I.R.C. § 7425(a) Judicial Proceedings —
If the United States is not joined as a party, a judgment in any civil action or
suit described in subsection (a) of section 2410 of title 28 of the United States Code, or a judicial sale pursuant to such a judgment,
with
respect to property on which the United States has or claims a lien under the provisions
of this title--
I.R.C. § 7425(a)(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
I.R.C. § 7425(a)(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.
I.R.C. § 7425(b) Other Sales —
Notwithstanding subsection (a) sale of property on which the United States has or claims a lien, or a title derived
from enforcement of a lien, under the provisions of this title, made pursuant to
an instrument creating a lien on such property, pursuant to a confession of judgment
on the obligation secured by such an instrument, or pursuant to a nonjudicial sale
under a statutory lien on such property--
I.R.C. § 7425(b)(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
I.R.C. § 7425(b)(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--
I.R.C. § 7425(b)(2)(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,
I.R.C. § 7425(b)(2)(B) —
the law makes no provision for such filing, or
I.R.C. § 7425(b)(2)(C) —
notice of such sale is given in the manner prescribed in subsection (c)(1).
I.R.C. § 7425(c) Special Rules
I.R.C. § 7425(c)(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.
I.R.C. § 7425(c)(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.
I.R.C. § 7425(c)(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.
I.R.C. § 7425(c)(4) Forfeitures Of Land Sales Contracts —
For purposes of subsection (b), a sale of property includes any forfeiture of a land sales contract.
I.R.C. § 7425(d) Redemption By United States
I.R.C. § 7425(d)(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.
I.R.C. § 7425(d)(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.
I.R.C. § 7425(d)(3) Certificate Of Redemption
I.R.C. § 7425(d)(3)(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.
I.R.C. § 7425(d)(3)(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.
I.R.C. § 7425(d)(3)(C) Effect —
A certificate of redemption executed by the Secretary shall constitute prima facie
evidence of the regularity of such redemption and shall, when recorded, transfer
to the United States all the rights, title, and interest in and to such property
acquired by the person from whom the United States redeems such property by virtue
of the sale of such property.
(Added Pub. L. 89-719, title I, 109, Nov. 2, 1966, 80 Stat. 1141, and 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.)
Background Notes
Prior Provisions
A prior section 7425 was renumbered 7434.
Amendments
1986--Subsec. (c)(4). Pub. L. 99-514 added par. (4).
1976--Pub. L. 94-455 struck out “or his delegate” after “Secretary” wherever appearing.
Effective Date of 1986 Amendment
Section 1572(b) of Pub. L. 99-514 provided that: “The amendment made by subsection
(a) [amending this section] shall apply to forfeitures after the 30th day after the
date of the enactment of this Act [Oct. 22, 1986].”
Effective Date
Section applicable after Nov. 2, 1966, regardless of when the title or lien of the
United States arose or when the lien or interest of another person was acquired, with
certain exceptions, see section 114(a)-(c) of Pub. L. 89-719, set out as an Effective Date of 1966 Amendment note under section 6323 of this title.
Section Referred to in Other Sections
This section is referred to in section 7810 of this title; title 18 section 3613;
title 28 section 2409a.