Section 301.7245-3

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§ 301.7425–3

26 CFR Ch. I (4–1–14 Edition)

Example 5. The law of State P contains a
procedure which permits a county to collect
a delinquent tax assessment with respect to
real property by the means of a tax sale of
the property. First, a notice of a public auction with respect to the tax assessment on
the real property is published in a local
newspaper. At the public auction, the purchaser, upon payment of the delinquent
taxes and interest, obtains from the county
tax collector a tax certificate with respect to
the real property. Because the obtaining of
this tax certificate does not directly result
in the divestment of either the owner’s title
or junior liens with respect to the property,
the public auction is not a nonjudicial sale
described in section 7425(b). At any time before a tax deed with respect to the property
is issued by the clerk of the county court,
the owner or any holder of a lien or other interest with respect to the property may obtain the tax certificate by paying the holder
of the tax certificate the amount of the
taxes, interest, and costs. After a date which
is two years after the date on which the tax
assessment became delinquent, the holder of
the tax certificate may request the clerk of
the county court to have the property advertised for sale. After advertisement of the
sale, the clerk of the county court conducts
a public sale of the real property and the
purchaser obtains a tax deed. The interests
of all junior lienors in the property are divested and the property is not subject to a
right of redemption under the law of State P.
For purposes of this section, this public sale
is considered to be a nonjudicial sale described in section 7425(b) because the sale is
made pursuant to a statutory lien on the
property sold. The date of the sale, for purposes of computing a period of time determined with reference to the date of sale, is
the date on which the public sale is held at
which the purchaser obtains a tax deed as
this sale directly results in the divestment of
junior liens on the property.
Example 6. The law of State Q contains a
provision which permits a county to collect
a delinquent tax assessment with respect to
real property by the means of a tax sale of
the property. After public notice is given, a
‘‘tax sale’’ of the real property is conducted.
Upon payment of the delinquent taxes and
interest, a purchaser obtains a tax certificate with respect to the real property. If
there is no purchaser at the tax sale, the
property is deemed to be bid in by the State.
Because the obtaining of this tax certificate
by a purchaser or State Q does not directly
result in the divestment of either the owner’s title or junior liens with respect to the
property, the tax sale is not a nonjudicial
sale described in section 7425(b). Following
the tax sale, there is a three-year period during which any person having an interest in
the property may redeem the property by
paying the holder of the tax certificate the

amount of taxes, interest, and costs. Unless,
redeemed, the holder of the tax certificate
may obtain an absolute title at the expiration of the period of redemption provided he
serves a notice of the expiration of the redemption period upon the owner at least 60
days prior to the date of expiration. Because
there is no public or private sale which directly results in the divestment of junior
liens on the property, the date of sale, for
purposes of computing a period of time determined with reference to the date of sale,
is the date on which the holder of the tax
certificate obtains absolute title.
[T.D. 7430, 41 FR 35178, Aug. 20, 1976]

§ 301.7425–3
rules.

Discharge of liens; special

(a) Notice of sale requirements—(1) In
general. Except in the case of the sale
of perishable goods described in paragraph (c) of this section, a notice (as
described in paragraph (d) of this section) of a nonjudicial sale shall be
given, in writing by registered or certified mail or by personal service, not
less than 25 days prior to the date of
sale (determined under the provisions
of § 301.7425–2(b)), to the Internal Revenue Service (IRS) official, office and
address specified in IRS Publication
786, ‘‘Instructions for Preparing a Notice of Nonjudicial Sale of Property
and Application for Consent to Sale,’’
or any successor publication. The relevant
IRS
publications
may
be
downloaded from the IRS Internet site
at http://www.irs.gov. Under this section, a notice of sale is not effective if
it is given to an office other than the
office listed in the relevant publication. The provisions of sections 7502
(relating to timely mailing treated as
timely filing) and 7503 (relating to time
for performance of acts where the last
day falls on Saturday, Sunday, or a
legal holiday) apply in the case of notices required to be made under this
paragraph.
(2) Postponement of scheduled sale—(i)
Where notice of sale is given. In the
event that notice of a sale is given in
accordance with subparagraph (1) of
this paragraph (a), with respect to a
scheduled sale which is postponed to a
later time or date, the seller of the
property is required to give notice of
the postponement to the IRS in the
same manner as is required under local

