
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 26USC6332]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                Subtitle F--Procedure and Administration
 
                         CHAPTER 64--COLLECTION
 
        Subchapter D--Seizure of Property for Collection of Taxes
 
                              PART II--LEVY
 
Sec. 6332. Surrender of property subject to levy


(a) Requirement

    Except as otherwise provided in this section, any person in 
possession of (or obligated with respect to) property or rights to 
property subject to levy upon which a levy has been made shall, upon 
demand of the Secretary, surrender such property or rights (or discharge 
such obligation) to the Secretary, except such part of the property or 
rights as is, at the time of such demand, subject to an attachment or 
execution under any judicial process.

(b) Special rule for life insurance and endowment contracts

                           (1) In general

        A levy on an organization with respect to a life insurance or 
    endowment contract issued by such organization shall, without 
    necessity for the surrender of the contract document, constitute a 
    demand by the Secretary for payment of the amount described in 
    paragraph (2) and the exercise of the right of the person against 
    whom the tax is assessed to the advance of such amount. Such 
    organization shall pay over such amount 90 days after service of 
    notice of levy. Such notice shall include a certification by the 
    Secretary that a copy of such notice has been mailed to the person 
    against whom the tax is assessed at his last known address.

                      (2) Satisfaction of levy

        Such levy shall be deemed to be satisfied if such organization 
    pays over to the Secretary the amount which the person against whom 
    the tax is assessed could have had advanced to him by such 
    organization on the date prescribed in paragraph (1) for the 
    satisfaction of such levy, increased by the amount of any advance 
    (including contractual interest thereon) made to such person on or 
    after the date such organization had actual notice or knowledge 
    (within the meaning of section 6323(i)(1)) of the existence of the 
    lien with respect to which such levy is made, other than an advance 
    (including contractual interest thereon) made automatically to 
    maintain such contract in force under an agreement entered into 
    before such organization had such notice or knowledge.

                     (3) Enforcement proceedings

        The satisfaction of a levy under paragraph (2) shall be without 
    prejudice to any civil action for the enforcement of any lien 
    imposed by this title with respect to such contract.

(c) Special rule for banks

    Any bank (as defined in section 408(n)) shall surrender (subject to 
an attachment or execution under judicial process) any deposits 
(including interest thereon) in such bank only after 21 days after 
service of levy.

(d) Enforcement of levy

                  (1) Extent of personal liability

        Any person who fails or refuses to surrender any property or 
    rights to property, subject to levy, upon demand by the Secretary, 
    shall be liable in his own person and estate to the United States in 
    a sum equal to the value of the property or rights not so 
    surrendered, but not exceeding the amount of taxes for the 
    collection of which such levy has been made, together with costs and 
    interest on such sum at the underpayment rate established under 
    section 6621 from the date of such levy (or, in the case of a levy 
    described in section 6331(d)(3), from the date such person would 
    otherwise have been obligated to pay over such amounts to the 
    taxpayer). Any amount (other than costs) recovered under this 
    paragraph shall be credited against the tax liability for the 
    collection of which such levy was made.

                      (2) Penalty for violation

        In addition to the personal liability imposed by paragraph (1), 
    if any person required to surrender property or rights to property 
    fails or refuses to surrender such property or rights to property 
    without reasonable cause, such person shall be liable for a penalty 
    equal to 50 percent of the amount recoverable under paragraph (1). 
    No part of such penalty shall be credited against the tax liability 
    for the collection of which such levy was made.

(e) Effect of honoring levy

    Any person in possession of (or obligated with respect to) property 
or rights to property subject to levy upon which a levy has been made 
who, upon demand by the Secretary, surrenders such property or rights to 
property (or discharges such obligation) to the Secretary (or who pays a 
liability under subsection (d)(1)) shall be discharged from any 
obligation or liability to the delinquent taxpayer and any other person 
with respect to such property or rights to property arising from such 
surrender or payment.

(f) Person defined

    The term ``person,'' as used in subsection (a), includes an officer 
or employee of a corporation or a member or employee of a partnership, 
who as such officer, employee, or member is under a duty to surrender 
the property or rights to property, or to discharge the obligation.

(Aug. 16, 1954, ch. 736, 68A Stat. 784; Pub. L. 89-719, title I, 
Sec. 104(b), Nov. 2, 1966, 80 Stat. 1135; Pub. L. 93-625, 
Sec. 7(a)(2)(D), Jan. 3, 1975, 88 Stat. 2115; Pub. L. 94-455, title XII, 
Sec. 1209(d)(3), title XIX, Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 
1710, 1834; Pub. L. 99-514, title XV, Sec. 1511(c)(9), Oct. 22, 1986, 
100 Stat. 2745; Pub. L. 100-647, title I, Sec. 1015(t)(1), title VI, 
Sec. 6236(e), Nov. 10, 1988, 102 Stat. 3573, 3739; Pub. L. 101-508, 
title XI, Sec. 11704(a)(27), Nov. 5, 1990, 104 Stat. 1388-519.)


