ing of such notice in an office within the State or Territory; or

Sec. 3672. (c) (3) With clerk of district court of the United States for the District of Columbia. In the office of the clerk of the District Court of the United States for the District of Columbia, if the property subject to the lien is situated in the District of Columbia.

Sec. 3672. (b) (1) Exception in case of securities. Even though notice of a lien provided in section 3670 has been filed in the manner prescribed in subsection (a) of this section, or notice of a lien provided in section 3186 of the Revised Statutes, as amended, has been filed in the manner prescribed in such section or 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.

Sec. 3672. (b) (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.

Sec. 3672. (b) (3) Applicability of subsection.— Except where the lien has been enforced by a proceeding, suit, or civil action which has become final before the date of enactment of the Revenue Act of 1939, this subsection shall apply regardless of the time when the mortgage, pledge, or purchase was made or the lien arose.

Sec. 3673. Release of lien.

Subject to such regulations as the Commissioner, with the approval of the Secretary, may prescribe, the collector charged with an assessment in respect of any tax, may issue a certificate of release of the lien if

Sec. 3673. (a) Liability satisfied or unenforceable. The collector finds that the liability for the amount assessed, together with all interest in respect thereof, has been satisfied or has become unenforceable by reason of lapse of time; or

Sec. 3673. (b) Bond accepted.-There is furnished to the collector 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 in the regulations.

Sec. 3674. Partial discharge of property.

Sec. 3674. (a) Property double the amount of the liability.-Subject to such regulations as the Commissioner, with the approval of the Secretary, may prescribe, the collector charged with an assessment in respect of any tax may issue a certificate of partial discharge of any part of the property subject to the lien if the collector 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 liability remaining unsatisfied in respect of such tax and the amount of all prior liens upon such property.

Sec. 3674. (b) Part payment.-Subject to such regulations as the Commissioner, with the approval of the Secretary, may prescribe, the collector charged with an assessment in respect of any tax may issue a certificate of discharge of any part of the property subject to the lien if there is paid over to the collector in part satisfaction of the liability in respect of such tax an amount determined by the Commissioner, which shall not be less than the value, as determined by him, of the interest of the United States in the part to be so discharged. In determining such value the Commissioner shall give consideration to the fair market value of the part to be so discharged and to such liens thereon as have priority to the lien of the United States.

Sec. 3675. Effect of certificates of release or partial discharge.

A certificate of release or of partial discharge issued under this subchapter shall be held conclusive that the lien upon the property covered by the certificate is extinguished.

Sec. 3676. Single bond covering release of lien and payment of income tax deficiency.

The Commissioner, with the approval of the Secretary, may by regulation provide for the acceptance of a single bond complying both with the requirements of section 272 (j) (relating to the extension of time for the payment of a deficiency) and the requirements of subsection (b) of section 3673.

Sec. 3677. Extended application of provisions relating to release or partial discharge.

Sections 3673, 3674, 3675, and 3676 shall apply to a lien in respect of any internal revenue tax, whether or not the lien is imposed by this subchapter.

Sec. 3678. Civil action to enforce lien on property.

Sec. 3678. (a) Filing.-In any case where there has been a refusal or neglect to pay any tax, and it has become necessary to seize and sell property and rights to property, whether real or personal, to satisfy the same, whether distraint proceedings have been commenced or not, the Attorney General at the request of the Commissioner may direct a civil action to be filed, in a district court of the United

States, to enforce the lien of the United States for tax upon any property and rights to property, whether real or personal, or to subject any such property and rights to property owned by the delinquent, or in which he has any right, title, or interest, to the payment of such tax.

Sec. 3678. (b) Parties to proceedings.-All persons having liens upon or claiming any interest in the property or rights to property sought to be subjected as aforesaid shall be made parties to such proceedings and be brought into court.

Sec. 3678. (c) Adjudication and decree.-The said court shall, at the term next after the parties have been duly notified of the proceedings, unless otherwise ordered by the court, proceed to adjudicate all matters involved therein and finally determine the merits of all claims to and liens upon the property and rights to property in question, and, in all cases where a claim or interest of the United States therein is established, may decree a sale of such property and rights to property, by the proper officer of the court, and a distribution of the proceeds of such sale according to the findings of the court in respect to the interests of the parties and of the United States.

