26 U.S.C. § 7425

Discharge of liens

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(a) Judicial proceedingsIf the United States is not joined as a party, a judgment in any civil action or suit described in subsection (a) of section 2410 of title 28 of the United States Code, or a judicial sale pursuant to such a judgment, with respect to property on which the United States has or claims a lien under the provisions of this title—(1) shall be made subject to and without disturbing the lien of the United States, if notice of such lien has been filed in the place provided by law for such filing at the time such action or suit is commenced, or(2) shall have the same effect with respect to the discharge or divestment of such lien of the United States as may be provided with respect to such matters by the local law of the place where such property is situated, if no notice of such lien has been filed in the place provided by law for such filing at the time such action or suit is commenced or if the law makes no provision for such filing.If a judicial sale of property pursuant to a judgment in any civil action or suit to which the United States is not a party discharges a lien of the United States arising under the provisions of this title, the United States may claim, with the same priority as its lien had against the property sold, the proceeds (exclusive of costs) of such sale at any time before the distribution of such proceeds is ordered.(b) Other salesNotwithstanding subsection (a) a sale of property on which the United States has or claims a lien, or a title derived from enforcement of a lien, under the provisions of this title, made pursuant to an instrument creating a lien on such property, pursuant to a confession of judgment on the obligation secured by such an instrument, or pursuant to a nonjudicial sale under a statutory lien on such property—(1) shall, except as otherwise provided, be made subject to and without disturbing such lien or title, if notice of such lien was filed or such title recorded in the place provided by law for such filing or recording more than 30 days before such sale and the United States is not given notice of such sale in the manner prescribed in subsection (c)(1); or(2) shall have the same effect with respect to the discharge or divestment of such lien or such title of the United States, as may be provided with respect to such matters by the local law of the place where such property is situated, if—(A) notice of such lien or such title was not filed or recorded in the place provided by law for such filing more than 30 days before such sale,(B) the law makes no provision for such filing, or(C) notice of such sale is given in the manner prescribed in subsection (c)(1).(c) Special rules(1) Notice of sale

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

(2) Consent to sale

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

(3) Sale of perishable goods

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

(4) Forfeitures of land sales contracts

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

(d) Redemption by United States(1) Right to redeem

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

(2) Amount to be paid

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

(3) Certificate of redemption(A) In general

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

(B) Filing

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

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

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

A prior section 7425 was renumbered 7434 of this title.

Amendments

1986—Subsec. (c)(4). Pub. L. 99–514 added par. (4).

1976—Pub. L. 94–455 struck out “or his delegate” after “Secretary” wherever appearing.

Statutory Notes and Related SubsidiariesEffective Date of 1986 Amendment

Pub. L. 99–514, title XV, § 1572(b), Oct. 22, 1986, 100 Stat. 2765, provided that: “The amendment made by subsection (a) [amending this section] shall apply to forfeitures after the 30th day after the date of the enactment of this Act [Oct. 22, 1986].”

Effective Date

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

Notes of Decisions

Cited in 126 cases (3 in the last 5 years), 1972–2025 · leading case: Russell v. United States, 551 F.3d 1174 (10th Cir. 2008).

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Russell v. United States, 551 F.3d 1174 (10th Cir. 2008). · cites it 14× “The government contends the district court erred in relying on Colorado law in granting the Russells judgment because a provision of the Internal Revenue Code, 26 U.S.C. § 7425 (b), preempts state law and leaves federal tax liens undisturbed where the government did not receive…”

Thomas Jerry Myers v. United States, 647 F.2d 591 (5th Cir. 1981). · cites it 21× “We agree with the district court that the foreclosure sale did not discharge the tax liens, because the executory foreclosure constituted an “other sale” within the meaning of 26 U.S.C. § 7425 (b), so that therefore the foreclosing creditor’s failure to serve notice upon the…”

Bank of Hemet v. United States, 643 F.2d 661 (9th Cir. 1981). · cites it 14× “On November 7, 1977, the government sought to exercise its right to redeem the property pursuant to 26 U.S.C. § 7425 by tendering to the Bank a check for $33,891.”