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Internal Revenue Service, Treasury

§ 301.7425–3

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law with respect to other secured creditors. For example, assume that in
State M local law requires that in the
event of a postponement of a scheduled
foreclosure sale of real property, an
oral announcement of the postponement at the place and time of the
scheduled sale constitutes sufficient
notice to secured creditors of the postponement. Accordingly, if at the place
and time of a scheduled sale in State M
an oral announcement of the postponement is made, the Internal Revenue
Service is considered to have notice of
the postponement for the purpose of
this subparagraph.
(ii) Where notice of sale is not given. In
the event that—
(A) Notice of a nonjudicial sale would
not be required under subparagraph (1)
of this paragraph (a), if the sale were
held on the originally scheduled date,
(B) Because of a postponement of the
scheduled sale, more than 30 days
elapse between the originally scheduled date of the sale and the date of the
sale, and
(C) A notice of lien with respect to
the property to be sold is filed more
than 30 days before the date of the sale,
notice of the sale is required to be
given to the IRS in accordance with
the provisions of paragraph (a)(1) of
this section. In any case in which notice of sale is required to be given with
respect to a scheduled sale, and notice
of the sale is not given, any postponement of the scheduled sale does not affect the rights of the United States
under section 7425(b).
(iii) Examples. The provisions of subdivision (ii) of this subparagraph may
be illustrated by the following examples:
Example 1. A nonjudicial sale of Blackacre,
belonging to A, a delinquent taxpayer, is
scheduled for December 2, 1968. As no notice
of lien is filed applicable to Blackacre more
than 30 days before December 2, 1968, no notice of sale is given to the IRS. On December
2, 1968, the sale of Blackacre is postponed
until January 15, 1969. A notice of lien with
respect to Blackacre is properly filed on January 2, 1969. The sale of blackacre is held on
January 15, 1969. Even though more than 30
days elapsed between the originally scheduled date of the sale (December 2, 1968) and
the date of the sale (January 15, 1969), no notice of sale is required to be given to the IRS
because the notice of lien was not filed more
than 30 days before the date of the sale.

Example 2. Assume the same facts as in example 1 except that a notice of lien is filed
on November 29, 1968, in accordance with section 6323. Because more than 30 days elapsed
between the originally scheduled date of the
sale and the date of the sale, and the notice
of lien is filed (on November 29, 1968) more
than 30 days before the date of the sale (January 15, 1969), notice of the sale, in accordance with the provisions of subparagraph (1)
of this paragraph, is required to be given to
the distirct director.
Example 3. A nonjudicial sale of Whiteacre,
belonging to B, a delinquent taxpayer, is
scheduled for December 2, 1968. A notice of
lien applicable to Whiteacre is filed on November 12, 1968, in accordance with section
6323. As the notice of lien was not filed more
than 30 days before December 2, 1968, no notice of sale is given to the IRS. On December
2, 1968, the sale of Whiteacre is postponed
until December 20, 1968. The sale of
Whiteacre is held on December 20, 1968. Even
though more than 30 days elapsed between
the date notice of lien was filed (November
12, 1968) and the date of the sale (December
20, 1968), no notice of sale is required to be
given to the IRS because not more than 30
days elapsed between the date of the originally scheduled sale (December 2, 1968) and
the date the sale was actually held (December 20, 1968).

