Internal Revenue Code §6333 - PRODUCTION OF BOOKS

If a levy has been made or is about to be made on any property, or right to property, any person having custody or control of any books or records, containing evidence or statements relating to the property or right to property subject to levy, shall, upon demand of the Secretary, exhibit such books or records to the Secretary.

.01 Amended by P.L. 94-455 (Deadwood Act). For details, see the Code Volumes.

§301.6333-1., Production of books. --If a levy has been made or is about to be made on any property or rights to property, any person, having custody or control of any books or records containing evidence or statements relating to the property or rights to property subject to levy, shall, upon demand of the internal revenue officer who has made or is about to make the levy, exhibit such books or records to such officer. ]

.01 Historical Comment: Proposed 12/11/54. Adopted 12/31/54 by T.D. 6119.

T.D. 6119., 1955-1 CB 145


SECTION 6201.--ASSESSMENT AUTHORITY
26 CFR 301.6201 -1: Assessment authority. (Also Sections 6301, 6402, 6404; 26 CFR 301.6301 -1, 301.6402 -1, 301.6404 -1.)
TITLE 26--INTERNAL REVENUE.--CHAPTER I, SUBCHAPTER F, PART 301

Regulations under chapters 63, 64, and 65 of the Internal Revenue Code of 1954, relating to assessment, collection, abatements, credits, and refunds.

TREASURY DEPARTMENT,
OFFICE OF COMMISSIONER OF INTERNAL REVENUE,
Washington 25, D. C.

To Officers and Employees of the Internal Revenue Service and Others Concerned:

On December 11, 19 54, there was published in the Federal Register (19 F. R. 8457) a notice of proposed rule making regarding regulations under chapter 63, relating to assessment, chapter 64 (except section 6316), relating to collection, and chapter 65, relating to abatements, credits, and refunds, of the Internal Revenue Code of 1954. On December 15, 19 54, a correction notice making four changes in the proposed regulations was published in the Federal Register (19 F. R. 8580). After consideration of all relevant matter presented by interested parties regarding the rules proposed, the following regulations are hereby adopted.

Sec.

$BASSESSMENT

                   IN GENERAL

301.6201
           Statutory provisions; assessment authority.

301.6201
-1         Assessment authority.

                   Statutory provisions; establishment by regulations of mode or time

301.6202
           of assessment.

301.6203
           Statutory provisions; method of assessment.

301.6203
-1         Method of assessment.

301.6204
           Statutory provisions; supplemental assessments.

301.6204
-1         Supplemental assessment.

                   Statutory provisions; special rules applicable to certain employment

301.6205
           taxes.

301.6205
-1         Special rules applicable to certain employment taxes.

301.6206
           Statutory provisions; cross references.

$BDEFICIENCY

PROCEDURES

301.6211
           Statutory provisions; definition of a deficiency.

301.6211
-1         Deficiency defined.

301.6212
           Statutory provisions; notice of deficiency.

301.6212
-1         Notice of deficiency.

                   Statutory provisions; restrictions applicable to deficiencies; petition

301.6213
           to Tax Court.

301.6213
-1         Restrictions applicable to deficiencies; petition to Tax Court.

301.6214
           Statutory provisions; determinations by Tax Court.

301.6215
           Statutory provisions; assessment of deficiency found by Tax Court.

301.6215
-1         Assessment of deficiency found by Tax Court.

301.6216
           Statutory provisions; cross references.

$BCOLLECTION

                   GENERAL PROVISIONS

301.6301
           Statutory provisions; collection authority.

301.6301
-1         Collection authority.

301.6302
           Statutory provisions; mode or time of collection.

                   Use of Federal reserve banks and authorized commercial banks in

                   connection with the payment of certain employment and excise

301.6302
-1         taxes.

301.6303
           Statutory provisions; notice and demand for tax.

301.6303
-1         Notice and demand for tax.

301.6304
           Statutory provisions; collection under the Tariff Act.

                   RECEIPT OF PAYMENT

301.6311
           Statutory provisions; payment by check or money order.

301.6311
-1         Payment by check or money order.

                   Statutory provisions; payment by 

United States

 notes and certificates

301.6312
           of indebtedness.

                   Treasury certificates of indebtedness, Treasury notes, and Treasury

301.6312
-1         bills acceptable in payment of internal revenue taxes or stamps.

                   Certain Treasury savings notes acceptable in payment of certain

301.6312
-2         internal revenue taxes.

301.6313
           Statutory provisions; fractional parts of a cent.

301.6313
-1         Fractional parts of a cent.

301.6314
           Statutory provisions; receipt for taxes.

301.6314
-1         Receipt for taxes.

301.6315
           Statutory provisions; payments of estimated income tax.

301.6315
-1         Payments of estimated income tax.

301.6316
           Statutory provisions; payment by foreign currency.

                   LIEN FOR TAXES

301.6321
           Statutory provisions; lien for taxes.

301.6321
-1         Lien for taxes.

301.6322
           Statutory provisions; period of lien.

                   Statutory provisions; validity against mortgagees, pledgees, purchasers,

301.6323
           and judgment creditors.

                   Validity of lien against mortgagees, pledgees, purchasers, and judgment

301.6323
-1         creditors.

301.6324
           Statutory provisions; special liens for estate and gift taxes.

                   Special liens for estate and gift taxes; personal liability of transferees

301.6324
-1         and others.

301.6325
           Statutory provisions; release of lien or partial discharge of property.

301.6325
-1         Release of lien or partial discharge of property.

301.6326
           Statutory provisions; cross references.

                   SEIZURE OF PROPERTY FOR COLLECTION OF TAXES

301.6331
           Statutory provisions; levy and distraint.

301.6331
-1         Levy and distraint.

301.6332
           Statutory provisions; surrender of property subject to levy.

301.6332
-1         Surrender of property subject to levy.

301.6333
           Statutory provisions; production of books.

301.6333
-1         Production of books.

301.6334
           Statutory provisions; property exempt from levy.

301.6334
-1         Property exempt from levy.

301.6335
           Statutory provisions; sale of seized property.

301.6335
-1         

Sale

 of seized property.

301.6336
           Statutory provisions; sale of perishable goods.

301.6336
-1         

Sale

 of perishable goods.

301.6337
           Statutory provisions; redemption of property.

301.6337
-1         Redemption of property.

301.6338
           Statutory provisions; certificate of sale; deed of real property.

301.6338
-1         Certificate of sale; deed of real property.

                   Statutory provisions; legal effect of certificate of sale of personal

301.6339
           property and deed of real property.

                   Legal effect of certificate of sale of personal property and deed of

301.6339
-1         real property.

301.6340
           Statutory provisions; records of sale.

301.6340
-1         Records of sale.

301.6341
           Statutory provisions; expense of levy and sale.

301.6341
-1         Expense of levy and sale.

301.6342
           Statutory provisions; application of proceeds of levy.

301.6342
-1         Application of proceeds of levy.

301.6343
           Statutory provisions; authority to release levy.

301.6343
-1         Authority to release levy.

301.6344
           Statutory provisions; cross references.

$

BAbatements,

Credits and

Refunds

                   PROCEDURE IN GENERAL

301.6401
           Statutory provisions; amounts treated as overpayments.

301.6401
-1         Amounts treated as overpayments.

301.6402
           Statutory provisions; authority to make credits or refunds.

301.6402
-1         Authority to make credits or refunds.

301.6402
-2         Claims for credit or refund.

301.6402
-3         Special rules applicable to income tax.

301.6402
-4         Payments in excess of amounts shown on return.

301.6402
-5         Claim for payment of judgment obtained against district director.

                   Claim for payment of judgment obtained in 

United States

 district

301.6402
-6         court against the 

United States

.

                   Claim for payment of judgment obtained in the Court of Claims

301.6402
-7         against the 

United States

.

301.6403
           Statutory provisions; overpayment of installment.

301.6403
-1         Overpayment of installment.

301.6404
           Statutory provisions; abatements.

301.6404
-1         Abatements.

301.6405
           Statutory provisions; reports of refunds and credits.

301.6405
-1         Reports of refunds and credits.

301.6406
           Statutory provisions; prohibition of administrative review of decisions.

301.6407
           Statutory provisions; date of allowance of refund or credit.

301.6407
-1         Date of allowance of refund or credit.

                   RULES OF SPECIAL APPLICATION

301.6411
           Statutory provisions; tentative carryback adjustments.

301.6411
-1         Tentative carryback adjustments.

301.6412
           Statutory provisions; floor stock refunds.

301.6412
-1         Floor stocks refunds.

                   Statutory provisions; special rules applicable to certain employment

301.6413
           taxes.

301.6413
-1         Special rules applicable to certain employment taxes.

301.6414
           Statutory provisions; income tax withheld.

301.6414
-1         Income tax withheld.

                   Statutory provisions; credits or refunds to persons who collected certain

301.6415
           taxes.

301.6415
-1         Credits or refunds to persons who collected certain taxes.

301.6416
           Statutory provisions; certain taxes on sales and services.

301.6416
-1         Certain taxes on sales and services.

301.6417
           Statutory provisions; coconut and palm oil.

301.6417
-1         Coconut and palm oil.

301.6418
           Statutory provisions; sugar.

301.6418
-1         Sugar.

301.6419
           Statutory provisions; excise tax on wagering.

301.6419
-1         Excise tax on wagering.

301.6420
           Statutory provisions; cross references.

                   EFFECTIVE DATE 
AND
 RELATED PROVISIONS

301.7851
           Statutory provisions; applicability of revenue laws.

AUTHORITY: §§ 301.6201 to 301.7851 issued under sec. 7805, 68A Stat. 917; 26 U. S. C. 7805.

ASSESSMENT

IN GENERAL

SEC . 301.6201 . STATUTORY PROVISIONS; ASSESSMENT AUTHORITY.

SEC . 6201. ASSESSMENT AUTHORITY.

(a) Authority of Secretary or delegate. The Secretary or his delegate is authorized and required to make the inquiries, determinations, and assessments of all taxes (including interest, additional amounts, additions to the tax, and assessable penalties) imposed by this title, or accruing under any former internal revenue law, which have not been duly paid by stamp at the time and in the manner provided by law. Such authority shall extend to and include the following:

(1) Taxes shown on return.--The Secretary or his delegate shall assess all taxes determined by the taxpayer or by the Secretary or his delegate as to which returns or lists are made under this title.

(2) Unpaid taxes payable by stamp.

(A) Omitted stamps.--Whenever any article upon which a tax is required to be paid by means of a stamp is sold or removed for sale or use by the manufacturer thereof or whenever any transaction or act upon which a tax is required to be paid by means of a stamp occurs without the use of the proper stamp, it shall be the duty of the Secretary or his delegate, upon such information as he can obtain, to estimate the amount of tax which has been omitted to be paid and to make assessment therefor upon the person or persons the Secretary or his delegate determines to be liable for such tax.

(B) Check or money order not duly paid.--In any case in which a check or money order received under authority of section 6311 as payment for stamps is not duly paid, the unpaid amount may be immediately assessed as if it were a tax imposed by this title, due at the time of such receipt, from the person who tendered such check or money order.

