27 CFR 70.231 - Protection for certain interests even though notice filed.

§ 70.231 Protection for certain interests even though notice filed.
(a) Securities. Even though a notice of a lien imposed by 26 U.S.C. 6321 is filed in accordance with § 70.148 of this part, the lien is not valid with respect to a security (as defined in § 70.143(d) of this part) against:
(1) A purchaser (as defined in § 70.143(f) of this part) of the security who at the time of purchase did not have actual notice or knowledge (as defined in § 70.144(a) of this part) of the existence of the lien;
(2) A holder of a security interest (as defined in § 70.143(a) of this part) in the security who did not have actual notice or knowledge (as defined in § 70.144(a) of this part) of the existence of the lien at the time the security interest came into existence or at the time such security interest was acquired from a previous holder for a consideration in money or money's worth (as defined in § 70.143(a) of this part); or
(3) A transferee of an interest protected under paragraph (a) (1) or (2) of this section to the same extent the lien is invalid against the transferor to the transferee. For purposes of this paragraph, no person can improve that person's position with respect to the lien by reacquiring the interest from an intervening purchaser or holder of a security interest against whom the lien is invalid.
(b) Motor vehicles—
(1) In general. Even though a notice of a lien imposed by 26 U.S.C. 6321 is filed in accordance with § 70.148 of this part, the lien is not valid against a purchaser (as defined in § 70.143(f) of this part) of a motor vehicle (as defined in § 70.143(c) of this part) if:
(i) At the time of purchase, the purchaser did not have actual notice or knowledge (as defined in § 70.144(a) of this part) of the existence of the lien, and
(ii) Before the purchaser obtains such notice or knowledge, the purchaser has acquired actual possession of the motor vehicle and has not thereafter relinquished actual possession to the seller or seller's agent.
(2) Cross reference. For provisions relating to additional circumstances in which the lien imposed by 26 U.S.C. 6321 may not be valid against the purchaser of tangible personal property (including a motor vehicle) purchased at retail, see paragraph (c) of this section.
(c) Personal property purchased at retail—
(1) In general. Even though a notice of a lien imposed by 26 U.S.C. 6321 is filed (with respect to any tax imposed under the provisions of 26 U.S.C. enforced and administered by the Bureau) in accordance with § 70.148 of this part, the lien is not valid against a purchaser (as defined in § 70.143(f) of this part) of tangible personal property purchased at a retail sale (as defined in paragraph (c)(2) of this section) unless at the time of purchase the purchaser intends the purchase to (or knows that the purchase will) hinder, evade, or defeat the collection of any tax imposed by the provisions of 26 U.S.C. enforced and administered by the Bureau.
(2) Definition of retail sale. For purposes of paragraph (c) of this section, the term “retail sale” means a sale, made in the ordinary course of the seller's trade or business, of tangible personal property of which the seller is the owner. Such term includes a sale in customary retail quantities by a seller who is going out of business, but does not include a bulk sale or an auction sale in which goods are offered in quantities substantially greater than are customary in the ordinary course of the seller's trade or business or an auction sale of goods the owner of which is not in the business of selling such goods.
(d) Personal property purchased in casual sale—
(1) In general. Even though a notice of a lien imposed by 26 U.S.C. 6321 is filed in accordance with § 70.148 of this part, the lien is not valid against a purchaser (as defined in § 70.143(f) of this part) of household goods, personal effects, or other tangible personal property of a type described in § 70.241 of this part (which includes wearing apparel, school books, fuel, provisions, furniture, arms for personal use, livestock, and poultry (whether or not the seller is the head of a family); and books and tools of a trade, business, or profession (whether or not the trade, business, or profession of the seller)), purchased, other than for resale, in a casual sale for less than $250 (excluding interest and expenses described in § 70.147 of this part). For purposes of this paragraph, a casual sale is a sale not made in the ordinary course of the seller's trade or business.
(2) Limitation. This paragraph applies only if the purchaser does not have actual notice or knowledge (as defined in § 70.144(a) of this part):
(i) Of the existence of the tax lien, or
(ii) That the sale is one of a series of sales.
For purposes of paragraph (d)(2)(ii) of this section, a sale is one of a series of sales if the seller plans to dispose of, in separate transactions, substantially all of the seller's household goods, personal effects, and other tangible personal property described in § 70.241 of this part.
(e) Personal property subject to possessory liens. Even though a notice of a lien imposed by 26 U.S.C. 6321 is filed in accordance with § 70.148 of this part, the lien is not valid against a holder of a lien on tangible personal property which under local law secures the reasonable price of the repair or improvement of the property if the property is, and has been, continuously in the possession of the holder of the lien from the time the possessory lien arose. For example, if local law gives an automobile mechanic the right to retain possession of an automobile the mechanic has repaired as security for payment of the repair bill and the mechanic retains continuous possession of the automobile until such lien is satisfied, a tax lien filed in accordance with 26 U.S.C 6323(f)(1) which has attached to the automobile will not be valid to the extent of the reasonable price of the repairs. It is immaterial that the notice of tax lien was filed before the mechanic undertook the work or that the mechanic knew of the lien before undertaking the work.
(f) Real property tax and special assessment liens. Even though a notice of a lien imposed by 26 U.S.C. 6321 is filed in accordance with § 70.148 of this part, the lien is not valid against the holder of another lien upon the real property (regardless of when such other lien arises), if such other lien is entitled under local law to priority over security interests in real property which are prior in time and if such other lien on real property secures payment of:
(1) A tax of general application levied by any taxing authority based upon the value of the property, or
(2) A special assessment imposed directly upon the property by any taxing authority, if the assessment is imposed for the purpose of defraying the cost of any public improvement; or
(3) Charges for utilities or public services furnished to the property by the United States, a State or political subdivision thereof, or an instrumentality of any one or more of the foregoing.
(g) Residential property subject to a mechanic's lien for certain repairs and improvements. Even though a notice of lien imposed by 26 U.S.C. 6321 is filed in accordance with § 70.148 of this part, the lien is not valid against a mechanic's lienor (as defined in § 70.143(b) of this part) who holds a lien for the repair or improvement of a personal residence if:
(1) The residence is occupied by the owner and contains no more than four dwelling units, and
(2) The contract price on the prime contract with the owner for the repair or improvement (excluding interest and expenses described in § 70.147 of this part) is not more than $1,000. For purposes of this paragraph, the amounts of subcontracts under the prime contract with the owner are not to be taken into consideration for purposes of computing the $1,000 prime contract price. It is immaterial that the notice of tax lien was filed before the contractor undertakes the work or that the contractor knew of the lien before undertaking the work.
(h) Attorney's liens—
(1) In general. Even though notice of a lien imposed by 26 U.S.C. 6321 is filed in accordance with § 70.148 of this part, the lien is not valid against an attorney who, under local law, holds a lien upon, or a contract enforceable against, a judgment or other amount in settlement of a claim or of a cause of action. The priority afforded an attorney's lien under this paragraph shall not exceed the amount of the attorney's reasonable compensation for obtaining the judgment or procuring the settlement. For purposes of this paragraph, reasonable compensation means the amount customarily allowed under local law for an attorney's service for litigating or settling a similar case or administrative claim. However, reasonable compensation shall be determined on the basis of the facts and circumstances of each individual case. It is immaterial that the notice of tax lien is filed before the attorney undertakes the work or that the attorney knows of the tax lien before undertaking the work. This paragraph does not apply to an attorney's lien which may arise from the defense of a claim or cause of action against a taxpayer except to the extent such lien is held upon a judgment or other amount arising from the adjudication or settlement of a counterclaim in favor of the taxpayer. In case of suits against the taxpayer, see § 70.150(d)(2) of this part for rules relating to the subordination of the tax lien to facilitate tax collection.
(2) Claim or cause of action against the United States. Paragraph (h)(1) of this section does not apply to an attorney's lien with respect to:
(i) Any judgment or other fund resulting from the successful litigation or settlement of an administrative claim or cause of action against the United States to the extent that the United States, under any legal or equitable right, offsets its liability under the judgment or settlement against any liability of the taxpayer to the United States, or
(ii) Any amount credited against any liability of the taxpayer in accordance with 26 U.S.C. 6402.
(i) Certain insurance contracts. Even though a notice of a lien imposed by 26 U.S.C. 6321 (with respect to any tax imposed under the provisions of 26 U.S.C. enforced and administered by the Bureau) is filed in accordance with § 70.148 of this part, the lien is not valid with respect to a life insurance, endowment, or annuity contract, against an organization which is the insurer under the contract, at any time:
(1) Before the insuring organization has actual notice or knowledge (as defined in § 70.144(a) of this part) of the existence of the tax lien.
(2) After the insuring organization has actual notice or knowledge of the lien (as defined in § 70.144(a) of this part) with respect to advances (including contractual interest thereon as provided in § 70.147(a) of this part) required to be made automatically to maintain the contract in force under an agreement entered into before the insuring organization had such actual notice or knowledge, or
(3) After the satisfaction of a levy pursuant to 26 U.S.C. 6332(b), unless and until the appropriate TTB officer delivers to the insuring organization a notice (for example, another notice of levy, a letter, etc.), executed after the date of such satisfaction, that the lien exists.
Delivery of the notice described in paragraph (i)(3) of this section may be made by any means, including regular mail, and delivery of the notice shall be effective only from the time of actual receipt of the notification by the insuring organization. The provisions of this paragraph are applicable to matured as well as unmatured insurance contracts.
(j) Passbook loans—
(1) In general. Even though a notice of a lien imposed by 26 U.S.C. 6321 is filed in accordance with § 70.148 of this part, the lien is not valid against an institution described in 26 U.S.C. 581 or 591 to the extent of any loan made by the institution which is secured by a savings deposit, share, or other account evidenced by a passbook (as defined in paragraph (j)(2) of this section) if the institution has been continuously in possession of the passbook from the time the loan is made. This paragraph applies only to a loan made without actual notice or knowledge (as defined in § 70.144(a) of this part) of the existence of the lien. Even though an original passbook loan is made without actual notice or knowledge of the existence of the lien, this paragraph does not apply to any additional loan made after knowledge of the lien is acquired by the institution even if it continues to retain the passbook from the time the original passbook loan is made.
(2) Definition of passbook. For purposes of paragraph (j) of this section, the term “passbook” includes:
(i) Any tangible evidence of a savings deposit, share, or other account which, when in the possession of the bank or other savings institution, will prevent a withdrawal from the account to the extent of the loan balance, and
(ii) Any procedure or system, such as an automatic data processing system, the use of which by the bank or other savings institution will prevent a withdrawal from the account to the extent of the loan balance.