(b) Consent to sale—(1) In general. Notwithstanding the notice of sale provisions of paragraph (a) of this section, a
nonjudicial sale of property shall discharge or divest the property of the
lien and title of the United States if
the IRS consents to the sale of the
property free of the lien or title. Pursuant to section 7425(c)(2), where adequate protection is afforded the lien or
title of the United States, the IRS
may, in its discretion, consent with respect to the sale of property in appropriate cases. Such consent shall be effective only if given in writing and
shall be subject to such limitations and
conditions as the IRS may require.
However, the IRS may not consent to a
sale of property under this section
after the date of sale, as determined
under § 301.7425–2(b). For provisions relating to the authority of the IRS to
release a lien or discharge property
subject to a tax lien, see section 6325
and the section 6325 regulations.
(2) Application for consent. Any person
desiring the IRS’s consent to sell property free of a tax lien or a title derived
from the enforcement of a tax lien of
the United States in the property shall

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§ 301.7425–3

26 CFR Ch. I (4–1–14 Edition)

submit to the IRS, at the office and address specified in the relevant IRS publications, a written application, in triplicate, declaring that it is made under
penalties of perjury, and requesting
that such consent be given. The application shall contain the information
required in the case of a notice of sale,
as set forth in paragraph (d)(1) of this
section, and, in addition, shall contain
a statement of the reasons why the
consent is desired.
(c) Sale of perishable goods—(1) In general. A notice (as described in paragraph (d) of this section) of a nonjudicial sale of perishable goods (as defined in paragraph (c)(2) of this section)
shall be given in writing, by registered
or certified mail or delivered by personal service, at any time before the
sale, to the IRS official and office specified in the relevant IRS publications,
at the address specified in such publications. Under this section, a notice of
sale is not effective if it is given to an
office other than the office listed in the
relevant publication. If a notice of a
nonjudicial sale is timely given in the
manner described in this paragraph,
the nonjudicial sale shall discharge or
divest the tax lien, or a title derived
from the enforcement of a tax lien, of
the United States in the property. The
provisions of sections 7502 (relating to
timely mailing treated as timely filing) and 7503 (relating to time for performance of acts where the last day
falls on Saturday, Sunday, or a legal
holiday) apply in the case of notices required to be made under this paragraph. The seller of the perishable
goods shall hold the proceeds (exclusive of costs) of the sale as a fund, for
not less than 30 days after the date of
the sale, subject to the liens and claims
of the United States, in the same manner and with the same priority as the
liens and claims of the United States
had with respect to the property sold.
If the seller fails to hold the proceeds
of the sale in accordance with the provisions of this paragraph and if the IRS
asserts a claim to the proceeds within
30 days after the date of sale, the seller
shall be personally liable to the United
States for an amount equal to the
value of the interest of the United
States in the fund. However, even if the
proceeds of the sale are not so held by

the seller, but all the other provisions
of this paragraph are satisfied, the
buyer of the property at the sale takes
the property free of the liens and
claims of the United States. In the
event of a postponement of the scheduled sale of perishable goods, the seller
is not required to notify the IRS of the
postponement. For provisions relating
to the authority of the IRS to release a
lien or discharge property subject to a
tax lien, see section 6325 and the regulations.
(2) Definition of perishable goods. For
the purpose of this paragraph, the term
‘‘perishable goods’’ means any tangible
personal property which, in the reasonable view of the person selling the
property, is liable to perish or become
greatly reduced in price or value by
keeping, or cannot be kept without
great expense.
(d) Content of notice of sale—(1) In general. With respect to a notice of sale described in paragraph (a) or (c) of this
section, the notice will be considered
adequate if it contains the information
described in paragraph (d)(1) (i), (ii),
(iii), and (iv) of this section.
(i) The name and address of the person submitting the notice of sale;
(ii) A copy of each notice of Federal
Tax Lien (Form 668) affecting the property to be sold, or the following information as shown on each such Notice
of Federal Tax Lien—
(A) The IRS office named thereon,
(B) The name and address of the taxpayer, and
(C) The date and place of filing of the
notice;
(iii) With respect to the property to
be sold, the following information—
(A) A detailed description, including
location, of the property affected by
the notice (in the case of real property,
the street address, city, and State and
the legal description contained in the
title or deed to the property and, if
available, a copy of the abstract of
title),
(B) The date, time, place, and terms
of the proposed sale of the property,
and
(C) In the case of a sale of perishable
property described in paragraph (c) of
this section, a statement of the reasons
why the property is believed to be perishable; and

