[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: 26CFR301.6335-1]

[Page 298-302]
 
                       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. 301.6335-1  Sale of seized property.

    (a) Notice of seizure. As soon as practicable after seizure of 
property, the internal revenue officer seizing the property shall give 
notice in writing to the owner of the property (or, in the case of 
personal property, to the possessor thereof). The written notice shall 
be delivered to the owner (or to the possessor, in the case of personal 
property) or left at his usual place of abode or business if he has such 
within the internal revenue district where the seizure is made. If the 
owner cannot be readily located, or has no dwelling or place of business 
within such district, the notice may be mailed to his last known 
address. Such notice shall specify the sum demanded and shall contain, 
in the case of personal property, a list sufficient to identify the 
property seized and, in the case of real property, a description with 
reasonable certainty of the property seized.
    (b) Notice of sale. (1) As soon as practicable after seizure of the 
property, the district director shall give notice of sale in writing to 
the owner. Such notice shall be delivered to the owner or left at his 
usual place of abode or business if located within the internal revenue 
district where the seizure is made. If the owner cannot be readily 
located, or has no dwelling or place of business within such district, 
the notice may be mailed to his last known address. For further guidance 
regarding the definition of last known address, see Sec. 301.6212-2. 
The notice shall specify the property to be sold, and the time, place, 
manner, and conditions of the sale thereof, and shall expressly state 
that only the right, title, and interest of the delinquent taxpayer in 
and to such property is to be offered for sale. The notice shall also be 
published in some newspaper published in the county wherein the seizure 
is made or in a newspaper generally circulated in that county. For 
example, if a newspaper of general circulation in a county but not 
published in that county will reach more potential bidders for the 
property to be sold than a newspaper published within the county, or if 
there is a newspaper of general circulation within the county but no 
newspaper published within the county, the district director may cause 
public notice of the sale to be given in the newspaper of general 
circulation within the county. If there is no newspaper published or 
generally circulated in the county, the notice shall be posted at the 
post office nearest the place where the seizure is made, and in not less 
than two other public places.
    (2) The district director may use other methods of giving notice of 
sale and of advertising seized property in addition to those referred to 
in subparagraph (1) of this paragraph (b), when he believes that the 
nature of the property to be sold is such that a wider

[[Page 299]]

