Frequently Asked Questions
Who is eligible for the Release of Seized Real Estate to Debtor?
Taxpayers whose real estate was taken by the U.S. as payment or security for a tax debt, provided they pay the debt plus 1% monthly interest within 2 years.
How does the Release of Seized Real Estate to Debtor work?
A debtor can have seized real estate released back to them if the underlying tax debt and interest are paid within 2 years of acquisition.
What law authorizes the Release of Seized Real Estate to Debtor?
The Release of Seized Real Estate to Debtor is authorized under IRC §7506(d) of the Internal Revenue Code (Title 26, United States Code).
Statutory Text — IRC §7506
Source: Internal Revenue Code, Title 26, United States Code
§ 7506. Administration of real estate acquired by the United States(a) Person charged withThe Secretary shall have charge of all real estate which is or shall become the property of the United States by judgment of forfeiture under the internal revenue laws, or which has been or shall be assigned, set off, or conveyed by purchase or otherwise to the United States in payment of debts or penalties arising under the laws relating to internal revenue, or which has been or shall be vested in the United States by mortgage or other security for the payment of such debts, or which has been redeemed by the United States, and of all trusts created for the use of the United States in payment of such debts due them.
(b) SaleThe Secretary, may, at public sale, and upon not less than 20 days’ notice, sell and dispose of any real estate owned or held by the United States as aforesaid.
(c) LeaseUntil such sale, the Secretary may lease such real estate owned as aforesaid on such terms and for such period as the Secretary shall deem proper.
(d) Release to debtorIn cases where real estate has or may become the property of the United States by conveyance or otherwise, in payment of or as security for a debt arising under the laws relating to internal revenue, and such debt shall have been paid, together with the interest thereon, at the rate of 1 percent per month, to the United States, within 2 years from the date of the acquisition of such real estate, it shall be lawful for the Secretary to release by deed or otherwise convey such real estate to the debtor from whom it was taken, or to his heirs or other legal representatives.
(Aug. 16, 1954, ch. 736, 68A Stat. 896; Pub. L. 89–719, title I, § 111(b), Nov. 2, 1966, 80 Stat. 1145; Pub. L. 94–455, title XIX, § 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834.)
Editorial Notes
Amendments1976—Subsecs. (a) to (d). Pub. L. 94–455 struck out “or his delegate” after “Secretary” wherever appearing.
1966—Subsec. (a). Pub. L. 89–719 inserted reference to real estate which has been redeemed by the United States.
Statutory Notes and Related Subsidiaries
Effective Date of 1966 AmendmentAmendment by Pub. L. 89–719 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 a note under section 6323 of this title.