Title 27 published on 2014-04-01

no entries appear in the Federal Register after this date.

This is a list of United States Code sections, Statutes at Large, Public Laws, and Presidential Documents, which provide rulemaking authority for this CFR Part.

This list is taken from the Parallel Table of Authorities and Rules provided by GPO [Government Printing Office].

It is not guaranteed to be accurate or up-to-date, though we do refresh the database weekly. More limitations on accuracy are described at the GPO site.


United States Code
U.S. Code: Title 5 - GOVERNMENT ORGANIZATION AND EMPLOYEES
U.S. Code: Title 26 - INTERNAL REVENUE CODE

§ 4181 - Imposition of tax

§ 4182 - Exemptions

§ 5123 - Preservation and inspection of records, and entry of premises for inspection

§ 5203 - Entry and examination of premises

§ 5207 - Records and reports

§ 5275 - Records and reports

§ 5367 - Records

§ 5415 - Records and returns

§ 5504 - Operation

§ 5555 - Records, statements, and returns

§ 5684 - Penalties relating to the payment and collection of liquor taxes

§ 5741 - Records to be maintained

§ 5761 - Civil penalties

§ 5802 - Registration of importers, manufacturers, and dealers

§ 6020 - Returns prepared for or executed by Secretary

§ 6021 - Listing by Secretary of taxable objects owned by nonresidents of internal revenue districts

§ 6064 - Signature presumed authentic

§ 6102 - Computations on returns or other documents

§ 6155 - Payment on notice and demand

§ 6159 - Agreements for payment of tax liability in installments

§ 6201 - Assessment authority

§ 6203 - Method of assessment

§ 6204 - Supplemental assessments

§ 6301 - Collection authority

§ 6303 - Notice and demand for tax

§ 6311 - Payment of tax by commercially acceptable means

§ 6313 - Fractional parts of a cent

§ 6314 - Receipt for taxes

§ 6321 - Lien for taxes

§ 6323 - Validity and priority against certain persons

§ 6325 - Release of lien or discharge of property

§ 6326 - Administrative appeal of liens

§ 6331 - Levy and distraint

§ 6332 - Surrender of property subject to levy

§ 6333 - Production of books

§ 6334 - Property exempt from levy

§ 6335 - Sale of seized property

§ 6336 - Sale of perishable goods

§ 6337 - Redemption of property

§ 6338 - Certificate of sale; deed of real property

§ 6339 - Legal effect of certificate of sale of personal property and deed of real property