or more specialized advertising coverage will enhance the possibility of 
obtaining a higher price for the property.
    (3) Whenever levy is made without regard to the 10-day period 
provided in section 6331(a) (relating to cases in which collection is in 
jeopardy), a public notice of sale of the property seized shall not be 
made within such 10-day period unless section 6336 (relating to 
perishable goods) is applicable.
    (c) Time, place, manner, and conditions of sale. The time, place, 
manner, and conditions of the sale of property seized by levy shall be 
as follows:
    (1) Time and place of sale. The time of sale shall not be less than 
10 days nor more than 40 days from the time of giving public notice 
under section 6335(b) (see paragraph (b) of this section). The place of 
sale shall be within the county in which the property is seized, except 
that if it appears to the district director under whose supervision the 
seizure was made that substantially higher bids may be obtained for the 
property if the sale is held at a place outside such county, he may 
order that the sale be held in such other place. The sale shall be held 
at the time and place stated in the notice of sale.
    (2) Adjournment of sale. When it appears to the district director 
that an adjournment of the sale will best serve the interest of the 
United States or that of the taxpayer, the district director may 
adjourn, or cause the internal revenue officer conducting the sale to 
adjourn, the sale from time to time, but the date of the sale shall not 
be later than one month after the date fixed in the original notice of 
sale.
    (3) Determinations relating to minimum price--(i) Minimum price. 
Before the sale of property seized by levy, the district director shall 
determine a minimum price, taking into account the expenses of levy and 
sale, for which the property shall be sold. The internal revenue officer 
conducting the sale may either announce the minimum price before the 
sale begins, or defer announcement of the minimum price until after the 
receipt of the highest bid, in which case, if the highest bid is greater 
than the minimum price, no announcement of the minimum price shall be 
made.
    (ii) Purchase by the United States. Before the sale of property 
seized by levy, the district director shall determine whether the 
purchase of property by the United States at the minimum price would be 
in the best interest of the United States. In determining whether the 
purchase of property would be in the best interest of the United States, 
the district director may consider all relevant facts and circumstances 
including for example--
    (a) Marketability of the property;
    (b) Cost of maintaining the property;
    (c) Cost of repairing or restoring the property;
    (d) Cost of transporting the property;
    (e) Cost of safeguarding the property;
    (f) Cost of potential toxic waste cleanup; and
    (g) Other factors pertinent to the type of property.
    (iii) Effective date. This paragraph (c)(3) applies to 
determinations relating to minimum price made on or after December 17, 
1996.
    (4) Disposition of property at sale--(i) Sale to highest bidder at 
or above minimum price. If one or more persons offer to buy the property 
for at least the amount of the minimum price, the property shall be sold 
to the highest bidder.
    (ii) Property deemed sold to United States at minimum price. If no 
one offers at least the amount of the minimum price for the property and 
the Secretary has determined that it would be in the best interest of 
the United States to purchase the property for the minimum price, the 
property shall be declared to be sold to the United States for the 
minimum price.
    (iii) Release to owner. If the property is not declared to be sold 
under paragraph (c)(4)(i) or (ii) of this section, the property shall be 
released to the owner of the property and the expense of the levy and 
sale shall be added to the amount of tax for the collection of which the 
United States made the levy. Any property released under this paragraph 
(c)(4)(iii) shall remain subject to any lien imposed by subchapter C of 
chapter 64 of subtitle F of the Internal Revenue Code.

[[Page 300]]

    (iv) Effective date. This paragraph (c)(4) applies to dispositions 
of property at sale made on or after December 17, 1996.
    (5) Offering of property--(i) Sale of indivisible property. If any 
property levied upon is not divisible, so as to enable the district 
director by sale of a part thereof to raise the whole amount of the tax 
and expenses of levy and sale, the whole of such property shall be sold. 
For application of surplus proceeds of sale, see section 6342(b).
    (ii) Separately, in groups, or in the aggregate. The seized property 
may be offered for sale--
    (a) As separate items, or
    (b) As groups of items, or
    (c) In the aggregate, or
    (d) Both as separate items (or in groups) and in the aggregate. In 
such cases, the property shall be sold under the method which produces 
the highest aggregate amount.

The district director shall select whichever of the foregoing methods of 
offering the property for sale as, in his opinion, is most feasible 
under all the facts and circumstances of the case, except that if the 
property to be sold includes both real and personal property, only the 
personal property may be grouped for the purpose of offering such 
property for sale. However, real and personal property may be offered 
for sale in the aggregate, provided the real property, as separate 
items, and the personal property as a group, or as groups, or as 
separate items, are first offered separately.
    (iii) Condition of title and of property. Only the right, title, and 
interest of the delinquent taxpayer in and to the property seized shall 
be offered for sale, and such interest shall be offered subject to any 
prior outstanding mortgages, encumbrances, or other liens in favor of 
third parties which are valid as against the delinquent taxpayer and are 
superior to the lien of the United States. All seized property shall be 
offered for sale ``as is'' and ``where is'' and without recourse against 
the United States. No guaranty or warranty, express or implied, shall be 
made by the internal revenue officer offering the property for sale, as 
to the validity of the title, quality, quantity, weight, size, or 
condition of any of the property, or its fitness for any use or purpose. 
No claim shall be considered for allowance or adjustment or for 
rescission of the sale based upon failure of the property to conform 
with any representation, express or implied.
    (iv) Terms of payment. The property shall be offered for sale upon 
whichever of the following terms is fixed by the district director in 
the public notice of sale:
    (a) Payment in full upon acceptance of the highest bid, without 
regard to the amount of such bid, or
    (b) If the aggregate price of all property purchased by a successful 
bidder at the sale is more than $200, an initial payment of $200 or 20 
percent of the purchase price, whichever is the greater, and payment of 
the balance (including all costs incurred for the protection or 
preservation of the property subsequent to the sale and prior to final 
payment) within a specified period, not to exceed 1 month from the date 
of the sale.
    (6) Method of sale. The district director shall sell the property 
either--
    (i) At public auction, at which open competitive bids shall be 
received, or
    (ii) At public sale under sealed bids. The following rules, in 
addition to the other rules provided in this paragraph, shall be 
applicable to public sale under sealed bids:
    (a) Invitation to bidders. Bids shall be solicited through a public 
notice of sale.
    (b) Form for use by bidders. A bid shall be submitted on a form 
which will be furnished by the district director upon request. The form 
shall be completed in accordance with the instructions thereon.
    (c) Remittance with bid. If the total bid is $200 or less, the full 
amount of the bid shall be submitted therewith. If the total bid is more 
than $200, 20 percent of such bid or $200, whichever is greater, shall 
be submitted therewith. (In the case of alternative bids submitted by 
the same bidder for items of property offered separately, or in groups, 
or in the aggregate, the bidder shall remit the full amount of the 
highest alternative bid submitted, if that bid is $200 or less. If the 
highest alternative bid submitted is more than $200, the bidder shall 
remit 20 percent of the