(3) Erroneous income tax prepayment credits.--If on any return or claim for refund of income taxes under subtitle A there is an overstatement of the credit for income tax withheld at the source, or of the amount paid as estimated income tax, the amount so overstated which is allowed against the tax shown on the return or which is allowed as a credit or refund may be assessed by the Secretary or his delegate in the same manner as in the case of a mathematical error appearing upon the return.

(b) Estimated income tax.--No unpaid amount of estimated tax under section 6153 or 6154 shall be assessed.

(c) Compensation of child.--Any income tax under chapter 1 assessed against a child, to the extent attributable to amounts includible in the gross income of the child, and not of the parent, solely by reason of section 73(a), shall, if not paid by the child, for all purposes be considered as having also been properly assessed against the parent.

(d) Deficiency proceedings.--For special rules applicable to deficiencies of income, estate, and gift taxes, see subchapter B.

SEC . 301.6201 -1. ASSESSMENT AUTHORITY--(a) In general.--The District Director is authorized and required to make all inquiries necessary to the determinations and assessments of all taxes imposed by the Internal Revenue Code of 1954 or any prior internal revenue law. He is further authorized and required to make the determinations and the assessments of such taxes. However, certain inquiries and determinations are, by direction of the Commissioner, made by other officials, such as Assistant Regional Commissioners. The term "taxes" includes interest, additional amounts, additions to the taxes, and assessable penalties. The authority of the District Director to make assessments includes the following:

(1) Taxes shown on return.--The District Director shall assess all taxes determined by the taxpayer or by the District Director and disclosed on a return or list.

(2) Unpaid taxes payable by stamp. (i) If without the use of the proper stamp:

(a) Any article upon which a tax is required to be paid by means of a stamp is sold or removed for sale or use by the manufacturer thereof, or

(b) Any transaction or act upon which a tax is required to be paid by means of a stamp occurs:

the District Director, upon such information as he can obtain, must estimate the amount of the tax which has not been paid and must make assessment therefor upon the person the District Director determines to be liable for the tax. However, the District Director may not assess any tax which is payable by stamp unless the taxpayer fails to pay such tax at the time and in the manner provided by law or regulations.

(ii) If a taxpayer gives a check or money order as payment for stamps but the check or money order is not paid upon presentment, then the District Director shall assess the amount of the check or money order against the taxpayer as if it were a tax due at the time the check or money order was received by the District Director.

(3) Erroneous income tax prepayment credits.--If the amount of income tax withheld or the amount of estimated income tax paid is overstated by a taxpayer on a return or on a claim for refund, the amount so overstated which is allowed against the tax shown on the return or which is allowed as a credit or refund shall be assessed by the District Director in the same manner as in the case of a mathematical error on the return. See section 6213(b)(1), relating to exceptions to restrictions on assessment.

(b) Estimated income tax.--The District Director shall not assess any amount of estimated income tax required to be paid under section 6153 or 6154 which is unpaid.

(c) Compensation of child.--Any income tax assessed against a child, to the extent of the amount attributable to income included in the gross income of the child solely by reason of section 73(a) or the corresponding provision of prior law, if not paid by the child, shall, for the purposes of the income tax imposed by chapter 1 (or the corresponding provisions of prior law), be considered as having also been properly assessed against the parent. In any case in which the earnings of the child are included in the gross income of the child solely by reason of section 73(a) or the corresponding provision of prior law, the parent's liability is an amount equal to the amount by which the tax assessed against the child (and not paid by him) has been increased by reason of the inclusion of such earnings in the gross income of the child. Thus, if for the calendar year 1954 the child has income of $1,000 from investments and of $3,000 for services rendered, and the latter amount is includible in the gross income of the child under section 73(a) and the child has no wife or dependents, the tax liability determined under section 3 is $625. If the child had only the investment income of $1,000, his tax liability would be $62. If the tax of $625 is assessed against the child, the difference between $625 and $62, or $563, is the amount of such tax which is considered to have been properly assessed against the parent, if not paid by the child.

SEC . 301.6202 . STATUTORY PROVISIONS; ESTABLISHMENT BY REGULATIONS OF MODE OR TIME OF ASSESSMENT.

SEC . 6202. ESTABLISHMENT BY REGULATIONS OF MODE OR TIME OF ASSESSMENT.

If the mode or time for the assessment of any internal revenue tax (including interest, additional amounts, additions to the tax, and assessable penalties) is not otherwise provided for, the Secretary or his delegate may establish the same by regulations.

SEC . 301.6203 . STATUTORY PROVISIONS; METHOD OF ASSESSMENT.

SEC . 6203. METHOD OF ASSESMENT.

The assessment shall be made by recording the liability of the taxpayer in the office of the Secretary or his delegate in accordance with rules or regulations prescribed by the Secretary or his delegate. Upon request of the taxpayer, the Secretary or his delegate shall furnish the taxpayer a copy of the record of the assessment.

SEC . 301.6203 -1. METHOD OF ASSESSMENT.

The District Director shall appoint one or more assessment officers, and the assessment shall be made by an assessment officer signing the summary record of assessment. The summary record, through supporting records, shall provide identification of the taxpayer, the character of the liability assessed, the taxable period if applicable, and the amount of the assessment. The amount of the assessment shall in the case of tax shown on a return by the taxpayer, be the amount so shown, and in all other cases the amount of the assessment shall be the amount shown on the supporting list or record. The date of the assessment is the date the summary record is signed by an assessment officer. If the taxpayer requests a copy of the record of assessment, the District Director shall furnish the taxpayer a copy of the pertinent parts of the assessment which set forth the name of the taxpayer, the date of assessment, the character of the liability assessed, the taxable period, if applicable, and the amounts assessed.

SEC . 301.6204 . STATUTORY PROVISION; SUPPLEMENTAL ASSESSMENTS.

SEC . 6204. SUPPLEMENTAL ASSESSMENT.

(a) General rule.--The Secretary or his delegate may, at any time within the period prescribed for assessment, make a supplemental assessment whenever it is ascertained that any assessment is imperfect or incomplete in any material respect.

(b) Restrictions on assessment.--For restrictions on assessment of deficiencies in income, estate, and gift taxes, see section 6213.

SEC . 301.6204 -1. SUPPLEMENTAL ASSESSMENT.--If any assessment is incomplete or incorrect in any material respect, the District Director, subject to the restrictions with respect to the assessment of deficiencies in income, estate, and gift taxes, and subject to the applicable period of limitations, may make a supplemental assessment for the purpose of correcting or completing the original assessment.

SEC . 301.6205 . STATUTORY PROVISIONS; SPECIAL RULES APPLICABLE TO CERTAIN EMPLOYMENT TAXES.

SEC . 6205. SPECIAL RULES APPLICABLE TO CERTAIN EMPLOYMENT TAXES.

(a) Adjustment of tax.

(1) General rule.--If less than the correct amount of tax imposed by section 3101, 3111, 3201, 3221, or 3402 is paid with respect to any payment of wages or compensation, proper adjustments, with respect to both the tax and the amount to be deducted, shall be made, without interest, in such manner and at such times as the Secretary or his delegate may by regulations prescribe.

(2) United States as employer.--For purposes of this subsection, in the case of remuneration received from the United States or a wholly owned instrumentality thereof during any calendar year, each head of a Federal agency or instrumentality who makes a return pursuant to section 3122 and each agent, designated by the head of a Federal agency or instrumentality, who makes a return pursuant to such section shall be deemed a separate employer.

(b) Underpayments.--If less than the correct amount of tax imposed by section 3101, 3111, 3201, 3221, or 3402 is paid or deducted with respect to any payment of wages or compensation and the underpayment cannot be adjusted under subsection (a) of this section, the amount of the underpayment shall be assessed and collected in such manner and at such times (subject to the statute of limitations properly applicable thereto) as the Secretary or his delegate may by regulations prescribe.

SEC . 301.6205 -1. SPECIAL RULES APPLICABLE TO CERTAIN EMPLOYMENT TAXES. For regulations under this section, see the Employment Tax Regulations (Pt. 31 of this chapter).

SEC . 301.6206 . STATUTORY PROVISIONS; CROSS REFERENCES.

SEC . 6206. CROSS REFERENCES.

(1) For prohibition of suits to restrain assessment of any tax, see section 7421.

(2) For prohibition of assessment of taxes against insolvent banks, see section 7507.

(3) For assessment where property subject to tax has been sold in a distraint proceeding without the tax having been assessed prior to such sale, see section 6342.

(4) For assessment in case of sale or removal of tobacco, snuff, cigars, and cigarettes without the use of proper stamps, see section 5703(d).

(5) For assessment in case of distilled spirits removed from place where disstilled and not deposited in bonded warehouse, see section 5006(c).

(6) For assessment in case of certain spirits subject to excessive leakage, see section 5006(b).

(7) For assessment of deficiencies in production of distilled spirits, see section 5007(e)(1).

(8) For period of limitation upon assessment, see chapter 66.

(9) For assessment under the provisions of the Tariff Act of 1930 of the taxes imposed by section 4501(b), and subchapters A, B, C, D, and E of chapter 38, see sections 4504 and 4601, respectively.

DEFICIENCY PROCEDURES

SEC . 301.6211 . STATUTORY PROVISIONS; DEFINITION OF A DEFICIENCY.

SEC . 6211. DEFINITION OF A DEFICIENCY.

(a) In general. For purposes of this title in the case of income, estate, and gift taxes, imposed by subtitles A and B, the term "deficiency" means the amount by which the tax imposed by subtitles A or B exceeds the excess of:

(1) The sum of:

(A) The amount shown as the tax by the taxpayer upon his return, if a return was made by the taxpayer and an amount was shown as the tax by the taxpayer thereon, plus

(B) The amounts previously assessed (or collected without assessment) as a deficiency, over:

(2) the amount of rebates, as defined in subsection (b)(2), made.

(b) Rules for application of subsection (a). For purposes of this section:

(1) The tax imposed by chapter 1 and the tax shown on the return shall both be determined without regard to payments on account of estimated tax, without regard to the credit under section 31, and without regard to so much of the credit under section 32 as exceeds 2 percent of the interest on obligations described in section 1451.

(2) The term "rebate" means so much of an abatement, credit, refund, or other repayment, as was made on the ground that the tax imposed by subtitles A or B was less than the excess of the amount specified in subsection (a)(1) over the rebates previously made.

(3) The computation by the Secretary or his delegate, pursuant to section 6014, of the tax imposed by chapter 1 shall be considered as having been made by the taxpayer and the tax so computed considered as shown by the taxpayer upon his return.

SEC . 301.6211 -1 DEFICIENCY DEFINED.--(a) In the case of the income tax imposed by subtitle A, the estate tax imposed by chapter 11, or the gift tax imposed by chapter 12, the term "deficiency" means the excess of the tax (income, estate, or gift tax, as the case may be) over the sum of the amount shown as such tax by the taxpayer upon his return and the amounts previously assessed (or collected without assessment) as a deficiency; but such sum shall first be reduced by the amount of rebates made. If no return is made, or if the return (except a return of income tax on Form 1040A pursuant to section 6014) does not show any tax, for the purpose of the definition "the amount shown as the tax by the taxpayer upon his return" shall be considered as zero. Accordingly, in any such case, if no deficiencies with respect to the tax have been assessed, or collected without assessment, and no rebates with respect to the tax have been made, the deficiency is the amount of the tax imposed by subtitle A, chapter 11, or chapter 12. Additional tax shown on an "amended return," so-called, filed after the due date of the return, is a deficiency within the meaning of the Internal Revenue Code.