Sec. 3678. (d) Receivership.-In any such proceeding, at the instance of the United States, the court may appoint a receiver to enforce the lien, or, upon certification by the Commissioner during the pendency of such proceedings that it is in the public interest, may appoint a receiver with all the powers of a receiver in equity.

Sec. 3679. Civil action to clear title to realty.

Sec. 3679. (a) Obtaining leave to file

Sec. 3679. (a) (1) Request for institution of proceedings by United States.-Any person having a lien upon or any interest in the real estate referred to in section 3678, notice of which has been duly filed of record in the jurisdiction in which the real estate is located, prior to the filing of notice of the lien of the United States as provided in section 3672, or any person purchasing the real estate at a sale to satisfy such prior lien or interest, may make

written request to the Commissioner to authorize the filing of a civil action as provided in section 3678.

Sec. 3679. (a) (2) Petition to court.-If the Commissioner fails to authorize the filing of such civil action within six months after receipt of such written request, such person or purchaser may, after giving notice to the Commissioner, file a petition in the district court of the United States for the district in which the real estate is located, praying leave to file a civil action for a final determination of all claims to or liens upon the real estate in question.

Sec. 3679. (a) (3) Court order.-After a full hearing in open court, the district court may in its discretion enter an order granting leave to file such civil action, in which the United States and all persons having liens upon or claiming any interest in the real estate shall be made parties.

Sec. 3679. (b) Service on United States.-Service on the United States shall be had in the manner provided by sections 5 and 6 of the Act of March 3, 1887, entitled "An Act to provide for the bringing of suits against the Government of the United States", c. 359, 24 Stat. 506 (U. S. C., Title 28, §§ 762, 763), as amended.

Sec. 3679. (c) Adjudication.-Upon the filing of such civil action the district court shall proceed to adjudicate the matters involved therein, in the same manner as in the case of civil actions filed under section 3678. For the purpose of such adjudication, the assessment of the tax upon which the lien of the United States is based shall be conclusively presumed to be valid.

Sec. 3679. (d) Costs.-All costs of the proceedings on the petition and the civil action shall be borne by the person filing the civil action.

Sec. 3680. Cross references.

For lien in case of

Estate tax, see section 827.

For provisions permitting the United States to be made party defendant in a proceeding in a State court for the foreclosure of a lien upon real estate where the United States may have a claim upon the premises involved, see Act of March 4, 1931, c. 515, 46 Stat. 1528 (U. S. C., Title 28, §§ 901-906).

PART I-DISTRAINT ON PERSONAL PROPERTY

Sec. 3690. Authority to distrain. If any person liable to pay any taxes neglects or refuses to pay the same within ten days after notice and demand, it shall be lawful for the collector or his deputy to collect the said taxes, with such interest and other additional amounts as are required by law, by distraint and sale, in the manner provided in this subchapter, of the goods, chattels, or effects, including stocks, securities, bank accounts, and evidences of debt, of the person delinquent as aforesaid.

Sec. 3691. Property exempt from distraint.

Sec. 3691. (a) Enumeration.-There shall be ex

empt from distraint and sale, if belonging to the head of a family

Sec. 3691. (a) (1) School books and wearing apparel.-The school books and wearing apparel necessary for such family; also

Sec. 3691. (a) (2) Arms.—Arms for personal use;

Sec. 3691. (a) (3) Livestock.-One cow, 2 hogs, 5 sheep and the wool thereof, provided the aggregate market value of said sheep shall not exceed $50;

Sec. 3691. (a) (4) Fodder.-The necessary food for such cow, hogs, and sheep, for a period not exceeding thirty days;

Sec. 3691. (a) (5) Fuel.-Fuel to an amount not greater in value than $25;

Sec. 3691. (a) (6) Provisions.-Provisions to an amount not greater than $50;

Sec. 3691. (a) (7) Household furniture.-Household furniture kept for use to an amount not greater than $300; and

Sec. 3691. (a) (8) Books and tools of trade or profession. The books, tools, or implements, of a trade or profession, to an amount not greater than $100.

Sec. 3691. (b) Appraisal.-The officer making the distraint shall summon three disinterested householders of the vicinity, who shall appraise and set apart to the owner the amount of property herein declared to be exempt.