S. Bank of Lauderdale Cnty. v. Internal Revenue Serv., United States of Am., Mid-State Homes, Inc. v. United States, 770 F.2d 1001 (11th Cir. 1985). · cites it 20× “CLARK, Circuit Judge: These two cases, which were consolidated for oral argument purposes, present questions about the federal tax lien and the notice provisions of 26 U.S.C. § 7425 (b). In both cases the district court granted summary judgment in favor of the appellees Southern…”

Jay R. Orme Julie Ann Orme v. United States of Am., & Balyeat Law, P.C., as Tr., 269 F.3d 991 (9th Cir. 2001). · cites it 13× “The district court concluded that the forfeiture of a land sales contract was not a sale of property subject to the notice requirements of 26 U.S.C. § 7425 (b); therefore, that the federal tax lien was eliminated upon forfeiture of the land sales contract.”

Tkb Int'l, Inc. v. United States of Am., Tkb Int'l, Inc. v. United States, 995 F.2d 1460 (9th Cir. 1993). · cites it 5× “sale was given to the United States as required under 26 U.S.C. § 7425 (b). After the sale, the IRS seized the Property in satisfaction of the tax liens against Creative Ways.”

William Little v. United States, 794 F.2d 484 (9th Cir. 1986). · cites it 8× “more than 30 days before such sale and the United States is not given [written] notice [at least 25 days prior to] such sale____” 26 U.S.C. § 7425 (b)(1). Both the First Trust Deed and Second Trust Deed foreclosures and sales at issue here were such non-judicial sales.”

Fox v. Moultrie, 666 S.E.2d 915 (S.C. 2008). · cites it 5× “26 U.S.C.A. § 7425 (b)(1) (2002). However, in section 6323, entitled, “Validity and priority against certain persons,” the federal government has provided ten instances where federal liens are subordinated in priority against certain persons, even where the United States has…”

Peterson v. United States, 511 F. Supp. 250 (D. Utah 1981). · cites it 7× “Under 26 U.S.C. § 7425 (d), if a nonjudicial sale of property subject to a federal tax lien is held to satisfy a lien prior to that of the United States, the United States *258 retains a right of redemption arising under federal law.”

Joseph E. Simon & John P. Simon v. United States, 756 F.2d 696 (9th Cir. 1985). · cites it 4× “The county tax collector did not provide written notice of the sale to the Secretary of the Treasury or his delegate as required by 26 U.S.C. § 7425 (c)(1) (1976). Thus, the property was sold without disturbing the federal tax lien to which it was subject.”

John E. Tompkins, as of the Last Will & Testament of Steven M. Tompkins, Deceased v. The United States of Am. & Internal Revenue Serv., 946 F.2d 817 (11th Cir. 1991). · cites it 5× “Although the sale was publicly advertised according to Georgia law, the IRS received no specific, individualized notification as defined in Section 7425 of the Internal Revenue Code, 26 U.S.C.A. § 7425 (c)(1). Both parties agree that one of the consequences of this oversight was…”

United States v. Carlin, 948 F. Supp. 271 (S.D.N.Y. 1996). · cites it 5× “Once a Ken is imposed, the sale of any property on which the United States has such a Ken is subject to notice requirements set forth in 26 U.S.C. § 7425 (c)(1). Notice of sale must be given in writing, by registered or certified mail or by personal service, not less than 25…”

Show all 126 citing cases →

— 26 U.S.C. § 7425(b) — 1 case

Black v. United States, 683 F. Supp. 770 (N.D. Ala. 1987).

— 26 U.S.C. § 7425(b)(1) — 1 case

Great N. Energy, Inc. v. Circle Ridge Prod., Inc. (Tex. Crim. App. 2016).

— 26 U.S.C. § 7425(b)(1)(c)(1) — 1 case

Great N. Energy, Inc. v. Circle Ridge Prod., Inc. (Tex. Crim. App. 2016).

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