(b) For purposes of the definition, the income tax imposed by subtitle A and the income tax shown on the return shall both be determined without regard to the credit provided in section 31 for income tax withheld at the source and without regard to so much of the credit provided in section 32 for income taxes withheld at the source as exceeds 2 percent of the interest on tax-free covenant bonds described in section 1451. Payments on account of estimated income tax, like other payments of tax by the taxpayer, shall likewise be disregarded in the determination of a deficiency.

(c) The computation by the District Director, pursuant to section 6014(a), of the income tax imposed by subtitle A shall be considered as having been made by the taxpayer and the tax so computed shall be considered as the tax shown by the taxpayer upon his return.

(d) If so much of the credit claimed on the return for income taxes withheld at the source as exceeds 2 percent of the interest on tax-free covenant bonds is greater than the amount of such credit allowable, the unpaid portion of the tax attributable to such difference will be collected not as a deficiency but as an underpayment of the tax shown on the return.

(e) This section may be illustrated by the following examples:

Example (1). The amount of income tax shown by the taxpayer upon his return for the calendar year 1954 was $1,600. The taxpayer had no amounts previously assessed (or collected without assessment) as a deficiency. He claimed a credit in the amount of $2,050 for tax withheld at source on wages under section 3402 and a refund of $450 (not a rebate under sec. 6211) was made to him as an overpayment of tax for the taxable year. It is later determined that the correct tax for the taxable year is $1,850.

A deficiency of $250 is determined as follows:

Tax imposed by subtitle A ---                                                              $1,850

Tax shown on return ---                                                     $1,600

Tax previously assessed (or collected without assessment) as a

deficiency ---                                                                None

Total ---                                                                    1,600

Amount of rebates made ---                                                    None

Balance ---                                                                                 1,600

Deficiency ---                                                                                250

Example (2). The taxpayer made a return for the calendar year 1954 showing a tax of $1,250 before any credits for tax withheld at the source. He claimed a credit in the amount of $800 for tax withheld at source on wages under section 3402 and $60 for tax paid at source under section 1451 upon interest on bonds containing a tax-free covenant. The taxpayer had no amounts previously assessed (or collected without assessment) as a deficiency. The District Director determines that the 2 percent tax paid at the source on tax-free covenant bonds is $40 instead of $60 as claimed by the taxpayer and that the tax imposed by subtitle A is $1,360 (total tax $1,400 less $40 paid at source on tax-free covenant bonds). A deficiency in the amount of $170 is determined as follows:

Tax imposed by subtitle A ($1,400 minus $40) ---                                           $1,360

Tax shown on return ($1,250 minus $60) ---                                  $1,190

Tax previously assessed (or collected without assessment) as a

deficiency ---                                                                None

Total ---                                                                    1,190

Amount of rebates made ---                                                    None

Balance ---                                                                                 1,190

Deficiency ---                                                                                170

(f) As used in section 6211, the term "rebate" means so much of an abatement, credit, refund, or other repayment as is made on the ground that the tax imposed by subtitle A or B is less than the excess of (1) the amount shown as the tax by the taxpayer upon his return increased by the amount previously assessed (or collected without assessment) as a deficiency over (2) the amount of rebates previously made. For example, assume that the amount of income tax shown by the taxpayer upon his return for the taxable year is $600 and the amount claimed as a credit under section 31 for income tax withheld at the source is $900. If the District Director determines that the tax imposed by subtitle A is $600 and makes a refund of $300, no part of such refund constitutes a "rebate" since the refund is not made on the ground that the tax imposed by subtitle A is less than the tax shown on the return. If, however, the District Director determines that the tax imposed by subtitle A is $500 and refunds $400, the amount of $100 of such refund would contsitute a rebate since it is made on the ground that the tax imposed by subtitle A ($500) is less than the tax shown on the return ($600). The amount of such rebate ($100) would be taken into account in arriving at the amount of any deficiency subsequently determined.

SEC . 301.6212 . STATUTORY PROVISIONS; NOTICE OF DEFICIENCY.

SEC . 6212. NOTICE OF DEFICIENCY.

(a) In general.--If the Secretary or his delegate determines that there is a deficiency in respect of any tax imposed by subtitles A or B, he is authorized to send notice of such deficiency to the taxpayer by registered mail.

(b) Address for notice of deficiency.

(1) Income and gift taxes.--In the absence of notice to the Secretary or his delegate under section 6903 of the existence of a fiduciary relationship, notice of a deficiency in respect of a tax imposed by chapter 1 or 12, if mailed to the taxpayer at his last known address, shall be sufficient for purposes of such chapter and this chapter even if such taxpayer is deceased, or is under a legal disability, or, in the case of a corporation, has terminated its existence.

(2) Joint income tax return. In the case of a joint income tax return filed by husband and wife, such notice of deficiency may be a single joint notice, except that if the Secretary or his delegate has been notified by either spouse that separate residences have been established, then, in lieu of the single joint notice, a duplicate original of the joint notice shall be sent by registered mail to each spouse at his last known address.

(3) Estate tax.--In the absence of notice to the Secretary or his delegate under section 6903 of the existence of a fiduciary relationship, notice of a deficiency in respect of a tax imposed by chapter 11, if addressed in the name of the decedent or other person subject to liability and mailed to his last known address, shall be sufficient for purposes of chapter 11 and of this chapter.

(c) Further deficiency letters restricted.

(1) General rule.--If the Secretary or his delegate has mailed to the taxpayer a notice of deficiency as provided in subsection (a), and the taxpayer files a petition with the Tax Court within the time prescribed in section 6213(a), the Secretary or his delegate shall have no right to determine any additional deficiency of income tax for the same taxable year, of gift tax for the same calendar year, or of estate tax in respect of the taxable estate of the same decedent, except in the case of fraud, and except as provided in section 6214(a) (relating to assertion of greater deficiencies before the Tax Court), in section 6213(b)(1) (relating to mathematical errors), or in section 6861(c) (relating to the making of jeopardy assessments).

(2) Cross references.--For assessment as a deficiency notwithstanding the prohibition of further deficiency letters, in the case of:

(A) Deficiency attributable to change of election to take standard deduction where taxpayer and his spouse made separate returns, see section 144(b).

(B) Deficiency attributable to gain on involuntary conversion, see section 1033(a)(3)(C) and (D).

(C) Deficiency attributable to gain on sale or exchange of personal residence, see section 1034(j).

(D) Deficiency attributable to war loss recoveries where prior benefit rule is elected, see section 1335.

SEC . 301.6212 -1. NOTICE OF DEFICIENCY--(a) General rule.--If a District Director (or an Assistant Regional Commissioner, Appellate) determines that there is a deficiency in respect of income, estate, or gift tax imposed by subtitle A or B, he is authorized to notify the taxpayer of the deficiency by registered mail.

(b) Address for notice of deficiency--(1) Income and gift taxes.--Unless the District Director for the district in which the return in question was filed has been notified under the provisions of section 6903 as to the existence of a fiduciary relationship, notice of a deficiency in respect of income tax or of gift tax shall be sufficient if mailed to the taxpayer at his last known address, even though such taxpayer is deceased, or is under a legal disability, or, in the case of a corporation, has terminated its existence.

(2) Joint income tax returns.--If a joint income tax return has been filed by husband and wife, the District Director (or Assistant Regional Commissioner, Appellate) may, unless the District Director for the district in which such joint return was filed has been notified by either spouse that a separate residence has been established, send either a joint or separate notice of deficiency to the taxpayers at their last known address. If, however, the proper district Director has been so notified, a separate notice of deficiency, that is, a duplicate original of the joint notice, must be sent by registered mail to each spouse at his or her last known address. The notice of separate residences should be addressed to the District Director for the district in which the joint return was filed.

(3) Estate tax.--In the absence of notice, under the provisions of section 6903 as to the existence of a fiduciary relationship, to the District Director for the district in which the estate tax return was filed, notice of a deficiency in respect of the estate tax imposed by chapter 11 of subtitle B shall be sufficient if addressed in the name of the decedent or other person subject to liability and mailed to his last known address.

(c) Further deficiency letters restricted.--If the District Director (or Assistant Regional Commissioner, Appellate) mails to the taxpayer notice of a deficiency, and the taxpayer files a petition with the Tax Court within the prescribed period, no additional deficiency may be determined with respect to income tax for the same taxable year, gift tax for the same calendar year, or estate tax with respect to the taxable estate of the same decedent. This restriction shall not apply in the case of fraud, assertion of greater deficiencies before the Tax Court as provided in section 6214(a), mathematical errors as provided in section 6213(b)(1), or jeopardy assessments as provided in section 6861(c).

SEC . 301.6213 . STATUTORY PROVISIONS; RESTRICTIONS APPLICABLE TO DEFICIENCIES; PETITION TO TAX COURT.

SEC . 6213. RESTRICTIONS APPLICABLE TO DEFICIENCIES; PETITION TO TAX COURT.

(a) Time for filing petition and restriction on assessment. Within 90 days, or 150 days if the notice is addressed to a person outside the States of the Union and the District of Columbia, after the notice of deficiency authorized in section 6212 is mailed (not counting Saturday, Sunday, or a legal holiday in the District of Columbia as the last day), the taxpayer may file a petition with the Tax Court for a redetermination of the deficiency. Except as otherwise provided in section 6861 no assessment of a deficiency in respect of any tax imposed by subtitle A or B and no levy or proceeding in court for its collection shall be made, begun, or prosecuted until such notice has been mailed to the taxpayer, nor until the expiration of such 90-day or 150-day period, as the case may be, nor, if a petition has been filed with the Tax Court, until the decision of the Tax Court has become final. Notwithstanding the provisions of section 7421(a), the making of such assessment or the beginning of such proceeding or levy during the time such prohibition is in force may be enjoined by a proceeding in the proper court.

(b) Exceptions to restrictions on assessment.

(1) Mathematical errors.--If the taxpayer is notified that, on account of a mathematical error appearing upon the return, an amount of tax in excess of that shown upon the return is due, and that an assessment of the tax has been or will be made on the basis of what would have been the correct amount of tax but for the mathematical error, such notice shall not be considered as a notice of deficiency for the purposes of subsection (a) (prohibiting assessment and collection until notice of the deficiency has been mailed), or of section 6212(c)(1) (restricting further deficiency letters), or section 6512(a) (prohibiting credits or refunds after petition to the Tax Court), and the taxpayer shall have no right to file a petition with the Tax Court based on such notice, nor shall such assessment or collection be prohibited by the provisions of subsection (a) of this section.

(2) Assessments arising out of tentative carryback adjustments.--If the Secretary or his delegate determines that the amount applied, credited, or refunded under section 6411 is in excess of the overassessment attributable to the carryback with respect to which such amount was applied, credited, or refunded, he may assess the amount of the excess as a deficiency as if it were due to a mathematical error appearing on the return.

(3) Assessment of amount paid.--Any amount paid as a tax or in respect of a tax may be assessed upon the receipt of such payment notwithstanding the provisions of subsection (a). In any case where such amount is paid after the mailing of a notice of deficiency under section 6212, such payment shall not deprive the Tax Court of jurisdiction over such deficiency determined under section 6211 without regard to such assessment.

