
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: 26USC7425]

 
                     TITLE 26--INTERNAL REVENUE CODE
 
                Subtitle F--Procedure and Administration
 
                    CHAPTER 76--JUDICIAL PROCEEDINGS
 
        Subchapter B--Proceedings by Taxpayers and Third Parties
 
Sec. 7425. Discharge of liens


(a) Judicial proceedings

    If the United States is not joined as a party, a judgment in any 
civil action or suit described in subsection (a) of section 2410 of 
title 28 of the United States Code, or a judicial sale pursuant to such 
a judgment, with respect to property on which the United States has or 
claims a lien under the provisions of this title--
        (1) shall be made subject to and without disturbing the lien of 
    the United States, if notice of such lien has been filed in the 
    place provided by law for such filing at the time such action or 
    suit is commenced, or
        (2) shall have the same effect with respect to the discharge or 
    divestment of such lien of the United States as may be provided with 
    respect to such matters by the local law of the place where such 
    property is situated, if no notice of such lien has been filed in 
    the place provided by law for such filing at the time such action or 
    suit is commenced or if the law makes no provision for such filing.

If a judicial sale of property pursuant to a judgment in any civil 
action or suit to which the United States is not a party discharges a 
lien of the United States arising under the provisions of this title, 
the United States may claim, with the same priority as its lien had 
against the property sold, the proceeds (exclusive of costs) of such 
sale at any time before the distribution of such proceeds is ordered.

(b) Other sales

    Notwithstanding subsection (a) sale of property on which the United 
States has or claims a lien, or a title derived from enforcement of a 
lien, under the provisions of this title, made pursuant to an instrument 
creating a lien on such property, pursuant to a confession of judgment 
on the obligation secured by such an instrument, or pursuant to a 
nonjudicial sale under a statutory lien on such property--
        (1) shall, except as otherwise provided, be made subject to and 
    without disturbing such lien or title, if notice of such lien was 
    filed or such title recorded in the place provided by law for such 
    filing or recording more than 30 days before such sale and the 
    United States is not given notice of such sale in the manner 
    prescribed in subsection (c)(1); or
        (2) shall have the same effect with respect to the discharge or 
    divestment of such lien or such title of the United States, as may 
    be provided with respect to such matters by the local law of the 
    place where such property is situated, if--
            (A) notice of such lien or such title was not filed or 
        recorded in the place provided by law for such filing more than 
        30 days before such sale,
            (B) the law makes no provision for such filing, or
            (C) notice of such sale is given in the manner prescribed in 
        subsection (c)(1).

(c) Special rules

                         (1) Notice of sale

        Notice of a sale to which subsection (b) applies shall be given 
    (in accordance with regulations prescribed by the Secretary) in 
    writing, by registered or certified mail or by personal service, not 
    less than 25 days prior to such sale, to the Secretary.

                         (2) Consent to sale

        Notwithstanding the notice requirement of subsection (b)(2)(C), 
    a sale described in subsection (b) of property shall discharge or 
    divest such property of the lien or title of the United States if 
    the United States consents to the sale of such property free of such 
    lien or title.

                    (3) Sale of perishable goods

        Notwithstanding the notice requirement of subsection (b)(2)(C), 
    a sale described in subsection (b) of property liable to perish or 
    become greatly reduced in price or value by keeping, or which cannot 
    be kept without great expense, shall discharge or divest such 
    property of the lien or title of the United States if notice of such 
    sale is given (in accordance with regulations prescribed by the 
    Secretary) in writing, by registered or certified mail or by 
    personal service, to the Secretary before such sale. The proceeds 
    (exclusive of costs) of such sale shall be held as a fund subject to 
    the liens and claims of the United States, in the same manner and 
    with the same priority as such liens and claims had with respect to 
    the property sold, for not less than 30 days after the date of such 
    sale.

               (4) Forfeitures of land sales contracts

        For purposes of subsection (b), a sale of property includes any 
    forfeiture of a land sales contract.

(d) Redemption by United States

                         (1) Right to redeem

        In the case of a sale of real property to which subsection (b) 
    applies to satisfy a lien prior to that of the United States, the 
    Secretary may redeem such property within the period of 120 days 
    from the date of such sale or the period allowable for redemption 
    under local law, whichever is longer.

                        (2) Amount to be paid

        In any case in which the United States redeems real property 
    pursuant to paragraph (1), the amount to be paid for such property 
    shall be the amount prescribed by subsection (d) of section 2410 of 
    title 28 of the United States Code.

                    (3) Certificate of redemption

        (A) In general

            In any case in which real property is redeemed by the United 
        States pursuant to this subsection, the Secretary shall apply to 
        the officer designated by local law, if any, for the documents 
        necessary to evidence the fact of redemption and to record title 
        to such property in the name of the United States. If no such 
        officer is designated by local law or if such officer fails to 
        issue such documents, the Secretary shall execute a certificate 
        of redemption therefor.

        (B) Filing

            The Secretary shall, without delay, cause such documents or 
        certificate to be duly recorded in the proper registry of deeds. 
        If the State in which the real property redeemed by the United 
        States is situated has not by law designated an office in which 
        such certificate may be recorded, the Secretary shall file such 
        certificate in the office of the clerk of the United States 
        district court for the judicial district in which such property 
        is situated.

        (C) Effect

            A certificate of redemption executed by the Secretary shall 
        constitute prima facie evidence of the regularity of such 
        redemption and shall, when recorded, transfer to the United 
        States all the rights, title, and interest in and to such 
        property acquired by the person from whom the United States 
        redeems such property by virtue of the sale of such property.

(Added Pub. L. 89-719, title I, Sec. 109, Nov. 2, 1966, 80 Stat. 1141; 
amended Pub. L. 94-455, title XIX, Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 
Stat. 1834; Pub. L. 99-514, title XV, Sec. 1572(a), Oct. 22, 1986, 100 
Stat. 2765.)


                            Prior Provisions

    A prior section 7425 was renumbered 7434 of this title.


                               Amendments

    1986--Subsec. (c)(4). Pub. L. 99-514 added par. (4).
    1976--Pub. L. 94-455 struck out ``or his delegate'' after 
``Secretary'' wherever appearing.


                    Effective Date of 1986 Amendment

    Section 1572(b) of Pub. L. 99-514 provided that: ``The amendment 
made by subsection (a) [amending this section] shall apply to 
forfeitures after the 30th day after the date of the enactment of this 
Act [Oct. 22, 1986].''


                             Effective Date

    Section 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 an Effective Date of 1966 Amendment note under 
section 6323 of this title.

                  Section Referred to in Other Sections

    This section is referred to in section 7810 of this title; title 28 
section 2409a.