Sec. 3692. Levy.

In case of neglect or refusal under section 3690, the collector may levy, or by warrant may authorize a deputy collector to levy, upon all property and rights to property, except such as are exempt by the preceding section, belonging to such person, or on which the lien provided in section 3670 exists, for the payment of the sum due, with interest and penalty for nonpayment, and also of such further sum as shall be sufficient for the fees, costs, and expenses of such levy.

Sec. 3693. Proceedings on distraint.

When distraint is made, as provided in section 3690

Sec. 3693. (a) Account and notice to owner.The officer charged with the collection shall make or cause to be made an account of the goods or effects distrained, a copy of which, signed by the officer making such distraint, shall be left with the owner or possessor of such goods or effects, or at his dwelling or usual place of business, with some person of suitable age and discretion, if any such can be found, with a note of the sum demanded and the time and place of sale; and

Sec. 3693. (b) Public notice.-Forthwith cause a notification to be published in some newspaper within the county wherein said distraint is made, if a newspaper is published in said county, or to be publicly posted at the post office, if there be one within five miles nearest to the residence of the person whose property shall be distrained, and in not less than two other public places. Such notice shall specify the articles distrained, and the time and place for the sale thereof.

Sec. 3693. (c) Time and place of sale.-The time of sale shall not be less than ten nor more than twenty days from the date of such notification to the owner or possessor of the property and the publication or posting of such notice as provided in subsection (b) and the place proposed for the sale shall not be more than five miles distant from the place of making such distraint.

Sec. 3693. (d) Adjournment of sale.-Said sale may be adjourned from time to time by said officer,

if he deems it advisable, but not for a time to exceed in all thirty days.

Sec. 3694. Priority of specific tax liability on distrained property.

When property subject to tax, but upon which the tax has not been paid, is seized upon distraint and sold, the amount of such tax shall, after deducting the expenses of such sale, be first appropriated out of the proceeds thereof to the payment of the tax. And if no assessment of such tax has been made upon such property, the collector shall make a return thereof in the form required by law, and the Commissioner shall assess the tax thereon.

Sec. 3695. Property for account of the United States.

Sec. 3695. (a) Purchase.-When any personal property is advertised for sale under distraint as aforesaid, the officer making the seizure shall proceed to sell such property at a public auction, offering the same at a minimum price, including the expenses of making the levy and of advertising the sale, and if the amount bid for such property at the sale is not equal to the minimum price so fixed, the officer conducting the sale may declare the same to be purchased by him for the United States.

Sec. 3695. (b) Sale.-The property so purchased may be sold by the collector within whose district the sale was made under such regulations as may be prescribed by the Commissioner, with the approval of the Secretary.

Sec. 3695. (c) Accounting.-The collector shall render to the Commissioner a distinct account of all charges incurred in such sales, and, in case of resale, shall pay into the Treasury the proceeds as provided in section 3971.

Sec. 3696. Redemption of property.

In any case of distraint for the payment of taxes, the goods, chattels, or effects so distrained shall be restored to the owner or possessor, if, prior to the sale, payment of the amount due is made to the proper officer charged with the collection, together with the fees and other charges; but in case of nonpayment, the said officer shall proceed to sell the said goods, chattels, or effects at public auction.

Sec. 3697. Certificates of sale.

In all cases of sale, as aforesaid, the certificate of such sale

Sec. 3697. (a) As evidence.-Shall be prima facie evidence of the right of the officer to make such sale, and conclusive evidence of the regularity of his proceedings in making the sale; and

Sec. 3697. (b) As conveyances.-Shall transfer to the purchaser all right, title, and interest of such delinquent in and to the property sold; and

Sec. 3697. (c) As authority for transfer of corporation stock.-Where such property consists of stocks, shall be notice, when received, to any corporation, company, or association of said transfer, and shall be authority to such corporation, company, or association to record the transfer on their books and

records in the same manner as if the stocks were transferred or assigned by the party holding the same, in lieu of any original or prior certificates, which shall be void, whether canceled or not; and

Sec. 3697. (d) As receipts.-Where the subject of sale is securities or other evidences of debt, shall be a good and valid receipt to the person holding the same, as against any person holding, or claiming to hold, possession of such securities or other evidences of debt.