(c) Failure to file petition.--If the taxpayer does not file a petition with the Tax Court within the time prescribed in subsection (a), the deficiency, notice of which has been mailed to the taxpayer, shall be assessed, and shall be paid upon notice and demand from the Secretary or his delegate.

(d) Waiver of restrictions.--The taxpayer shall at any time (whether or not a notice of deficiency has been issued) have the right, by a signed notice in writing filed with the Secretary or his delegate, to waive the restrictions provided in subsection (a) on the assessment and collection of the whole or any part of the deficiency.

(e) Cross references.--(1) For assessment as if a mathematical error on the return, in the case of erroneous claims for income tax prepayment credits, see section 6201(a)(3).

(2) For assessments without regard to restrictions imposed by this section in the case of--

(A) Recovery of foreign income taxes, see section 905(c).

(B) Recovery of foreign estate tax, see section 2016.

SEC . 301.6213 -1. RESTRICTIONS APPLICABLE TO DEFICIENCIES; PETITION TO TAX COURT--(a) Time for filing petition and restrictions on assessment--(1) Time for filing petition.--Within 90 days after notice of the deficiency is mailed (or within 150 days after mailing in the case of such notice addressed to a person outside the States of the Union and the District of Columbia), as provided in section 6212, a petition may be filed with the Tax Court of the United States for a redetermination of the deficiency. In determining such 90-day or 150-day period, Saturday, Sunday, or a legal holiday in the District of Columbia is not counted as the 90th or 150th day. The term "States of the Union" referred to in this paragraph does not include the Territories of Alaska and Hawaii.

(2) Restrictions on assessment.--Except as otherwise provided by this section, by section 6861(a) (relating to jeopardy assessments of income, estate, and gift taxes), by section 6871(a) (relating to immediate assessment of claims for income, estate, and gift taxes in bankruptcy and receivership cases), or by section 7485 (in case taxpayer petitions for a review of a Tax Court decision without filing bond), no assessment of a deficiency in respect of a tax imposed by subtitle A or B and no levy or proceeding in court for its collection shall be made until notice of deficiency has been mailed to the taxpayer, nor until the expiration of the 90-day or 150-day period within which a petition may be filed with the Tax Court, nor, if a petition has been filed with the Tax Court, until the decision of the Tax Court has become final. As to the date on which a decision of the Tax Court becomes final, see section 7481. Notwithstanding the provisions of section 7421(a), the making of an assessment or the beginning of a proceeding or levy which is forbidden by this paragraph may be enjoined by a proceeding in the proper court.

(b) Exceptions to restrictions on assessment of deficiencies--(1) Mathematical errors.--If a taxpayer is notified of an additional amount of tax due on account of a mathematical error appearing upon the return, such notice is not deemed a notice of deficiency, and the taxpayer has no right to file a petition with the Tax Court upon the basis of such notice, nor is the assessment of such additional amount prohibited by section 6213(a).

(2) Tentative carryback adjustments.--(i) If the District Director determines that any amount applied, credited, or refunded under section 6411(b) with respect to an application for a tenative carryback adjustment is in excess of the overassessment properly attributable to the carryback upon which such application was based, he may assess the amount of the excess as a deficiency as if such deficiency were due to a mathematical error appearing on the return. That is, the District Director may assess an amount equal to the excess, and such amount may be collected, without regard to the restrictions on assessment and collection imposed by section 6213(a). Thus, the District Director, for example, may assess such amount without regard to whether he has mailed the taxpayer a prior notice of deficiency. Either before or after assessing such an amount, the District Director will notify the taxpayer that he has made, or will make, such assessment. Such notice will not constitute a notice of deficiency, and the taxpayer may not file a petition with the Tax Court of the United States based on such notice. However, the taxpayer within the applicable period of limitation may file a regular claim for credit or refund based on the carryback, if he has not already filed such a claim, and may maintain a suit based on such claim if it is disallowed or if it is not acted upon by the Internal Revenue Service within 6 months from the date the claim was filed.

(ii) The method provided in subdivision (i) of this paragraph to recover any amount applied, credited, or refunded in respect of an application for a tentative carryback adjustment which the District Director later determines should not have been so applied, credited, or refunded is not an exclusive method. Two other methods are available to recover such amount: (a) By way of a deficiency notice under section 6212; or (b) by a suit to recover an erroneous refund under section 7405. The District Director, in his discretion, may proceed by way of any one or more of the three available methods to recover any amount which he determines was improperly applied, credited, or refunded in respect of an application for a tentative carryback adjustment.

(3) Assessment of amount paid.--Any payment made after the mailing of a notice of deficiency which is made by the taxpayer as a payment with respect to the proposed deficiency may be assessed without regard to the restrictions on assessment and collection imposed by section 6213(a) even though the taxpayer has not filed a waiver of restrictions on assessment as provided in section 6213(d). A payment of all or part of the deficiency asserted in the notice together with the assessment of the amount so paid will not affect the jurisdiction of the Tax Court. If any payment is made before the mailing of a notice of deficiency, the District Director is not prohibited by section 6213(a) from assessing such amount, and the District Director may assess such amount if he deems such action to be proper. If the District Director assesses such amount, the assessment is taken into account in determining whether or not there is a deficiency for which a notice of deficiency must be issued. Thus, if such a payment satisfies the taxpayer's tax liability, no notice of deficiency will be mailed and the Tax Court will have no jurisdiction over the matter. In any case in which there is a controversy as to the correct amount of the tax liability, the assessment of any amount pursuant to the provisions of section 6213(b)(3) shall in no way be considered to be the acceptance of an offer by the taxpayer to settle such controversy.

(4) Jeopardy.--If the District Director believes that the assessment or collection of a deficiency will be jeopardized by delay, such deficiency shall be assessed immediately, as provided in section 6861(a).

(c) Failure to file petition.--If no petition is filed with the Tax Court within the period prescribed in section 6213(a), the District Director shall assess the amount determined as the deficiency and of which the taxpayer was notified by registered mail and the taxpayer shall pay the same upon notice and demand therefor. In such case the District Director will not be precluded from determining a further deficiency and notifying the taxpayer thereof by registered mail. If a petition is filed with the Tax Court the taxpayer should notify the District Director who issued the notice of deficiency that the petition has been filed in order to prevent an assessment of the amount determined to be the deficiency.

(d) Waiver of restrictions.--The taxpayer may at any time by a signed notice in writing filed with the District Director waive the restrictions on the assessment and collection of the whole or any part of the deficiency. The notice must in all cases be filed with the District Director or other authorized official under whose jurisdiction the audit or other consideration of the return in question is being conducted. The filing of such notice with the Tax Court does not constitute filing with the District Director within the meaning of the International Revenue Code. After such waiver has been acted upon by the District Director and the assessment has been made in accordance with its terms, the waiver cannot be withdrawn.

SEC . 301.6214 . STATUTORY PROVISIONS; DETERMINATIONS BY TAX COURT.

SEC . 6214. DETERMINATIONS BY TAX COURT.

(a) Jurisdiction as to increase of deficiency, additional amounts, or additions to the tax.--The Tax Court shall have jurisdiction to redetermine the correct amount of the deficiency even if the amount so redetermined is greater than the amount of the deficiency, notice of which has been mailed to the taxpayer, and to determine whether any additional amount, or addition to the tax should be assessed, if claim therefor is asserted by the Secretary or his delegate at or before the hearing or a rehearing.

(b) Jurisdiction over other years.--The Tax Court in redetermining a deficiency of income tax for any taxable year or of gift tax for any calendar year shall consider such facts with relation to the taxes for other years as may be necessary correctly to redetermine the amount of such deficiency, but in so doing shall have no jurisdiction to determine whether or not the tax for any other years has been overpaid or underpaid.

(c) Final decisions of Tax Court.--For purposes of this chapter and subtitles A or B the date on which a decision of the Tax Court becomes final shall be determined according to the provisions of section 7481.

SEC . 301.6215 . STATUTORY PROVISIONS; ASSESSMENT OF DEFICIENCY FOUND BY TAX COURT.

SEC . 6215. ASSESSMENT OF DEFICIENCY FOUND BY TAX COURT.

(a) General rule.--If the taxpayer files a petition with the Tax Court, the entire amount redetermined as the deficiency by the decision of the tax Court which has become final shall be assessed and shall be paid upon notice and demand from the Secretary or his delegate. No part of the amount determined as a deficiency by the Secretary or his delegate but disallowed as such by the decision of the Tax Court which has become final shall be assessed or be collected by levy or by proceeding in court with or without assessment.

(b) Cross references.--(1) For assessment or collection of the amount of the deficiency determined by the Tax Court pending appellate court review, see section 7485.

(2) For dismissal of petition by Tax Court as affirmation of deficiency as determined by the Secretary or his delegate, see section 7459(d).

(3) For decision of Tax Court that tax is barred by limitation as its decision that there is no deficiency, see section 7459(e).

(4) For assessment of damages awarded by Tax Court for instituting proceedings merely for delay, see section 6673.

(5) For treatment of certain deficiencies as having been paid, in connection with sale of surplus war-built vessels, see section 9(b)(8) of the Merchant Ship Sales Act of 1946 (60 Stat. 48; 50 U. S. C. App. 1742).

(6) For rules applicable to Tax Court proceedings, see generally subchapter C of chapter 76.

(7) For proration of deficiency to installments, see section 6152(c).

(8) For extension of time for paying amount determined as deficiency, see section 6161(b).

SEC . 301.6215 -1. ASSESSMENT OF DEFICIENCY FOUND BY TAX COURT.--Where a petition has been filed with the Tax Court, the entire amount redetermined as the deficiency by the decision of the Tax Court which has become final shall be assessed by the District Director and the unpaid portion of the amount so assessed shall be paid by the taxpayer upon notice and demand therefor.

SEC . 301.6216 . STATUTORY PROVISIONS; CROSS REFERENCES.

SEC . 6216. CROSS REFERENCES.

(1) For procedures relating to bankruptcy and receivership, see subchapter B of chapter 70.

(2) For procedures relating to jeopardy assessments, see subchapter A of chapter 70.

(3) For procedures relating to claims against transferees and fiduciaries, see chapter 71.

COLLECTION

GENERAL PROVISIONS

SEC . 301.6301 . STATUTORY PROVISIONS; COLLECTION AUTHORITY.

SEC . 6301. COLLECTION AUTHORITY.

The Secretary or his delegate shall collect the taxes imposed by the internal revenue laws.

SEC . 301.6301 -1. COLLECTION AUTHORITY.--The taxes imposed by the internal revenue laws shall be collected by District Directors of internal revenue. See, however, section 6304, relating to the collection of certain taxes under the provisions of the Tariff Act of 1930.

SEC . 301.6302 . STATUTORY PROVISIONS; MODE OR TIME OF COLLECTION.

SEC . 6302. MODE OR TIME OF COLLECTION.

(a) Establishment by regulations. If the mode or time for collecting any tax is not provided for by this title, the Secretary or his delegate may establish the same by regulations.