[[Page 301]]

highest alternative bid or $200, whichever is greater.) Such remittance 
shall be by a certified, cashier's, or treasurer's check drawn on any 
bank or trust company incorporated under the laws of the United States 
or under the laws of any State, Territory, or possession of the United 
States, or by a U.S. postal, bank, express, or telegraph money order.
    (d) Time for receiving and opening bids. Each bid shall be submitted 
in a securely sealed envelope. The bidder shall indicate in the upper 
left hand corner of the envelope his name and address and the time and 
place of sale as announced in the public notice of sale. A bid will not 
be considered unless it is received by the internal revenue officer 
conducting the sale prior to the opening of the bids. The bids will be 
opened at the time and place stated in the notice of sale, or at the 
time fixed in the announcement of the adjournment of the sale.
    (e) Consideration of bids. The public notice of sale shall specify 
whether the property is to be sold separately, by groups, or in the 
aggregate or by a combination of these methods, as provided in 
subparagraph (4)(ii) of this paragraph. If the notice specifies an 
alternative method, bidders may submit bids under one or more of the 
alternatives. In case of error in the extension of prices in any bid, 
the unit price will govern. The internal revenue officer conducting the 
sale shall have the right to waive any technical defects in a bid. In 
the event two or more highest bids are equal in amount, the internal 
revenue officer conducting the sale shall determine the successful 
bidder by drawing lots. After the opening, examination, and 
consideration of all bids, the internal revenue officer conducting the 
sale shall announce the amount of the highest bid or bids and the name 
of the successful bidder or bidders. Any remittance submitted in 
connection with an unsuccessful bid shall be returned at the conclusion 
of the sale.
    (f) Withdrawal of bids. A bid may be withdrawn on written or 
telegraphic request received from the bidder prior to the time fixed for 
opening the bids. A technical defect in a bid confers no right on the 
bidder for the withdrawal of his bid after it has been opened.
    (7) Payment of bid price. All payments for property sold under this 
section shall be made by cash or by a certified, cashier's, or 
treasurer's check drawn on any bank or trust company incorporated under 
the laws of the United States or under the laws of any State, Territory, 
or possession of the United States, or by a U.S. postal, bank, express, 
or telegraph money order. If payment in full is required upon acceptance 
of the highest bid, the payment shall be made at such time. If deferred 
payment is permitted, the initial payment shall be made upon acceptance 
of the bid, and the balance shall be paid on or before the date fixed 
for payment thereof. Any remittance submitted with a successful sealed 
bid shall be applied toward the purchase price.
    (8) Delivery and removal of personal property. Responsibility of the 
United States for the protection or preservation of seized personal 
property shall cease immediately upon acceptance of the highest bid. The 
risk of loss is on the purchaser of personal property upon acceptance of 
his bid. Possession of any personal property shall not be delivered to 
the purchaser until the purchase price has been paid in full. If payment 
of part of the purchase price for personal property is deferred, the 
United States will retain possession of such property as security for 
the payment of the balance of the purchase price and, as agent for the 
purchaser, will cause the property to be cared for until the purchase 
price has been paid in full or the sale is declared null and void for 
failure to make full payment of the purchase price. In such case, all 
charges and expenses incurred in caring for the property after the 
acceptance of the bid shall be borne by the purchaser.
    (9) Default in payment. If payment in full is required upon 
acceptance of the bid and is not then and there paid, the internal 
revenue officer conducting the sale shall forthwith proceed again to 
sell the property in the manner provided in section 6335(e) and this 
section. If the conditions of the sale permit part of the payment to be 
deferred, and if such part is not paid within the