Sec. 3698. Cross references.

For provisions relating to

Production of books, see section 3711.

Sale of indivisible property, see section 3712. Stamps, marks, and brands, see section 3725.

PART II-DISTRAINT ON REAL ESTATE

Sec. 3700. Authority to distrain. When goods, chattels, or effects sufficient to satisfy the taxes imposed upon any person are not found by the collector or deputy collector, he is authorized to collect the same by seizure and sale of real estate.

Sec. 3701. Proceedings on distraint.

Sec. 3701. (a) Notice to owner.-The officer making the seizure mentioned in the preceding section shall give notice to the person whose estate it is proposed to sell by giving him in hand, or leaving at his last or usual place of abode, if he has any such within the collection district where said estate is situated, a notice, in writing, stating what particular estate is to be sold, describing the same with reasonable certainty, and the time when and place where said officer proposes to sell the same.

Sec. 3701. (b) Public notice.-The said officer shall also cause a notification to the same effect to be published in some newspaper within the county where such seizure is made, if any such there be, and shall also cause a like notice to be posted at the post office nearest to the estate seized, and in two other public places within the county.

Sec. 3701. (c) Time and place of sale.-The time of sale shall not be less than twenty nor more than forty days from the time of giving said notice. The place of said sale shall not be more than five miles distant from the estate seized, except by special order of the Commissioner.

Sec. 3701. (d) Manner of sale.-At the time and place appointed, the officer making such seizure shall proceed to sell the said estate at public auction, offering the same at a minimum price, including the expense of making such levy, and all charges for advertising. When the real estate so seized consists of several distinct tracts or parcels, the officer making sale thereof shall offer each tract or parcel for sale separately, and shall, if he deem it advisable, apportion the expenses and charges aforesaid to such several tracts or parcels, or to any of them, in estimating the minimum price.

Sec. 3701. (e) Purchasers.-If no person offers for said estate the amount of said minimum price,

the officer shall declare the same to be purchased by him for the United States; otherwise the same shall be declared to be sold to the highest bidder.

Sec. 3701. (f) Adjournment of sale.-The said sale may be adjourned from time to time by said officer for not exceeding thirty days in all, if he shall think it advisable so to do. If the amount bid shall not be then and there paid, the officer shall forthwith proceed to again sell said estate in the

same manner.

Sec. 3702. Redemption of real estate.

Sec. 3702. (a) Before sale.-Any person whose estate may be proceeded against as aforesaid shall have the right to pay the amount due, together with the costs and charges thereon, to the collector or deputy collector at any time prior to the sale thereof, and all further proceedings shall cease from the time of such payment.

Sec. 3702. (b) After sale.—

Sec. 3702. (b) (1) Period.-The owners of any real estate sold as aforesaid, their heirs, executors, or administrators, or any person having any interest therein, or a lien thereon, or any person in their behalf, shall be permitted to redeem the land sold, or any particular tract thereof, at any time within one year after the sale thereof.

Sec. 3702. (b) (2) Price.-The land or tract aforesaid shall be permitted to be redeemed upon payment to the purchaser, or in case he can not be found in the county in which the land to be redeemed is situated, then to the collector of the district in which the land is situated, for the use of the purchaser, his heirs, or assigns, the amount paid by the said purchaser and interest thereon at the rate of 20 per centum per annum.

Sec. 3702. (c) Record.-When any lands sold are redeemed as provided in this section, the collector shall make entry of the fact upon the record mentioned in section 3706, and the said entry shall be evidence of such redemption.

Sec. 3703. Certificates of purchase.

Sec. 3703. (a) Real estate purchased by the United States.-In case the real estate sold under section 3701 shall be declared to be purchased for the United States, the officer shall immediately transmit a certificate of the purchase to the Commissioner.

Sec. 3703. (b) Real estate purchased by others. -Upon any sale of real estate, as provided in section 3701, and the payment of the purchase money, the officer making the seizure and sale shall give to the purchaser a certificate of purchase, which shall set forth the real estate purchased, for whose taxes the same was sold, the name of the purchaser, and the price paid therefor.

Sec. 3704. Deeds of sale.

