[Code of Federal Regulations]
[Title 27, Volume 1]
[Revised as of April 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 27CFR70.150]

[Page 1012-1015]
 
            TITLE 27--ALCOHOL, TOBACCO PRODUCTS AND FIREARMS
 
 CHAPTER I--BUREAU OF ALCOHOL, TOBACCO AND FIREARMS, DEPARTMENT OF THE 
                                TREASURY
 
PART 70--PROCEDURE AND ADMINISTRATION--Table of Contents
 
     Subpart D--Collection of Excise and Special (Occupational) Tax
 
Sec. 70.150  Release of lien or discharge of property.

    (a) Release of lien. An appropriate ATF officer is charged with 
releasing liens or discharging property from liens. The appropriate ATF 
officer must issue a certificate of release of a lien imposed with 
respect to any tax imposed by a provision of 26 U.S.C. enforced and 
administered by the Bureau, not later than 30 days after the day on 
which either:
    (1) The appropriate ATF officer finds that the entire liability for 
the tax has been satisfied or has become unenforceable as a matter of 
law (and not merely uncollectible or unenforceable as a matter of fact). 
Tax liabilities frequently are unenforceable in fact for the time being, 
due to the temporary nonpossession by the taxpayer of discoverable 
property or property rights. In all cases the liability for the payment 
of the tax continues until satisfaction of the tax in full or until the 
expiration of the statutory period for collection, including such 
extension of the period for collection as may be agreed upon in writing 
by the taxpayer and the appropriate ATF officer.
    (2) The appropriate ATF officer is furnished and accepts a bond that 
is conditioned upon the payment of the amount assessed (together with 
all interest in respect thereof and any expenses to which the Government 
has been put in the matter), within the time agreed upon in the bond, 
but not later than 6 months before the expiration of the statutory 
period for collection, including any period for collection agreed upon 
in writing by the appropriate ATF officer and the taxpayer. For 
provisions relating to bonds, see 26 U.S.C. 7101 and 7102 and 
Secs. 70.281 and 70.282 of this part.
    (b) Discharge of specific property from the lien--(1) Property 
double the amount of the liability. The appropriate ATF officer may, in 
that officer's discretion, issue a certificate of discharge of any part 
of the property subject to a lien imposed under 26 U.S.C. 64 if the 
Bureau determines that the fair market value of that part of the 
property remaining subject to the lien is at least double the sum of the 
amount of the unsatisfied liability secured by the lien and of the 
amount of all other liens upon the property which have priority over the 
lien. In general, fair market value is that amount which one ready and 
willing but not compelled to buy would pay to another ready and willing 
but not compelled to sell the property.
    (2) Part payment; interest of United States valueless--(i) Part 
payment. The appropriate ATF officer may, in that officer's discretion, 
issue a certificate of discharge of any part of the property subject to 
a lien imposed under 26 U.S.C. 64 if there is paid over to the Bureau in 
partial satisfaction of the liability secured by the lien an amount 
determined by the Bureau to be not less than the value of the interest 
of the United States in the property to be so discharged. In determining 
the amount to be paid, the appropriate ATF officer will take into 
consideration all the facts and circumstances of the case, including the 
expenses to which the Government has been put in the matter. In no case 
shall the amount to be paid be less than the value of the interest of 
the United States in the property with respect to which the certificate 
of discharge is to be issued.

[[Page 1013]]

    (ii) Interest of the United States valueless. The appropriate ATF 
officer may, in that official's discretion, issue a certificate of 
discharge of any part of the property subject to the lien if the Bureau 
determines that the interest of the United States in the property to be 
so discharged has no value.
    (iii) Valuation of interest of United States. For purposes of this 
paragraph (b)(2), in determining the value of the interest of the United 
States in the property, or any part thereof, with respect to which the 
certificate of discharge is to be issued, the appropriate ATF officer 
shall give consideration to the value of the property and the amount of 
all liens and encumbrances thereon having priority over the Federal tax 
lien. In determining the value of the property, the appropriate ATF 
officer may, in that official's discretion, give consideration to the 
forced sale value of the property in appropriate cases.
    (3) Discharge of property by substitution of proceeds of sale. The 
appropriate ATF officer may, in that officer's discretion, issue a 
certificate of discharge of any part of the property subject to a lien 
imposed under 26 U.S.C. 64 if such part of the property is sold and, 
pursuant to a written agreement with the appropriate ATF officer, the 
proceeds of the sale are held, as a fund subject to the liens and claims 
of the United States, in the same manner and with the same priority as 
the lien or claim had with respect to the discharged property. This 
subparagraph does not apply unless the sale divests the taxpayer of all 
right, title, and interest in the property sought to be discharged. Any 
reasonable and necessary expenses incurred in connection with the sale 
of the property and the administration of the sale proceeds shall be 
paid by the applicant or from the proceeds of the sale before 
satisfaction of any lien or claim of the United States.
    (4) Application for certificate of discharge. Any person desiring a 
certificate of discharge under this paragraph shall submit an 
application in writing to the appropriate ATF officer. The application 
shall contain such information as the appropriate ATF officer may 
require.
    (c) Subordination of lien--(1) By payment of the amount 
subordinated. The appropriate ATF officer may, in that officer's 
discretion, issue a certificate of subordination of a lien imposed under 
26 U.S.C. 64 upon any part of the property subject to the lien if there 
is paid over to the appropriate ATF officer an amount equal to the 
amount of the lien or interest to which the certificate subordinates the 
lien of the United States. For this purpose, the tax lien may be 
subordinated to another lien or interest on a dollar-for-dollar basis. 
For example, if a notice of a Federal tax lien is filed and a delinquent 
taxpayer secures a mortgage loan on a part of the property subject to 
the tax lien and pays over the proceeds of the loan to the appropriate 
ATF officer after an application for a certificate of subordination is 
approved, the appropriate ATF officer will issue a certificate of 
subordination. This certificate will have the effect of subordinating 
the tax lien to the mortgage.
    (2) To facilitate tax collection. The appropriate ATF officer may, 
in that officer's discretion, issue a certificate of subordination of a 
lien imposed under 26 U.S.C. 64 upon any part of the property subject to 
the lien if the appropriate ATF officer believes that the subordination 
of the lien will ultimately result in an increase in the amount realized 
by the United States from the property subject to lien and will 
facilitate the ultimate collection of the tax liability.
    (3) Application for certificate of subordination. Any person 
desiring a certificate of subordination under this paragraph shall 
submit an application therefor in writing to the appropriate ATF 
officer. The application shall contain such information as the 
appropriate ATF officer may require.
    (d) Nonattachment of lien. If the appropriate ATF officer determines 
that, because of confusion of names or otherwise, any person (other than 
the person against whom the tax was assessed) is or may be injured by 
the appearance that a notice of lien filed in accordance with 
Sec. 70.148 of this part refers to such person, the appropriate ATF 
officer may issue a certificate of nonattachment. Such certificate shall 
state that

