
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: 26USC6342]

 
                     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. 6342. Application of proceeds of levy


(a) Collection of liability

    Any money realized by proceedings under this subchapter (whether by 
seizure, by surrender under section 6332 (except pursuant to subsection 
(c)(2) \1\ thereof), or by sale of seized property) or by sale of 
property redeemed by the United States (if the interest of the United 
States in such property was a lien arising under the provisions of this 
title) shall be applied as follows:
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    \1\ See References in Text note below.
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                    (1) Expense of levy and sale

        First, against the expenses of the proceedings;

            (2) Specific tax liability on seized property

        If the property seized and sold is subject to a tax imposed by 
    any internal revenue law which has not been paid, the amount 
    remaining after applying paragraph (1) shall then be applied against 
    such tax liability (and, if such tax was not previously assessed, it 
    shall then be assessed);

                (3) Liability of delinquent taxpayer

        The amount, if any, remaining after applying paragraphs (1) and 
    (2) shall then be applied against the liability in respect of which 
    the levy was made or the sale was conducted.

(b) Surplus proceeds

    Any surplus proceeds remaining after the application of subsection 
(a) shall, upon application and satisfactory proof in support thereof, 
be credited or refunded by the Secretary to the person or persons 
legally entitled thereto.

(Aug. 16, 1954, ch. 736, 68A Stat. 789; Pub. L. 89-719, title I, 
Sec. 104(h), Nov. 2, 1966, 80 Stat. 1137; Pub. L. 94-455, title XIX, 
Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.)

                       References in Text

    Section 6332(c), referred to in subsec. (a), was redesignated 
section 6332(d) by Pub. L. 100-647, title VI, Sec. 6236(e)(1), Nov. 10, 
1988, 102 Stat. 3739.
    The internal revenue law, referred to in subsec. (a)(2), is 
classified generally to this title.


                               Amendments

    1976--Pub. L. 94-455 struck out ``or his delegate'' after 
``Secretary'' wherever appearing.
    1966--Subsec. (a). Pub. L. 89-719 inserted in introductory 
provisions, references to an exception in the case of surrender under 
section 6332(c)(2) and to sale of property redeemed by the United States 
if the interest of the United States in such property was a lien arising 
under the provisions of this title, struck out ``under this subchapter'' 
after ``proceedings'' in par. (1), and inserted ``or the sale was 
conducted'' after ``levy was made'' in par. (3).


                    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 section 6207 of this title.