Sec. 3704. (a) Real estate purchased by the United States.-In case real estate shall be declared

under section 3701 (e) to be purchased for the United States, the officer shall

Sec. 3704. (a) (1) Execution.-At the proper time, as provided in subsection (b), execute a deed therefor after its preparation and the endorsement of approval as to its form by the United States district attorney for the district in which the property is situate, and

Sec. 3704. (a) (2) Record and transmission.— Without delay cause the same to be duly recorded in the proper registry of deeds, and immediately thereafter transmit such deed to the Commissioner.

Sec. 3704. (b) Real estate purchased by others. -If the said real estate be not redeemed in the manner and within the time provided in section 3702, the said collector or deputy collector shall execute to the said purchaser, upon his surrender of said certificate, a deed of the real estate purchased by him as aforesaid, reciting the facts set forth in said certificate, and in accordance with the laws of the State in which such real estate is situate upon the subject of sales of real estate under execution.

Sec. 3704. (c) Legal effect.

Sec. 3704. (c) (1) As evidence.-The deed of sale given in pursuance of this section shall be prima facie evidence of the facts therein stated; and

Sec. 3704. (c) (2) As conveyance of title.-If the proceedings of the officer as set forth have been substantially in accordance with the provisions of law, such deed shall be considered and operate as a conveyance of all the right, title, and interest the party delinquent had in and to the real estate thus sold at the time the lien of the United States attached thereto.

Sec. 3705. Transmission of certificates and deeds to Commissioner.

All certificates of purchase, and deeds of property purchased by the United States under the internal revenue laws, on sales for taxes, or under executions issued from United States courts, which may be found in the office of any collector, shall be immediately transmitted by such officer to the Commissioner.

Sec. 3706. Records of sale.

Sec. 3706. (a) Requirement.-It shall be the duty of every collector to keep a record of all sales of land made in his collection district, whether by himself or his deputies, or by another collector. And it shall be the duty of every deputy making sale, as aforesaid, to return a statement of all his proceedings to the collector, and to certify the record thereof.

Sec. 3706. (b) Contents.-The record shall set forth the tax for which any such sale was made, the dates of seizure and sale, the name of the party assessed and all proceedings in making said sale, the amount of fees and expenses, the name of the purchaser, and the date of the deed.

Sec. 3706. (c) Certification.-The said record shall be certified by the officer making the sale.

Sec. 3706. (d) Copy to Commissioner.-On or before the 5th day of each succeeding month, the collector shall transmit a copy of such record of the preceding month to the Commissioner.

Sec. 3706. (e) Delivery by collector to successor. -In case of the death or removal of the collector, or the expiration of his term of office from any other cause, said record shall be delivered to his successor in office.

Sec. 3706. (f) Copy as evidence.-A copy of every such record, certified by the collector, shall be evidence in any court of the truth of the facts therein stated.

Sec. 3707. Cross references.

For provisions relating to—
Levy, see section 3692.

Production of books, see section 3711.

Sale of indivisible property, see section 3712. Administration of real estate acquired by the United States, see section 3795.

PART III-GENERAL PROVISIONS

Sec. 3710. Surrender of property subject to distraint.

Sec. 3710. (a) Requirement.-Any person in possession of property, or rights to property, subject to distraint, upon which a levy has been made, shall, upon demand by the collector or deputy collector making such levy, surrender such property or rights to such collector or deputy, unless such property or right is, at the time of such demand, subject to an attachment or execution under any judicial process.

Sec. 3710. (b) Penalty for violation.-Any person who fails or refuses to so surrender any of such property or rights 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 the taxes (including penalties and interest) for the collection of which such levy has been made, together with costs and interest from the date of such levy.

Sec. 3710. (c) Person defined.-The term "person" as used in this section 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 perform the act in respect of which the violation occurs.

Sec. 3711. Production of books.

All persons, and officers of companies or corporations, are required, on demand of a collector or deputy collector about to distrain or having distrained on any property, or rights of property, to exhibit all books containing evidence or statements relating to the subject of distraint, or the property or rights of property liable to distraint for the tax due.

Sec. 3712. Sale of indivisible property.

When any property liable to distraint for taxes is not divisible, so as to enable the collector by sale