(b) Discretionary method. Whether or not the method of collecting any tax imposed by chapters 21, 31, 32, 33, sections 4501(a) or 4511 of chapter 37, or sections 4701 or 4721 of chapter 39 is specifically provided for by this title, any such tax may, under regulations prescribed by the Secretary or his delegate, be collected by means of returns, stamps, coupons, tickets, books, or such other reasonable devices or methods as may be necessary or helpful in securing a complete and proper collection of the tax.

(c) Use of Government depositaries. The Secretary or his delegate may authorize Federal Reserve banks, and incorporated banks or trust companies which are depositaries or financial agents of the United States, to receive any tax imposed under the internal revenue laws, in such manner, at such times, and under such conditions as he may prescribe; and he shall prescribe the manner, times, and conditions under which the receipt of such tax by such banks and trust companies is to be treated as payment of such tax to the Secretary or his delegate.

SEC . 301.6302 -1. USE OF FEDERAL RESERVE BANKS AND AUTHORIZED COMMERCIAL BANKS IN CONNECTION WITH THE PAYMENT OF CERTAIN EMPLOYMENT AND EXCISE TAXES.--For regulations under this section--

(a) With respect to employment taxes under the Federal Insurance Contributions Act and the income tax withheld at source on wages, see section 31.6302(c)--1 of this chapter;

(b) With respect to the employer tax and the employee tax under the Railroad Retirement Tax Act, see section 31.6302(c)-2 of this chapter; and

(c) With respect to certain excise taxes, see section 40.6151-1, section 42.0611-1, and section 46.6011-1 of this chapter.

SEC . 301.6303 . STATUTORY PROVISIONS; NOTICE AND DEMAND FOR TAX.

SEC . 6303. NOTICE AND DEMAND FOR TAX.

(a) General rule.--Where it is not otherwise provided by this title, the Secretary or his delegate shall, as soon as practicable, and within 60 days, after the making of an assessment of a tax pursuant to section 6203, give notice to each person liable for the unpaid tax, stating the amount and demanding payment thereof. Such notice shall be left at the dwelling or usual place of business of such person, or shall be sent by mail to such person's last known address.

(b) Assessment prior to last date for payment.--Except where the Secretary or his delegate believes collection would be jeopardized by delay, if any tax is assessed prior to the last date prescribed for payment of such tax, payment of such tax shall not be demanded under subsection (a) until after such date.

SEC . 301.6303 -1. NOTICE AND DEMAND FOR TAX--(a) General rule.--Where it is not otherwise provided by the Code, the district director shall, after the making of an assessment of a tax pursuant to section 6203, give notice to each person liable for the unpaid tax, stating the amount and demanding payment thereof. Such notice shall be given as soon as possible and within 60 days. However, the failure to give notice within 60 days does not invalidate the notice. Such notice shall be left at the dwelling or usual place of business of such person, or shall be sent by mail to such person's last known address.

(b) Assessment prior to last date for payment.--If any tax is assessed prior to the last date prescribed for payment of such tax, the District Director will not demand that such tax be paid before such last date, except where the District Director believes collection would be jeopardized by delay.

SEC . 301.6304 . STATUTORY PROVISIONS; COLLECTION UNDER THE TARIFF ACT.

SEC . 6304. COLLECTION UNDER THE TARIFF ACT.

For collection under the provisions of the Tariff Act of 1930 of the taxes imposed by section 4501(b), and subchapters A, B, C, D, and E of chapter 38, see sections 4504 and 4601, respectively.

RECEIPT OF PAYMENT

SEC . 301.6311 . STATUTORY PROVISIONS; PAYMENT BY CHECK OR MONEY ORDER.

SEC . 6311. PAYMENT BY CHECK OR MONEY ORDER.

(a) Authority to receive.--It shall be lawful for the Secretary or his delegate to receive for internal revenue taxes, or in payment for internal revenue stamps, checks or money orders, to the extent and under the conditions provided in regulations prescribed by the Secretary or his delegate.

(b) Check or money order unpaid.

(1) Ultimate liability.--If a check or money order so received is not duly paid, the person by whom such check or money order has been tendered shall remain liable for the payment of the tax or for the stamps, and for all legal penalties and additions, to the same extent as if such check or money order had not been tendered.

(2) Liability of banks and others.--If any certified, treasurer's, or cashier's check or any money order so received is not duly paid, the United States shall, in addition to its right to exact payment from the party originally indebted therefor, have a lien for the amount of such check upon all the assets of the bank or trust company on which drawn or for the amount of such money order upon all the assets of the issuer thereof; and such amount shall be paid out of such assets in preference to any other claims whatsoever against such bank or issuer except the necessary costs and expenses of administration and the reimbursement of the United States for the amount expended in the redemption of the circulating notes of such bank.

SEC . 301.6311 -1. PAYMENT BY CHECK OR MONEY ORDER--(a) Authority to receive--(1) In general.--(i) District Directors may accept checks drawn on any bank or trust company incorporated under the laws of the United States or under the laws of any State, Territory, or possession of the United States or money orders in payment for internal revenue taxes, provided such checks or money orders are collectible in United States currency at par. District Directors may accept such checks or money orders in payment for internal revenue stamps, or for the prepayment of the taxes on wines as authorized by the Wine Regulations prescribed under chapter 51 (pt. 240 of this chapter), to the extent and under the conditions prescribed in subparagraph (2) of this paragraph. A check or money order is payable at par only if the full amount thereof is payable without any deduction for exchange or other charges. As used in this section, the term "money order" means: (a) United States postal, bank, express, or telegraph money order; (b) money order issued by a domestic building and loan association (as defined in section 7701(a)(19)) or by a similar association incorporated under the laws of a possession of the United States; (c) a money order issued by such other organization as the Commissioner may designate; and (d) a money order described in subdivision (ii) of this subparagraph in cases therein described. However, the District Director may refuse to accept any personal check whenever he has good reason to believe that such check will not be honored upon presentment.

(ii) An American citizen residing in a country with which the United States maintains direct exchange of money orders on a domestic basis may pay his tax by postal money order of such country. Such countries presently are: Antigua, the Bahamas, Barbados, Bermuda, British Guiana, British Honduras, British Virgin Islands, Canada, Canal Zone, Cuba, Dominica, Grenada, Jamaica, Montserrat, Nevis, St. Kitts, St. Lucia, St. Vincent, and Trinidad and Tobago.

(iii) If one check or money order is remitted to cover two or more persons' taxes, the remittance should be accompanied by a letter of transmittal clearly identifying--

(a) Each person whose tax is to be paid by the remittance;

(b) The amount of the payment on account of each such person; and

(c) The kind of tax paid.

(2) Payment for internal revenue stamps; prepayment of wine tax.--The District Director may accept checks and money orders described in subparagraph (1) of this paragraph in payment for internal revenue stamps other than stamps for taxes imposed under subchapter F of chapter 39 (relating to silver bullion), stamps for taxes imposed under chapter 34 (relating to documentary stamps), stamps for taxes on distilled spirits imposed under chapter 51, including the rectification tax, and stamps for taxes imposed under chapter 52 (relating to tobacco and manufactures), and in prepayment of the taxes on wines as authorized by the Wine Regulations prescribed under chapter 51 (pt. 240 of this chapter). The District Director may accept in payment for such taxes certified, cashiers' or treasurers' checks drawn on any bank or trust company incorporated under the laws of the United States or under the laws of any State, Territory, or possession of the United States or money orders described in subparagraph (1) of this paragraph. However, if an application has been submitted by a person desiring to tender personal checks for such taxes or in prepayment of wine taxes, and the application has been approved by the District Director, the District Director may accept such personal checks as are described in subdivision (i) of subparagraph (1) of this paragraph. The application shall be made to the District Director and shall contain the applicant's name, address, firm name (if any), such financial information as will enable the District Director to determine the amount of the credit to be extended to the applicant, and the approximate value of stamps to be purchased or the amount of wine taxes to be prepaid during the period fixed by the District Director. The District Director is authorized to approve or disapprove such application and, if the application is approved, to fix the maximum amount of the value of the internal revenue stamps or of the prepayment of the taxes on wines for which personal checks will be accepted and to prescribe such other limitations and conditions as he deems appropriate. The District Director may, for good cause, discontinue at any time the acceptance of personal checks under the provisions of this subparagraph.

(b) Checks or money orders not paid--(1) Ultimate liability.--The person who tenders any check (whether certified or uncertified, cashier's, treasurer's, or other form of check) or money order in payment for taxes or stamps is not released from his liability until the check or money order is paid; and, if the check or money order is not duly paid, he shall also be liable for all legal penalties and additions, to the same extent as if such check or money order had not been tendered. For the penalty in case a check or money order is not duly paid, see section 6657 and the regulations thereunder. For assessment of the amount of a check or money order not duly paid, see section 6201(a)(2)(B) and the regulations thereunder.

(2) Liability of banks and others.--If any certified treasurer's or cashier's check or money order is not duly paid, the United States shall have a lien for the amount of such check upon all assets of the bank or trust company on which drawn or for the amount of such money order upon the assets of the issuer thereof. The unpaid amount shall be paid out of such assets in preference to any other claims against such bank or issuer except the necessary costs and expenses of administration and the reimbursement of the United States for the amount expended in the redemption of the circulating of the United States for the addition, the Government has the right to exact payment from the person required to make the payment.

SEC . 301.6312 . STATUTORY PROVISIONS; PAYMENT BY UNITED STATES NOTES AND CERTIFICATES OF INDEBTEDNESS.

SEC . 6312. PAYMENT BY UNITED STATES NOTES AND CERTIFICATES OF INDEBTEDNESS

(a) General rule.--It shall be lawful for the Secretary or his delegate to receive, at par with an adjustment for accrued interest, Treasury bills, notes and certificates of indebtedness issued by the United States in payment of any internal revenue taxes, or in payment for internal revenue stamps, to the extent and under the conditions provided in regulations prescribed by the Secretary or his delegate.

(b) Cross references.--(1) For authority to receive silver certificates, see section 5 of the act of June 19, 19 34 (48 Stat. 1178; 31 U. S. C. 405a).

(2) For full legal tender status of all coins and currencies of the United States, see section 43(b)(1) of the Agricultural Adjustment Act, as amended (48 Stat. 52, 113; 31 U. S. C. 462).

(3) For authority to receive obligations under the Second Liberty Bond Act, see section 20(b) of that act, as amended (56 Stat. 189; 31 U. S. C. 754b).

SEC . 301.6312 -1. TREASURY CERTIFICATES OF INDEBTEDNESS, TREASURY NOTES, AND TREASURY BILLS ACCEPTABLE IN PAYMENT OF INTERNAL REVENUE TAXES OR STAMPS.--(a) Treasury certificates of indebtedness. Treasury notes or Treasury bills of any series (not including interim receipts issued by Federal reserve banks in lieu of definitive certificates, notes, or bills) may be tendered at or before maturity in payment of internal revenue taxes due on the date (or in payment for stamps purchased on the date), on which the certificates, notes, or bills mature, or in payment of internal revenue taxes due on a specified prior date, but only if such certificates, notes, or bills, according to the express terms of their issue, are made acceptable in payment of such taxes or for the purchase of stamps. If the taxes for which the certificates, notes, or bills are tendered in payment become due, or the stamps are purchased, on the same date as that on which such certificates, notes, or bills mature, they will be accepted at par plus accrued interest, if any, payable with the principal (not represented by coupons attached) in payment of such taxes or stamps. If the taxes for which the certifcates, notes, or bills are tendered in payment become due, or the stamps are purchased, on a date prior to that on which the certificates, notes, or bills mature, they will be accepted at the value specified in the terms under which such certificates, notes, or bills were issued. All interest coupons attached to Treasury certificates of indebtedness or Treasury notes shall be detached by the taxpayer before such certificates or notes are tendered in payment of taxes or stamps.

