the 
proceeding has progressed to such a point that the levy would not 
interfere with the work of the court or where the court grants 
permission to levy. Any assets which under applicable provisions of law 
are not under the control of the court may be levied upon, for example, 
property exempt from court custody under State law or the bankrupt's 
earnings and property acquired after the date of bankruptcy. However, 
levy upon such property is not mandatory and the Government may rely 
upon payment of taxes in the proceeding.
    (4) Certain types of compensation-- (i) Federal employees. Levy may 
be made upon the salary or wages of any officer or employee (including 
members of the Armed Forces), or elected or appointed official, of the 
United States, the District of Columbia, or any agency or 
instrumentality of either, by serving a notice of levy on the employer 
of the delinquent taxpayer. As used in this subdivision, the term 
``employer'' means (a) the officer or employee of the United States, the 
District of Columbia, or of the agency or instrumentality of the United 
States or the District of Columbia, who has control of the payment of 
the wages, or (b) any other officer or employee designated by the head 
of the branch, department, agency, or instrumentality of the United 
States or of the District of Columbia as the party upon whom service of 
the notice of levy may be made. If the head of such branch, department, 
agency or instrumentality designates an officer or employee other than 
one who has control of the payment of the wages, as the party upon whom 
service of the notice of levy may be made, such

[[Page 282]]

head shall promptly notify the Commissioner of the name and address of 
each officer or employee so designated and the scope or extent of his 
authority as such designee.
    (ii) State and municipal employees. Salaries, wages, or other 
compensation of any officer, employee, or elected or appointed official 
of a State or Territory, or of any agency, instrumentality, or political 
subdivision thereof, are also subject to levy to enforce collection of 
any Federal tax.
    (iii) Seamen. Notwithstanding the provisions of section 12 of the 
Seamen's Act of 1915 (46 U.S.C. 601), wages of seamen, apprentice 
seamen, or fishermen employed on fishing vessels are subject to levy. 
See section 6334(c).
    (5) Noncompetent Indians. Solely for purposes of sections 6321 and 
6331, any interest in restricted land held in trust by the United States 
for an individual noncompetent Indian (and not for a tribe) shall not be 
deemed to be property, or a right to property, belonging to such Indian.
    (b) Continuing levies and successive seizures--(1) Continuing effect 
of levy on salary and wages. A levy on salary or wages has continuous 
effect from the time the levy originally is made until the levy is 
released pursuant to section 6343. For this purpose, the term salary or 
wages includes compensation for services paid in the form of fees, 
commissions, bonuses, and similar items. The levy attaches to both 
salary or wages earned but not yet paid at the time of the levy, 
advances on salary or wages made subsequent to the date of the levy, and 
salary or wages earned and becoming payable subsequent to the date of 
the levy, until the levy is released pursuant to section 6343. In 
general, salaries or wages that are the subject of a continuing levy and 
are not exempt from levy under section 6334(a)(8) or (9), are to be paid 
to the district director, the service center director, or the compliance 
center director (director) on the same date the payor would otherwise 
pay over the money to the taxpayer. For example, if an individual 
normally is paid on the Wednesday following the close of each work week, 
a levy made upon his or her employer on any Monday would apply to both 
wages due for the prior work week and wages for succeeding work weeks as 
such wages become payable. In such a case, the levy would be satisfied 
if, on the first Wednesday after the levy and on each Wednesday 
thereafter until the employer receives a notice of release from levy 
described in section 6343, the employer pays over to the director wages 
that would otherwise be paid to the employee on such Wednesday (less any 
exempt amount pursuant to section 6334).
    (2) Successive seizures. Whenever any property or rights to property 
upon which a levy has been made are not sufficient to satisfy the claim 
of the United States for which the levy is made, the district director 
may thereafter, and as often as may be necessary, proceed to levy in 
like manner upon any other property or rights to property subject to 
levy of the person against whom such claim exists or on which there is a 
lien imposed by section 6321 or 6324 (or the corresponding provision of 
prior law) for the payment of such claim until the amount due from such 
person, together with all costs and expenses, is fully paid.
    (c) Service of notice of levy by mail. A notice of levy may be 
served by mailing the notice to the person upon whom the service of a 
notice of levy is authorized under paragraph (a)(1) of this section. In 
such a case the date and time the notice is delivered to the person to 
be served is the date and time the levy is made. If the notice is sent 
by certificated mail, return receipt requested, the date of delivery on 
the receipt is treated as the date the levy is made. If, after receipt 
of a notice of levy, an officer or other person authorized to act on 
behalf of the person served signs and notes the date and time of receipt 
on the notice of levy, the date and time so the contrary, the date and 
time of delivery.
    Any person may, upon written notice to the district director having 
audit jurisdiction over such person, have all notices of levy by mail 
sent to one designated office. After such a notice is received by the 
district director, notices of levy by mail will be sent to the 
designated office until a written notice withdrawing the request or a 
written notice designating a different office is received by the 
district director.

[[Page 283]]

    (d) Effective date. These regulations are effective December 10, 
1992.

[32 FR 15241, Nov. 3, 1967, as amended by T.D. 7139, 36 FR 15041, Aug. 
12, 1971; T.D. 7620, 44 FR 27987, May 14, 1979; T.D. 7874, 48 FR 10061, 
Mar. 10, 1983; T.D. 8558, 59 FR 38903, Aug. 1, 1994]