                               Amendments

    1990--Subsec. (a). Pub. L. 101-508 substituted ``this section'' for 
``subsections (b) and (c)''.
    1988--Subsec. (a). Pub. L. 100-647, Sec. 6236(e)(2)(A), substituted 
``subsections (b) and (c)'' for ``subsection (b)''.
    Subsec. (c). Pub. L. 100-647, Sec. 6236(e)(1), added subsec. (c). 
Former subsec. (c) redesignated (d).
    Subsec. (d). Pub. L. 100-647, Sec. 6236(e)(1), redesignated subsec. 
(c) as (d). Former subsec. (d) redesignated (e).
    Pub. L. 100-647, Sec. 1015(t)(1), inserted ``and any other person'' 
after ``delinquent taxpayer'' and struck out sentence at end providing 
that in the case of a levy which is satisfied pursuant to subsection 
(b), such organization shall also be discharged from any obligation or 
liability to any beneficiary arising from such surrender or payment.
    Subsec. (e). Pub. L. 100-647, Sec. 6236(e)(1), (2)(B), redesignated 
subsec. (d) as (e) and substituted ``subsection (d)(1)'' for 
``subsection (c)(1)''. Former subsec. (e) redesignated (f).
    Subsec. (f). Pub. L. 100-647, Sec. 6236(e)(1), redesignated subsec. 
(e) as (f).
    1986--Subsec. (c)(1). Pub. L. 99-514 substituted ``the underpayment 
rate established under section 6621'' for ``an annual rate established 
under section 6621''.
    1976--Subsecs. (a), (b). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck 
out ``or his delegate'' after ``Secretary'' wherever appearing.
    Subsec. (c)(1). Pub. L. 94-455, Secs. 1209(d)(3), 1906(b)(13)(A), 
inserted ``(or, in the case of a levy described in section 6331(d)(3), 
from the date such person would otherwise have been obligated to pay 
over such amounts to the taxpayer)'' after ``date of such levy'', and 
struck out ``or his delegate'' after ``Secretary''.
    Subsec. (d). Pub. L. 94-455, Sec. 1906(b)(13)(A), struck out ``or 
his delegate'' after ``Secretary''.
    1975--Subsec. (c)(1). Pub. L. 93-625 substituted ``an annual rate 
established under section 6621'' for ``the rate of 6 percent per 
annum''.
    1966--Subsec. (a). Pub. L. 89-719, Sec. 104(b)(1), substituted 
``Except as otherwise provided in subsection (b), any person'' for ``Any 
person''.
    Subsec. (b). Pub. L. 89-719, Sec. 104(b)(2), added subsec. (b). 
Former subsec. (b) redesignated, with amendments, as subsec. (c)(1).
    Subsec. (c). Pub. L. 89-719, Sec. 104(b)(2)-(4), redesignated as 
par. (1) provisions formerly set out as subsec. (b), inserted provisions 
that any amount other than costs recovered under par. (1) shall be 
credited against the tax liability for the collection of which the levy 
was made, and added par. (2). Former subsec. (c) redesignated (e).
    Subsec. (d). Pub. L. 89-719, Sec. 104(b)(4), added subsec. (d).
    Subsec. (e). Pub. L. 89-719, Sec. 104(b)(3), redesignated former 
subsec. (c) as (e).


                    Effective Date of 1988 Amendment

    Section 1015(t)(2) of Pub. L. 100-647 provided that: ``The amendment 
made by this subsection [amending this section] shall apply to levies 
issued after the date of the enactment of this Act [Nov. 10, 1988].''
    Amendment by section 6236(e) of Pub. L. 100-647 applicable to levies 
issued on or after July 1, 1989, see section 6236(h)(1) of Pub. L. 100-
647, set out as a note under section 6331 of this title.


                    Effective Date of 1986 Amendment

    Amendment by Pub. L. 99-514 applicable for purposes of determining 
interest for periods after Dec. 31, 1986, see section 1511(d) of Pub. L. 
99-514, set out as a note under section 47 of this title.


                    Effective Date of 1976 Amendment

    Amendment by section 1209(d)(3) of Pub. L. 94-455 effective only 
with respect to levies made after Feb. 28, 1977, see section 1209(e) of 
Pub. L. 94-455, as amended by section 2(c) of Pub. L. 94-528, Oct. 17, 
1976, 90 Stat. 2483, set out as a note under section 6334 of this title.


                    Effective Date of 1975 Amendment

    Amendment by Pub. L. 93-625 effective July 1, 1975, and applicable 
to amounts outstanding on such date or arising thereafter, see section 
7(e) of Pub. L. 93-625, set out as an Effective Date note under section 
6621 of this title.


                    Effective Date of 1966 Amendment

    Amendment by Pub. L. 89-719 applicable after Nov. 2, 1966, 
regardless of when title or lien of United States arose or when lien or 
interest of another person was acquired, with certain exceptions, see 
section 114(a)-(c) of Pub. L. 89-719, set out as a note under section 
6323 of this title.

                  Section Referred to in Other Sections

    This section is referred to in sections 6323, 6342 of this title; 
title 29 section 1368; title 30 section 934.
