[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: 26CFR301.6503(f)-1]

[Page 377-378]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 301_PROCEDURE AND ADMINISTRATION--Table of Contents
 
                               Limitations
 
Sec. 301.6503(f)-1  Suspension of running of period of limitation; wrongful 
seizure of property of third party.

    The running of the period of limitations on collection after 
assessment prescribed in section 6502 (relating to collection after 
assessment) shall be suspended for a period equal to a period beginning 
on the date property (including money) is wrongfully seized or received 
by a district director and ending on the date 30 days after the date on 
which the district director returns the property pursuant to section 
6343(b) (relating to authority to return property) or the date 30 days 
after the date on which a judgment secured pursuant to section 7426 
(relating to civil actions by persons other than taxpayers) with respect 
to such property becomes final. The running of the period of limitations 
on collection after assessment shall be suspended under this section 
only with respect to the amount of such assessment which is equal to the 
amount of money or the value of specific property returned. This section 
applies in the case of property wrongfully seized or received after 
November 2, 1966.

    Example. On June 1, 1968 (at which time 10 months remain before the 
period of limitations on collection after assessment will expire), the 
district director wrongfully seizes $1,000 in B's account in Bank X and 
properly seizes $500 in taxpayer A's account in Bank Y

[[Page 378]]

in an attempt to satisfy A's assessed tax liability of $1,500. The 
district director determines that the $1,000 seized in Bank X was not 
the property of taxpayer A and, on March 1, 1969, he returns the $1,000 
to B. As a result of the wrongful seizure, the running of the period of 
limitations on collection after assessment of the amount owed by 
taxpayer A is suspended for the 9-month period (beginning June 1, 1968, 
when the money was wrongfully seized and ending March 1, 1969, when the 
money was returned to B), plus 30 days. Therefore, the period of 
limitations on collection after assessment prescribed in section 6502 
will not expire until February 1, 1970, which is 10 months plus 30 days 
after the money was returned.

[T.D. 7121, 36 FR 10783, June 3, 1971. Redesignated by T.D. 7838, 47 FR 
44252, Oct. 7, 1982]