§ 6340 - Records of sale

§ 6341 - Expense of levy and sale

§ 6342 - Application of proceeds of levy

§ 6343 - Authority to release levy and return property

§ 6401 - Amounts treated as overpayments

§ 6402 - Authority to make credits or refunds

§ 6403 - Overpayment of installment

§ 6404 - Abatements

§ 6407 - Date of allowance of refund or credit

§ 6416 - Certain taxes on sales and services

§ 6423 - Conditions to allowance in the case of alcohol and tobacco taxes

§ 6501 - Limitations on assessment and collection

§ 6502 - Collection after assessment

§ 6503 - Suspension of running of period of limitation

§ 6511 - Limitations on credit or refund

§ 6513 - Time return deemed filed and tax considered paid

§ 6514 - Credits or refunds after period of limitation

§ 6532 - Periods of limitation on suits

§ 6601 - Interest on underpayment, nonpayment, or extensions of time for payment, of tax

§ 6602 - Interest on erroneous refund recoverable by suit

§ 6611 - Interest on overpayments

§ 6621 - Determination of rate of interest

§ 6622 - Interest compounded daily

§ 6651 - Failure to file tax return or to pay tax

§ 6653 - Failure to pay stamp tax

§ 6656 - Failure to make deposit of taxes

§ 6657 - Bad checks

§ 6658 - Coordination with title 11

§ 6665 - Applicable rules

§ 6671 - Rules for application of assessable penalties

§ 6672 - Failure to collect and pay over tax, or attempt to evade or defeat tax

§ 6701 - Penalties for aiding and abetting understatement of tax liability

§ 6723 - Failure to comply with other information reporting requirements

§ 6801 - Authority for establishment, alteration, and distribution

§ 6862 - Jeopardy assessment of taxes other than income, estate, gift, and certain excise taxes

§ 6863 - Stay of collection of jeopardy assessments

§ 6901 - Transferred assets

§ 7011 - Registration—persons paying a special tax

§ 7101 - Form of bonds

§ 7102 - Single bond in lieu of multiple bonds

§ 7121 - Closing agreements

§ 7122 - Compromises

§ 7207 - Fraudulent returns, statements, or other documents

§ 7209 - Unauthorized use or sale of stamps

§ 7214 - Offenses by officers and employees of the United States

§ 7304 - Penalty for fraudulently claiming drawback

§ 7401 - Authorization

§ 7403 - Action to enforce lien or to subject property to payment of tax

§ 7406 - Disposition of judgments and moneys recovered

§ 7423 - Repayments to officers or employees

§ 7424 - Intervention

§ 7425 - Discharge of liens

§ 7426 - Civil actions by persons other than taxpayers

§ 7429 - Review of jeopardy levy or assessment procedures

§ 7430 - Awarding of costs and certain fees

§ 7432 - Civil damages for failure to release lien

§ 7502 - Timely mailing treated as timely filing and paying

§ 7503 - Time for performance of acts where last day falls on Saturday, Sunday, or legal holiday

§ 7505 - Sale of personal property acquired by the United States

§ 7506 - Administration of real estate acquired by the United States

§ 7513 - Reproduction of returns and other documents

§ 7601 - Canvass of districts for taxable persons and objects

§ 7602 - Examination of books and witnesses

§ 7603 - Service of summons

§ 7604 - Enforcement of summons

§ 7605 - Time and place of examination

§ 7606 - Entry of premises for examination of taxable objects

§ 7608 - Authority of internal revenue enforcement officers

§ 7609 - Special procedures for third-party summonses

§ 7610 - Fees and costs for witnesses

§ 7622 - Authority to administer oaths and certify

§ 7623 - Expenses of detection of underpayments and fraud, etc.

§ 7653 - Shipments from the United States

§ 7805 - Rules and regulations