(b) Receipts given by a District Director for Treasury certificates of indebtedness, Treasury notes, or Treasury bills received in payment of internal revenue taxes or for stamps as provided in this section shall contain an adequate description of such certificates, notes, or bills, and a statement of the value, including accrued interest, if any, payable with the principal (not represented by coupons attached), at which accepted, and shall show that the certificates, notes, or bills are tendered by the taxpayer and received by the District Director, subject to no condition, qualification, or reservation whatsoever, in payment of an amount of taxes or for stamps no greater than such value. Any certificate, note, or bill offered in payment of internal revenue taxes or for stamps subject to any condition, qualification, or reservation, or for any greater amount than the value at which acceptable in payment of taxes or stamps, as specified in the terms under which such certificate, note, or bill was issued, shall not be deemed to be duly tendered and shall be returned to the taxpayer.

(c) For the purpose of saving taxpayers the expense of transmitting Treasury certificates of indebtedness, Treasury notes, or Treasury bills to the office of the District Director in whose district the taxes are payable, or stamps are to be purchased, taxpayers desiring to pay taxes, or purchase stamps, with such certificates, notes, or bills acceptable in payment of taxes or for the purchase of stamps may deposit such certificates, notes, or bills with a Federal reserve bank or branch. In such cases, the Federal reserve bank or branch shall issue a receipt in the name of the District Director, describing the certificates, notes, or bills by par or dollar face amount and stating on the face of the receipt that the certificates, notes, or bills represented thereby are held by the bank or branch for redemption at the value specified in the terms under which the certificates, notes, or bills were issued, and for application of the proceeds in payment of taxes due or for the purchase of stamps on a specified date by the taxpayer named therein.

SEC . 301.6312 -2. CERTAIN TREASURY SAVINGS NOTES ACCEPTABLE IN PAYMENT OF CERTAIN INTERNAL REVENUE TAXES.--According to the express terms of their issue, the following series of Treasury savings notes are presently acceptable in payment of income taxes (current and back, personal and corporation taxes, and excess profits taxes) and estate and gift taxes (current and back):

(a) Treasury Savings Notes, Series A,

(b) Treasury Savings Notes, Series B,

(c) Treasury Savings Notes, Series C.

SEC . 301.6313 . STATUTORY PROVISIONS; FRACTIONAL PARTS OF A CENT .

SEC . 6313. FRACTIONAL PARTS OF A CENT .

In the payment of any tax imposed by this title not payable by stamp, a fractional part of a cent shall be disregarded unless it amounts to one-half cent or more, in which case it shall be increased to 1 cent.

SEC . 301.6313 -1. FRACTIONAL PARTS OF A CENT .--In the payment of any tax not payable by stamp, a fractional part of a cent shall be disregarded unless it amounts to one-half cent or more, in which case it shall be increased to one cent. Fractional parts of a cent shall not be disregarded in the computation of taxes.

SEC . 301.6314 . STATUTORY PROVISIONS; RECEIPT FOR TAXES.

SEC . 6314. RECEIPT FOR TAXES.

(a) General rule.--The Secretary or his delegate shall, upon request, give receipts for all sums collected by him, excepting only when the same are in payment for stamps sold and delivered; but no receipts shall be issued in lieu of a stamp representing a tax.

(b) Duplicate receipts for payment of estate taxes.--The Secretary or his delegate shall, upon request, give to the person paying the tax under chapter 11 (relating to the estate tax) duplicate receipts, either of which shall be sufficient evidence of such payment, and shall entitle the executor to be credited and allowed the amount thereof by any court having jurisdiction to audit or settle his accounts.

(c) Cross references.--(1) For receipt required to be furnished by employer to employee with respect to employment taxes, see section 6051.

(2) For receipt of discharge of executor from personal liability, see section 2204.

SEC . 301.6314 -1. RECEIPT FOR TAXES--(a) In general.--The District Director shall issue a receipt for each tax payment made in cash (other than a payment for stamps sold and delivered). In the case of payments made by check, the canceled check is usually a sufficient receipt. However, upon request, the District Director shall issue a receipt for such payment (other than a payment for stamps sold and delivered). No receipt shall be issued in lieu of a stamp representing a tax, whether the payment is in cash or otherwise.

(b) Duplicate receipt for payment of estate taxes. Upon request, the District Director will issue duplicate receipts to the person paying the estate tax, either of which will be sufficient evidence of such payment and entitle the executor to be credited with the amount by any court having jurisdiction to audit or settle his accounts. For definition of the term "executor," see section 2203.

SEC . 301.6315 . STATUTORY PROVISIONS; PAYMENTS OF ESTIMATED INCOME TAX.

SEC . 6315. PAYMENTS OF ESTIMATE INCOME TAX.

Payment of the estimated income tax, or any installment thereof, shall be considered payment on account of the income taxes imposed by subtitle A for the taxable year.

SEC . 301.6315 -1. PAYMENTS OF ESTIMATED INCOME TAX.--The payment of any installment of the estimated income tax (see sections 6015 and 6016) shall be considered payment on account of the income tax for the taxable year for which the estimate is made. The aggregate amount of the payments of estimated tax should be entered upon the income tax return for such taxable year as payments to be applied against the tax shown on such return.

SEC . 301.6316 . STATUTORY PROVISIONS; PAYMENT BY FOREIGN CURRENCY.

SEC . 6316. PAYMENT BY FOREIGN CURRENCY.

The Secretary or his delegate is authorized in his discretion to allow payment of taxes in the currency of a foreign country under such circumstances and subject to such conditions as the Secretary or his delegate may by regulations prescribe.

LIEN FOR TAXES

SEC . 301.6321 . STATUTORY PROVISIONS; LIEN FOR TAXES.

SEC . 6321. LIEN FOR TAXES.

If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount (including any interest, additional amount, addition to tax, or assessable penalty, together with any costs that may accrue in addition thereto) shall be a lien in favor of the United States upon all property and rights to property, whether real or personal, belonging to such person.

SEC . 301.6321 -1. LIEN FOR TAXES.--If any person liable to pay any tax neglects or refuses to pay the same after demand, the amount (including any interest, additional amount, addition to tax, or assessable penalty, together with any costs that may accrue in addition thereto) shall be a lien in favor of the United States upon all property and rights to property, whether real or pensonal, tangible or intangible, belonging to such person. The lien attaches to all property and rights to property belonging to such person at any time during the period of the lien, including any property or rights to property acquired by such person after the lien arises. For the special lien for estate and gift taxes, see section 6324 and section 301.6324 -1.

SEC . 301.6322 . STATUTORY PROVISIONS; PERIOD OF LIEN.

SEC . 6322. PERIOD OF LIEN.

Unless another date is specifically fixed by law, the lien imposed by section 6321 shall arise at the time the assessment is made and shall continue until the liability for the amount so assessed is satisfied or becomes unenforceable by reason of lapse of time.

SEC . 301.6323 . STATUTORY PROVISIONS; VALIDITY AGAINST MORTGAGEES, PLEDGEES, PURCHASERS, AND JUDGMENT CREDITORS.

SEC . 6323. VALIDITY AGAINST MORTGAGEES, PLEDGEES, PURCHASERS, AND JUDGMENT CREDITORS.

(a) Invalidity of lien without notice.--Except as otherwise provided in subsection (c), the lien imposed by section 6321 shall not be valid as against any mortgagee, pledgee, purchaser, or judgment creditor until notice thereof has been filed by the Secretary or his delegate.

(1) Under State or territorial laws.--In the office designated by the law of the State or Territory in which the property subject to the lien is situated, whenever the State or Territory has by law designated an office within the State or Territory for the filing of such notice; or

(2) With clerk of district court.--In the office of the clerk of the United States district court for the judicial district in which the property subject to the lien is situated, whenever the State or Territory has not by law designated an office within the State or Territory for the filing of such notice; or

(3) With clerk of district court for District of Columbia.--In the office of the clerk of the United States District Court for the District of Columbia, if the property subject to the lien is situated in the District of Columbia.

(b) Form of notice.--If the notice filed pursuant to subsection (a)(1) is in such form as would be valid if filed with the clerk of the United States district court pursuant to subsection (a)(2), such notice shall be valid notwithstanding any law of the State or Territory regarding the form or content of a notice of lien.

(c) Exception in case of securities.

(1) Exception.--Even though notice of a lien provided in section 6321 has been filed in the manner prescribed in subsection (a) of this section, the lien shall not be valid with respect to a security, as defined in paragraph (2) of this subsection, as against any mortgagee, pledgee, or purchaser of such security, for an adequate and full consideration in money or money's worth, if at the time of such mortgage, pledge, or purchase such mortgagee, pledgee, or purchaser is without notice or knowledge of the existence of such lien.

(2) Definition of security.--As used in this subsection, the term "security" means any bond, debenture, note, or certificate or other evidence of indebtedness, issued by any corporation (including one issued by a government or political subdivision thereof), with interest coupons or in registered form, share of stock, voting trust certificate, or any certificate of interest or participation in, certificate of deposit or receipt for, temporary or interim certificate for, or warrant or right to subscribe to or purchase, any of the foregoing; negotiable instrument; or money.

(d) Disclosure of amount of outstanding lien.--If a notice of lien has been filed under subsection (a), the Secretary or his delegate is authorized to provide by rules or regulations the extent to which, and the conditions under which, information as to the amount of the outstanding obligation secured by the lien may be disclosed.

SEC . 301.6323 -1. VALIDITY OF LIEN AGAINST MORTGAGEES, PLEDGEES, PURCHASERS, AND JUDGMENT CREDITORS.--(a) Invalidity of lien without notice--(1) Filing of notice. The lien imposed by section 6321 shall not be valid as against any mortgagee, pledgee, purchaser, or judgment creditor until notice of lien has been filed. (See, however, section 6323(c) and paragraph (b) of this section, relating to the circumstances under which the lien is not valid with respect to a security even though notice thereof is duly filed.) The place for the filing of the notice of lien is--

(i) The office designated by the law of the State or Territory in which the property subject to the lien is situated, whenever the State or Territory has designated an office within the State or Territory for the filing of such notice;

(ii) The office of the clerk of the United States district court for the judicial district in which the property subject to the lien is situated, whenever the State or Territory has not by law designated an office within the State or Territory for the filing of such notice; or

(iii) The office of the clerk of the United States District Court for the District of Columbia if the property subject to the lien is situated in the District of Columbia.

(2) Meaning of terms. (i) As used in section 6323 and this section--

(a) The term "purchaser" means a person who, for a valuable present consideration, acquires property or an interest in property.