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Internal Revenue Service, Treasury

§ 301.7425–4

(iv) The approximate amount of the
principal obligation, including interest, secured by the lien sought to be
enforced and a description of the other
expenses (such as legal expenses, selling costs, etc.) which may be charged
against the sale proceeds.
(2) Inadequate notice. Except as otherwise provided in this paragraph, a notice of sale described in paragraph (a)
of this section that does not contain
the information described in paragraph
(d)(1) of this section shall be considered
inadequate by the IRS. If the IRS determines that the notice is inadequate,
the IRS will give written notification
of the items of information which are
inadequate to the person who submitted the notice. A notice of sale that
does not contain the name and address
of the person submitting such notice
shall be considered to be inadequate for
all purposes without notification of
any specific inadequacy. In any case
where a notice of sale does not contain
the information required under paragraph (d)(1)(ii) of this section with respect to a Notice of Federal Tax Lien,
the IRS may give written notification
of such omission without specification
of any other inadequacy and such notice of sale shall be considered inadequate for all purposes. In the event
the IRS gives notification that the notice of sale is inadequate, a notice complying with the provisions of this section (including the requirement that
the notice be given not less than 25
days prior to the sale in the case of a
notice described in paragraph (a) of
this section) must be given. However,
in accordance with the provisions of
paragraph (b)(1) of this section, in such
a case the IRS may, in its discretion,
consent to the sale of the property free
of the lien or title of the United States
even though notice of the sale is given
less than 25 days prior to the sale. In
any case where the person who submitted a timely notice, which indicates
his name and address, does not receive
more than 5 days prior to the date of
sale written notification from the IRS
that the notice is inadequate, the notice shall be considered adequate for
purposes of this section.
(3) Acknowledgment of notice. If a notice of sale described in paragraph (a)
or (c) of this section is submitted in du-

plicate to the IRS with a written request that receipt of the notice be acknowledged and returned to the person
giving the notice, this request will be
honored by the IRS. The acknowledgment by the IRS will indicate the date
and time of the receipt of the notice.
(4) Disclosure of adequacy of notice.
The IRS is authorized to disclose, to
any person who has a proper interest,
whether an adequate notice of sale was
given under paragraph (d)(1) of this section. Any person desiring this information should submit to the IRS a written request that clearly describes the
property sold or to be sold, identifies
the applicable notice of lien, gives the
reasons for requesting the information,
and states the name and address of the
person making the request. The request should be submitted to the IRS
official, office and address specified in
IRS Publication 4235, ‘‘Technical Services (Advisory) Group Addresses,’’ or
any successor publication. The relevant
IRS
publications
may
be
downloaded from the IRS Internet site
at http://www.irs.gov.
(e) Effective/applicability date. These
regulations are effective on July 8,
2008.
[T.D. 7430, 41 FR 35180, Aug. 20, 1976, as
amended by T.D. 9344, 72 FR 39739, July 20,
2007; T.D. 9410, 73 FR 38916, July 8, 2008]

§ 301.7425–4 Discharge of liens; redemption by United States.
(a) Right to redeem—(1) In general. In
the case of a nonjudicial sale of real
property to satisfy a lien prior to the
tax lien or a title derived from the enforcement of a tax lien, the district director may redeem the property within
the redemption period (as described in
paragraph (a)(2) of this section). The
right of redemption of the United
States exists under section 7425(d) even
though the district director has consented to the sale under section
7425(c)(2) and § 301.7425–3(b). For purposes of this section, the term ‘‘nonjudicial sale’’ shall have the same
meaning as used in paragraph (a) of
§ 301.7425–2.
(2) Redemption period. For purposes of
this section, the redemption period
shall be—
(i) The period beginning with the
date of the sale (as determined under

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