[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: 26CFR301.7401-1]

[Page 492]
 
                       TITLE 26--INTERNAL REVENUE
 
    CHAPTER I--INTERNAL REVENUE SERVICE, DEPARTMENT OF THE TREASURY 
                               (CONTINUED)
 
PART 301_PROCEDURE AND ADMINISTRATION--Table of Contents
 
                          Judicial Proceedings
 
Sec. 301.7401-1  Authorization.

                   Civil Actions by the United States


    (a) In general. No civil action for the collection or recovery of 
taxes, or of any fine, penalty, or forfeiture, shall be commenced unless 
the Commissioner (or the Director, Alcohol, Tobacco and Firearms 
Division, with respect to the provisions of subtitle E of the Code), or 
the Chief Counsel for the Internal Revenue Service or his delegate 
authorizes or sanctions the proceedings and the Attorney General or his 
delegate directs that the action be commenced.
    (b) Property held by banks. The Commissioner shall not authorize or 
sanction any civil action for the collection or recovery of taxes, or of 
any fine, penalty, or forfeiture, from any deposits held in a foreign 
office of a bank engaged in the banking business in the United States or 
a possession of the United States unless the Commissioner believes--
    (1) That the taxpayer is within the jurisdiction of a U.S. court at 
the time the civil action is authorized or sanctioned and that the bank 
is in possession of (or obligated with respect to) deposits of the 
taxpayer in an office of the bank outside the United States or a 
possession of the United States; or
    (2) That the taxpayer is not within the jurisdiction of a U.S. court 
at the time the civil action is authorized or sanctioned, that the bank 
is in possession of (or obligated with respect to) deposits of the 
taxpayer in an office outside the United States or a possession of the 
United States, and that such deposits consist, in whole or in part, of 
funds transferred from the United States or a possession of the United 
States in order to hinder or delay the collection of a tax imposed by 
the Code.

For purposes of this paragraph, the term ``possession of the United 
States'' includes Guam, the Midway Islands, the Panama Canal Zone, the 
Commonwealth of Puerto Rico, American Samoa, the Virgin Islands, and 
Wake Island.

[32 FR 15241, Nov. 3, 1967, as amended by T.D. 7188, 37 FR 12796, June 
29, 1972]