(b) The term "judgment creditor" means a person who has obtained a valid judgment in a court of record and of competent jurisdiction for the recovery of specifically designated property or for, a certain sum of money and, in the case of a judgment for the recovery of a certain sum of money, who has a perfected lien under such judgment on the property involved. The term "judgment" does not include an inchoate lien, such as an attachment lien, unless and until such lien has ripened into a judgment. United States v. Security Trust and Savings Bank (1950) 340 U. S. 47. Nor does the term "judgment" include the determination of a quasi-judicial body or of an individual acting in a quasi-judicial capacity, such as, for example, the action of State taxing authorities. United States v. Gilbert Associates (1953) 345 U. S. 361; and United States v. City of New Britain (1954) 347 U. S. 81.

(ii) The determination whether a person is a mortgagee, pledgee, purchaser, or judgment creditor, entitled to the protection of section 6323(a), shall be made by reference to the realities and the facts in a given case rather than to the technical form or terminology used to designate such person. Thus, a person who is in fact and in law a mortgagee, pledgee, or purchaser will be entitled as such to the protection of section 6323(a) even though such person is otherwise designated under the law of a State, such as the Uniform Commercial Code.

(3) Form of notice. The form to be used for filing the notice of lien shall be Form 668, "Notice of Federal Tax Lien under Internal Revenue Laws." Such notice, filed in the office designated by the law of a State or Territory, shall be valid notwithstanding any law of the State or Territory regarding the form or content of a notice of lien. For example, the omission from the notice of lien of a description of the property subject to the lien will not affect the validity thereof, even though the law of the State or Territory requires that the notice of lien contain a description of the property subject to the lien.

(b) Exception in case of securities--(1) Exception.--Even though a notice of lien provided for in section 6321 has been filed in the manner prescribed in section 6323(a), the lien shall not be valid with respect to a security, as defined in section 6323(c)(2), as against any mortgagee, pledgee, or purchaser of such security, for an adequate and full consideration in money or money's worth, if at the time of such mortgage, pledge, or purchase such mortgagee, pledgee, or purchaser is without notice or knowledge of the existence of such lien. An adequate and full consideration in money or money's worth, as used in section 6323(c), means that the consideration must have been an adequate and full equivalent reducible to a money value. A purchase of property made in the ordinary course of business (that is, a transaction which is bona fide and made at arm's length) will be considered as made for an adequate and full consideration in money or money's worth. A relinquishing or promised relinquishment of dower, curtesy, or of a statutory estate created in lieu of dower or curtesy, or of other marital rights is not a consideration in money or money's worth. Nor is love and affection, promise of marriage, or any other consideration not reducible to a money value a consideration in money or money's worth.

(2) Definition of security.--As used in section 6323(c), the term "security" means: Any bond, debenture, note or certificate or other evidence of indebtedness, issued by any corporation (including one issued by a government or political subdivision thereof), with interest coupons or in registered form, share of stock, voting trust certificate, or any certificate of interest or participation in, certificate of deposit or receipt for, temporary or interim certificate for, or warrant or right to subscribe to or purchase, any of the foregoing; negotiable instrument; or money.

(c) Disclosure of amount of outstanding lien.--(1) If a notice of lien has been filed, the District Director to whom the assessment which gave rise to the lien is charged is authoribed to disclose information as to the amount of the outstanding obligation secured by the lien to any person who has a proper interest in determining the amount of the outstanding obligation. Any person desiring such information should present to the District Director a written request. Such request should clearly describe the property subject to the lien, identify the applicable lien, and give the reasons for requesting such information. Any person who has a right in the property or intends to obtain a right in the property by purchase or otherwise will, upon satisfactory proof of such right or of the intention to obtain such right, be considered to have a proper interest.

(2) If the District Director determines that the applicant is entitled to the information requested, he will disclose to such applicant the total amount of the outstanding obligation secured by the lien.

(3) The Commissioner may disclose the amount of any outstanding obligation secured by the lien if he determines such action is warranted under the facts and circumstances in the particular case.

(4) The provisions of this paragraph apply to any notice of lien filed under section 6323 or corresponding provisions of prior internal revenue laws.

(d) Application of section 6323 to liens imposed under section 3670 of the Internal Revenue Code of 1939.--In the case of any lien arising under section 3670 of the Internal Revenue Code of 1939 or the corresponding provisions of prior law (relating to the general tax lien) which is in effect on January 1, 19 55, the provisions of section 6323 shall be applicable to such lien on and after such date in lieu of the provisions of section 3672 of the Internal Revenue Code of 1939 or the corresponding provisions of prior law.

SEC . 301.6324 STATUTORY PROVISIONS; SPECIAL LIENS FOR ESTATE AND GIFT TAXES.

SEC . 6324. SPECIAL LIENS FOR ESTATE AND GIFT TAXES.

(a) Liens for estate tax. Except as otherwise provided in subsection (c) (relating to transfers of securities).

(1) Upon gross estate.--Unless the estate tax imposed by chapter 11 is sooner paid in full, it shall be a lien for 10 years upon the gross estate of the decedent, except that such part of the gross estate as is used for the payment of charges against the estate and expenses of its administration, allowed by any court having jurisdiction thereof, shall be divested of such lien.

(2) Liability of transferees and others.--If the estate tax imposed by chapter 11 is not paid when due, then the spouse, transferee, trustee (except the trustee of an employee's trust which meets the requirements of section 401(a)), surviving tenant, person in possession of the property by reason of the exercise, nonexercise, or release of a power of appointment, or beneficiary, who receives, or has on the date of the decedents' death, property included in the gross estate under sections 2034 to 2042, inclusive, to the extent of the value, at the time of the decedent's death, of such property, shall be personally liable for such tax. Any part of such property transferred by (or transferred by a transferee of) such spouse, transferee, trustee, surviving tenant, person in possession of property by reason of the exercise, nonexercise, or release of a power of appointment, or beneficiary, to a bona fide purchaser, mortgagee, or pledgee, for an adequate and full consideration in money or money's worth shall be divested of the lien provided in paragraph (1) and a like lien shall then attach to all the property of such spouse, transferee, trustee, surviving tenant, person in possession, beneficiary, or transferee of any such person, except any part transferred to a bona fide purchaser, mortgagee, or pledgee for an adequate and full consideration in money or money's worth.

(3) Continuance after discharge of executor.--The provisions of section 2204 (relating to discharge of executor from personal liability) shall not operate as a release of any part of the gross estate from the lien for any deficiency that may thereafter be determined to be due, unless such part of the gross estate (or any interest therein) has been transferred to a bona fide purchaser, mortgagee, or pledgee for an adequate and full consideration in money, or money's worth, in which case such part (or such interest) shall not be subject to a lien or to any claim or demand for any such deficiency, but the lien shall attach to the consideration received from such purchaser, mortgagee, or pledgee by the heirs, legatees, devisees, or distributees.

(b) Lien for gift tax.--Except as otherwise provided in subsection (c) (relating to transfers of securities), the gift tax imposed by chapter 12 shall be a lien upon all gifts made during the calendar year, for 10 years from the time the gifts are made. If the tax is not paid when due, the donee of any gift shall be personally liable for such tax to the extent of the value of such gift. Any part of the property comprised in the gift transferred by the donee (or by a transferee of the donee) to a bona fide purchaser, mortgagee, or pledgee for an adequate and full consideration in money or money's worth shall be divested of the lien herein imposed and the lien, to the extent of the value of such gift, shall attach to all the property (including after-acquired property) of the donee (or the transferee) except any part transferred to a bona fide purchaser, mortgagee, or pledgee for an adequate and full consideration in money or money's worth.

(c) Exception in case of securities. The lien imposed by subsection (a) or (b) shall not be valid with respect to a security, as defined in section 6323(c)(2), as against any mortgagee, pledgee, or purchaser of any such security, for an adequate and full consideration in money or money's worth, if at the time of such mortgage, pledge, or purchase such mortgagee, pledgee, or purchaser is without notice or knowledge of the existence of such lien.

SEC . 301.6324 -1. SPECIAL LIENS FOR ESTATE AND GIFT TAXES; PERSONAL LIABILITY OF TRANSFEREES AND OTHERS.--(a) Estate tax. (1) The lien imposed by section 6324(a) attaches at the date of the decedent's death to every part of the gross estate, whether or not the property comes into the possession of the duly qualified executor or administrator. It attaches to the extent of the tax shown to be due by the return and of any deficiency in tax found to be due upon review and audit. If the estate tax is not paid when due, then the spouse, transferee, trustee (except the trustee of an employee's trust which meets the requirements of section 401(a)), surviving tenant, person in possession of the property by reason of the exercise, nonexercise, or release of a power of appointment, or beneficiary, who receives, or has on the date of the decedent's death, property included in the gross estate under sections 2034 to 2042, inclusive, shall be personally liable for such tax to the extent of the value, at the time of the decedent's death, of such property.

(2) Unless the tax is paid in full, and except as otherwise provided in section 6324(c) (relating to transfers of securities), the lien upon the entire property constituting the gross estate continues for a period of 10 years after the decedent's death, except that such lien shall be divested with respect to:

(i) Such portion of the gross estate as is used for the payment of charges against the estate and expenses of its administration allowed by any court having jurisdiction thereof;

(ii) Such property as is transferred to a bona fide purchaser, mortgagee, or pledgee, for an adequate and full consideration in money or money's worth, by the spouse, transferee, trustee, surviving tenant, person in possession of the property by reason of the exercise, nonexercise, or release of a power of appointment, or beneficiary, who receives, or has on the date of the decedent's death, property included in the gross estate under sections 2034 to 2042, inclusive (or the corresponding provisions of the Internal Revenue Code of 1939), or such property as is transferred by the transferee of such person. In such case, a like lien attaches to all the property of such spouse, transferee, trustee, surviving tenant, person in possession, beneficiary, or transferee of any such person, except such part thereof as may be transferred to a bona fide purchaser, mortgagee, or pledgee for an adequate and full consideration in money or money's worth. See paragraph (b)(1) of section 301.6323 -1 for the meaning of the term "an adequate and full consideration in money or money's worth";

(iii) Such portion of the gross estate (or any interest therein) as has been transferred to a bona fide purchaser, mortgagee, or pledgee for an adequate and full consideration in money or money's worth, if payment is made of the full amount of tax determined by the District Director pursuant to a request of the executor for discharge from personal liability as authorized by section 2204 (relating to discharge of executor from personal liability), but there is substituted a like lien upon the consideration received from such purchaser, mortgagee, or pledgee by the heirs, legatees, devisees, or distributees; and

(iv) Such property as to which the District Director has issued a certificate releasing the lien pursuant to section 6325.

(b) Lien for gift tax.--Except as provided in section 6324(c) (relating to securities), a lien attaches upon all gifts made during the calendar year for the amount of the tax imposed upon the gifts made during such year. The lien extends for a period of 10 years from the time the gifts were made, unless the tax is sooner paid. If the tax is not paid when due, the donee of any gift becomes personally liable for the tax to the extent of the value of his gift. Any part of the property comprised in the gift which is transferred by the donee (or by a transferee of the donee) to a bona fide purchaser, mortgagee, or pledgee, for an adequate and full consideration in money or money's worth, is divested of the lien, but a like lien to the extent of the value of such gift attaches to all the property (including after-acquired property) of the donee (or the transferee), except any part transferred to a bona fide purchaser, mortgagee, or pledgee, for an adequate and full consideration in money or money's worth. See paragraph (b)(1) of section 301.6323 -1 for the meaning of the term "an adequate and full consideration in money or money's worth."

