26 U.S.C. § 6332 : US Code - Section 6332: Surrender of property subject to levy

Search 26 U.S.C. § 6332 : US Code - Section 6332: Surrender of property subject to levy

(a) Requirement
Except as otherwise provided in this section, any person in
possession of (or obligated with respect to) property or rights to
property subject to levy upon which a levy has been made shall,
upon demand of the Secretary, surrender such property or rights (or
discharge such obligation) to the Secretary, except such part of
the property or rights as is, at the time of such demand, subject
to an attachment or execution under any judicial process.
(b) Special rule for life insurance and endowment contracts
(1) In general
A levy on an organization with respect to a life insurance or
endowment contract issued by such organization shall, without
necessity for the surrender of the contract document, constitute
a demand by the Secretary for payment of the amount described in
paragraph (2) and the exercise of the right of the person against
whom the tax is assessed to the advance of such amount. Such
organization shall pay over such amount 90 days after service of
notice of levy. Such notice shall include a certification by the
Secretary that a copy of such notice has been mailed to the
person against whom the tax is assessed at his last known
address.
(2) Satisfaction of levy
Such levy shall be deemed to be satisfied if such organization
pays over to the Secretary the amount which the person against
whom the tax is assessed could have had advanced to him by such
organization on the date prescribed in paragraph (1) for the
satisfaction of such levy, increased by the amount of any advance
(including contractual interest thereon) made to such person on
or after the date such organization had actual notice or
knowledge (within the meaning of section 6323(i)(1)) of the
existence of the lien with respect to which such levy is made,
other than an advance (including contractual interest thereon)
made automatically to maintain such contract in force under an
agreement entered into before such organization had such notice
or knowledge.
(3) Enforcement proceedings
The satisfaction of a levy under paragraph (2) shall be without
prejudice to any civil action for the enforcement of any lien
imposed by this title with respect to such contract.
(c) Special rule for banks
Any bank (as defined in section 408(n)) shall surrender (subject
to an attachment or execution under judicial process) any deposits
(including interest thereon) in such bank only after 21 days after
service of levy.
(d) Enforcement of levy
(1) Extent of personal liability
Any person who fails or refuses to surrender any property or
rights to property, subject to levy, upon demand by the
Secretary, shall be liable in his own person and estate to the
United States in a sum equal to the value of the property or
rights not so surrendered, but not exceeding the amount of taxes
for the collection of which such levy has been made, together
with costs and interest on such sum at the underpayment rate
established under section 6621 from the date of such levy (or, in
the case of a levy described in section 6331(d)(3), from the date
such person would otherwise have been obligated to pay over such
amounts to the taxpayer). Any amount (other than costs) recovered
under this paragraph shall be credited against the tax liability
for the collection of which such levy was made.
(2) Penalty for violation
In addition to the personal liability imposed by paragraph (1),
if any person required to surrender property or rights to
property fails or refuses to surrender such property or rights to
property without reasonable cause, such person shall be liable
for a penalty equal to 50 percent of the amount recoverable under
paragraph (1). No part of such penalty shall be credited against
the tax liability for the collection of which such levy was made.
(e) Effect of honoring levy
Any person in possession of (or obligated with respect to)
property or rights to property subject to levy upon which a levy
has been made who, upon demand by the Secretary, surrenders such
property or rights to property (or discharges such obligation) to
the Secretary (or who pays a liability under subsection (d)(1))
shall be discharged from any obligation or liability to the
delinquent taxpayer and any other person with respect to such
property or rights to property arising from such surrender or
payment.
(f) Person defined
The term "person," as used in subsection (a), includes an officer
or employee of a corporation or a member or employee of a
partnership, who as such officer, employee, or member is under a
duty to surrender the property or rights to property, or to
discharge the obligation.