[[Page 302]]

prescribed period, suit may be instituted against the purchaser for the 
purchase price or such part thereof as has not been paid, together with 
interest at the rate of 6 percent per annum from the date of the sale; 
or, in the discretion of the district director, the sale may be declared 
by the district director to be null and void for failure to make full 
payment of the purchase price and the property may again be advertised 
and sold as provided in subsections (b), (c), and (e) of section 6335 
and this section. In the event of such readvertisement and sale, any new 
purchaser shall receive such property or rights to property free and 
clear of any claim or right of the former defaulting purchaser, of any 
nature whatsoever, and the amount paid upon the bid price by such 
defaulting purchaser shall be forfeited to the United States.
    (10) Stay of sale of seized property pending Tax Court decision. For 
restrictions on sale of seized property pending Tax Court decision, see 
section 6863(b)(3) and Sec. 301.6863-2.
    (d) Right to request the sale of seized property--(1) In general. 
The owner of any property seized by levy may request that the district 
director sell such property within 60 days after such request, or within 
any longer period specified by the owner. The district director must 
comply with such a request unless the district director determines that 
compliance with the request is not in the best interests of the Internal 
Revenue Service and notifies the owner of such determination within the 
60 day period, or any longer period specified by the owner.
    (2) Procedures to request the sale of seized property--(i) Manner. A 
request for the sale of seized property shall be made in writing to the 
group manager of the revenue officer whose signature is on Levy Form 
668-B. If the owner does not know the group manager's name or address, 
the owner may send the request to the revenue officer, marked for the 
attention of his or her group manager.
    (ii) Form. The request for sale of seized property within 60 days, 
or such longer period specified by the owner, shall include:
    (A) The name, current address, current home and work telephone 
numbers and any convenient times to be contacted, and taxpayer 
identification number of the owner making the request;
    (B) A description of the seized property that is the subject of the 
request;
    (C) A copy of the notice of seizure, if available;
    (D) The period within which the owner is requesting that the 
property be sold; and
    (E) The signature of the owner or duly authorized representative. 
For purposes of these regulations, a duly authorized representative is 
any attorney, certified public accountant, enrolled actuary, or any 
other person permitted to represent the owner before the Internal 
Revenue Service who is not disbarred or suspended from practice before 
the Internal Revenue Service and who has written power of attorney 
executed by the owner.
    (3) Notification to owner. The group manager shall respond in 
writing to a request for sale of seized property as soon as practicable 
after receipt of such request and in no event later than 60 days after 
receipt of the request, or, if later, the date specified by the owner 
for the sale.

[32 FR 15241, Nov. 3, 1967, as amended by T.D. 7180, 37 FR 7319, Apr. 
13, 1972; T.D. 8398, 57 FR 7546, Mar. 3, 1992; T.D. 8691, 61 FR 66217, 
Dec. 17, 1996; T.D. 8939, 66 FR 2821, Jan. 12, 2001]