(c) Application of lien imposed by section 6321.--The general lien under section 6321 and the special lien under subsection (a) or (b) of section 6324 for the estate or gift tax are not exclusive of each other, but are cumulative. Each lien will arise when the conditions precedent to the creation of such lien are met and will continue in accordance with the provisions applicable to the particular lien. Thus, the special lien may exist without the general lien being in force, or the general lien may exist without the special lien being in force, or the general lien and the special lien may exist simultaneously, depending upon the facts and pertinent statutory provisions applicable to the respective liens.

(d) Application of section 6324 to estate and gift tax liens imposed under the Internal Revenue Code of 1939.--In the case of any lien arising under section 827 or 1009 of the Internal Revenue Code of 1939 (relating to liens for estate and gift taxes, respectively) which is in effect on January 1, 19 55, the provisions of section 6324 shall be applicable to such lien on and after such date in lieu of the provisions of section 827 or 1009 of the 1939 Code.

SEC . 301.6325 . STATUTORY PROVISIONS; RELEASE OF LIEN OR PARTIAL DISCHARGE OF PROPERTY.

SEC . 6325. RELEASE OF LIEN OR PARTIAL DISCHARGE OF PROPERTY.

(a) Release of lien.--Subject to such rules or regulations as the Secretary or his delegate may prescribe, the Secretary or his delegate may issue a certificate of release of any lien imposed with respect to any internal revenue tax if--

(1) Liability satisfied or unenforceable.--The Secretary or his delegate finds that the liability for the amount assessed, together with all interest in respect thereof, has been fully satisfied, has become legally unenforceable, or, in the case of the estate tax imposed by chapter 11 or the gift tax imposed by chapter 12, has been fully satisfied or provided for; or

(2) Bond accepted.--There is furnished to the Secretary or his delegate and accepted by him a bond that is conditioned upon the payment of the amount assessed, together with all interest in respect thereof, within the time prescribed by law (including any extension of such time), and that is in accordance with such requirements relating to terms, conditions, and form of the bond and sureties thereon, as may be specified by such rules or regulations.

(b) Partial discharge of property.

(1) Property double the amount of the liability.--Subject to such rules or regulations as the Secretary or his delegate may prescribe, the Secretary or his delegate may issue a certificate of discharge of any part of the property subject to any lien imposed under this chapter if the Secretary or his delegate finds that the fair market value of that part of such property remaining subject to the lien is at least double the amount of the unsatisfied liability secured by such lien and the amount of all other liens upon such property which have priority to such lien.

(2) Part payment or interest of United States valueless.--Subject to such rules or regulations as the Secretary or his delegate may prescribe, the Secretary or his delegate may issue a certificate of discharge of any part of the property subject to the lien if--

(A) There is paid over to the Secretary or his delegate in part satisfaction of the liability secured by the lien an amount determined by the Secretary or his delegate, which shall not be less than the value, as determined by the Secretary or his delegate, of the interest of the United States in the part to be so discharged, or

(B) The Secretary or his delegate determines at any time that the interest of the United States in the part to be so discharged has no value.

In determining the value of the interest of the United States in the part to be so discharged, the Secretary or his delegate shall give consideration to the fair market value of such part and to such liens thereon as have priority to the lien of the United States.

(c) Effect of certificate of release or partial discharge.--A certificate of release or of partial discharge issued under this section shall be held conclusive that the lien upon the property covered by the certificate is extinguished.

(d) Cross references.--(1) For single bond complying with the requirements of both subsection (a)(2) and section 6165, see section 7102.

(2) For other provisions relating to bonds, see generally chapter 73.

(3) For provisions relating to suits to enforce lien, see section 7403.

(4) For provisions relating to suits to clear title to realty, see section 7424.

SEC . 301.6325 -1. RELEASE OF LIEN OR PARTIAL DISCHARGE OF PROPERTY--(a) Release of lien--(1) Liability satisfied or unenforceable. The District Director to whom is charged an assessment in respect of any internal revenue tax shall issue a certificate of release of any lien imposed with respect to such tax, whenever he finds that the liability for the amount assessed (together with all interest in respect thereof) has been satisfied or has become unenforceable as a matter of law (and not merely uncollectible or unenforceable as a matter of fact). Tax liabilities frequently are unenforceable in fact for the time being, due to the temporary nonpossession by the taxpayer of discoverable property or property rights. In all cases the liability for the payment of the tax continues until satisfaction of the tax in full or until the expiration of the statutory period for collection, including such extension of the period for collection as may be agreed upon in writing by the taxpayer and the District Director. The form to be used by the District Director is Form 669, "Certificate of Release of Federal Tax Lien."

(2) Estate or gift tax liability fully satisfied or provided for.--(i) If the District Director determines that the tax liability for estate or gift tax has been fully satisfied, he may issue his certificate releasing any or all property from the lien imposed thereon. If the District Director determines that the tax liability for estate or gift tax has been adequately provided for, he may issue his certificate releasing particular items of property from the lien. The issuance of such a certificate is a matter resting within the discretion of the District Director, and a certificate will be issued only in case there is actual need therefor. The primary purpose of such release is not to evidence payment or satisfaction of the tax, but to permit the transfer of property free from the lien in case it is necessary to clear title. The tax will be considered fully satisfied only when investigation has been completed and payment of the tax, including any deficiency determined, has been made.

(ii) An application for a release of the lien for estate or gift tax should be filed with the District Director charged with the assessment in respect of the tax. It should be made in writing under penalties of perjury and should explain the circumstances that require the release, and should fully describe the particular items for which the release is desired. In the case of an estate tax lien, the application should show the applicant's relationship to the estate, such as executor, heir, devisee, legatee, beneficiary, transferee, or purchaser. If the estate or gift tax return has not been filed, a statement under penalties of perjury may be required showing (a) the value of the property to be released, (b) the basis for such valuation, (c) in the case of the estate tax, the approximate value of the gross estate and the approximate value of the total real property included in the gross estate, and (d) in the case of the gift tax, the total amount of gifts made during the calendar year and the prior calendar years subsequent to the enactment of the Revenue Act of 1932 and the approximate value of all real estate subject to the gift tax lien, and (e) if the property is to be sold or otherwise transferred, the name and address of the purchaser or transferee and the consideration, if any, paid or to be paid by him.

(3) Bond accepted.--The District Director may, in his discretion, issue a certificate of release of any tax lien if he is furnished and accepts a bond that is conditioned upon the payment of the amount assessed (together with all interest in respect thereof), within the time agreed upon in the bond, but not later than 6 months before the expiration of the statutory period for collection, including any period for collection agreed upon in writing by the District Director and the taxpayer. For provisions relating to bonds, see sections 7101 and 7102 and the regulations thereunder.

(b) Discharge of specific property from the lien--(1) Property double the amount of the liability.--(i) The District Director may, in his discretion, issue a certificate of discharge of any part of the property subject to any tax lien if he determines that the fair market value of that part of the property remaining subject to the lien is at least double the sum of the amount of the unsatisfied liability secured by such lien and of the amount of all other liens upon such property which have priority to such lien. In general, fair market value is that amount which one ready and willing but not compelled to buy would pay to another ready and willing but not compelled to sell the property. The form to be used by the District Director is Form 669-A, "Certificate of Discharge of Property from Federal Tax Lien." For information required to be submitted in an application for a certificate of discharge, see subparagraph (4) of this paragraph.

(ii) The following example illustrates a case in which a certificate of discharge may not be given under this subparagraph:

Example: The Federal tax liability secured by a lien is $1,000. The fair market value of all property which after the discharge will continue to be subject to the Federal tax lien is $10,000. There is a prior mortgage on the property of $5,000, including interest, and the property is subject to a prior lien of $100 for real estate taxes. Accordingly, the taxpayer's equity in the property over and above the amount of the mortgage and real estate taxes is $4,900, or nearly five times the amount required to pay the assessed tax on which the Federal tax lien is based. Nevertheless, a discharge under this subparagraph is not permissible. In the illustration, the sum of the amount of the Federal tax liability ($1,000) and of the amount of the prior mortgage and the lien for real estate taxes ($5,000$100=$5,100) is $6,100. Double this sum is $12,200, but the fair market value of the remaining property is only $10,000. Hence, a discharge of the property is not permissible under this subparagraph, since the Code requires that the fair market value of the remaining property be at least double the sum of two amounts, one amount being the outstanding Federal tax liability and the other amount being all prior liens upon such property. In order that the discharge may be issued, it would be necessary that the remaining property be worth not less than $12,200.

(2) Part payment.--The District Director may, in his discretion, issue a certificate of discharge of any part of the property subject to the lien if there is paid over to him in part satisfaction of the liability secured by the lien an amount determined by him to be not less than the value of the interest of the United States in the property to be so discharged. In determining the amount to be paid, the District Director will take into consideration all the facts and circumstances of the case, including the expenses to which the Government has been put in the matter. In no case shall the amount to be paid be less than the value of the interest of the United States in the property with respect to which the certificate of discharge is to be issued, as such value has been determined by the District Director in the light of the fair market value of the property and the amount of all liens and encumberances thereon having priority over the Federal tax lien. The form to be used by the District Director is Form 669-B, "Certificate of Discharge of Property from Federal Tax Lien." For information required to be submitted in an application for a certificate of discharge, see subparagraph (4) of this paragraph.

(3) Interest of United States valueless.--The District Director may, in his discretion, issue a certificate of discharge of any part of the property subject to the lien if he determines that the interest of the United States in the property to be so discharged has no value. The form to be used by the District Director is Form 669-C, "Certificate of Discharge of Property from Federal Tax Lien." For information required to be submitted in an application for a certificate of discharge, see subparagraph (4) of this paragraph.

(4) Application for certificate of discharge.--Any person desiring a certificate of discharge of property from a Federal tax lien shall submit to the District Director to whom the assessment is charged a written application in triplicate, under penalties of perjury, requesting that the certificate be issued. The application shall contain the following information:

(i) A clear description of the property with respect to which the discharge is desired and, where applicable, of the property remaining subject to the lien;

(ii) The reason the discharge is sought;

(iii) A description of the Federal tax lien in respect of which the certificate of discharge is sought, including the amount, nature of the tax, the dates of assessment, and, if applicable, an appropriate reference to the registry and the page and volume of the book in which the notice of Federal tax lien is filed, indexed, or recorded, and the date of the filling of the notice;

(iv) A statement in numbered paragraphs of all facts material to the application, including the amount, character, and dates (both of execution and of record) of all encumbrances of record prior to the Federal lien, with an appropriate reference to the registry and the page and volume of the book in which each such encumbrance is recorded;

(v) The amounts, character, and dates of execution of any unrecorded encumbrances believed to be prior to the Federal tax lien, including information as to how and when such encumbrances arose;

(vi) In support of the application, the applicant must furnish proof sufficient to establish the fair market value of the property with respect to which the discharge is sought, and where applicable, proof sufficient to establish the fair market value of the property which will remain subject to the lien; and

(vii) Any other information which in the opinion of the applicant might have a bearing upon the determination to be made.