[[Page 1014]]

the lien, notice of which has been filed, does not attach to the 
property of such person. Any person desiring a certificate of 
nonattachment under this paragraph shall submit an application therefor 
in writing to the appropriate ATF officer. The application shall contain 
such information as the appropriate ATF officer may require.
    (e) Effect of certificate--(1) Conclusiveness. Except as provided in 
paragraphs (e) (2) and (3) of this section, if a certificate is issued 
under 26 U.S.C. 6325 by the appropriate ATF officer and the certificate 
is filed in the same office as the notice of lien to which it relates 
(if the notice of lien has been filed), the certificate shall have the 
following effect:
    (i) In the case of a certificate of release issued under paragraph 
(a) of this section, the certificate shall be conclusive that the tax 
lien referred to in the certificate is extinguished;
    (ii) In the case of a certificate of discharge issued under 
paragraph (b) of this section, the certificate shall be conclusive that 
the property covered by the certificate is discharged from the tax lien;
    (iii) In the case of a certificate of subordination issued under 
paragraph (c) of this section, the certificate shall be conclusive that 
the lien or interest to which the Federal tax lien is subordinated is 
superior to the tax lien; and
    (iv) In the case of a certificate of nonattachment issued under 
paragraph (d) of this section, the certificate shall be conclusive that 
the lien of the United States does not attach to the property of the 
person referred to in the certificate.
    (2) Revocation of certificate of release or nonattachment--(i) In 
general. If the appropriate ATF officer determines that either:
    (A) A certificate of release or a certificate of nonattachment of 
the general tax lien imposed by 26 U.S.C. 6321 was issued erroneously or 
improvidently, or
    (B) A certificate of release of such lien was issued in connection 
with a compromise agreement under 26 U.S.C. 7122 which has been 
breached,and if the period of limitation on collection after assessment 
of the tax liability has not expired, the appropriate ATF officer may 
revoke the certificate and reinstate the tax lien.
    (ii) Method of revocation and reinstatement. The revocation and 
reinstatement described in paragraph (e)(2)(i) of this section is 
accomplished by:
    (A) Mailing notice of the revocation to the taxpayer at the 
taxpayer's last known address, and
    (B) Filing notice of the revocation of the certificate in the same 
office in which the notice of lien to which it relates was filed (if the 
notice of lien has been filed).
    (iii) Effect of reinstatement--(A) Effective date. A tax lien 
reinstated in accordance with the provisions of this paragraph (e)(2) is 
effective on and after the date the notice of revocation is mailed to 
the taxpayer in accordance with the provisions of paragraph 
(e)(2)(ii)(A) of this section, but the reinstated lien is not effective 
before the filing of notice of revocation, in accordance with the 
provisions of paragraph (e)(2)(ii)(B) of this section, if the filing is 
required by reason of the fact that a notice of the lien had been filed.
    (B) Treatment of reinstated lien. As of the effective date of 
reinstatement, a reinstated lien has the same force and effect as a 
general tax lien imposed by 26 U.S.C. 6321 which arises upon assessment 
of a tax liability. The reinstated lien continues in existence until the 
liability is satisfied or until the expiration of the period of 
limitation on collection after assessment of the tax liability to which 
it relates. The reinstatement of the lien does not retroactively 
reinstate a previously filed notice of lien. The reinstated lien is not 
valid against any holder of a lien or interest described in Sec. 70.145 
of this part until notice of the reinstated lien has been filed in 
accordance with the provisions of Sec. 70.148 of this part subsequent to 
or concurrent with the time the reinstated lien became effective.
    (3) Certificates void under certain conditions. Notwithstanding any 
other provisions of 26 U.S.C. subtitle F, any lien for Federal taxes 
attaches to any property with respect to which a certificate of 
discharge has been issued if the person liable for the tax reacquires 
the property after the certificate has been issued. Thus, if property 
subject to a

[[Page 1015]]

Federal tax lien is discharged therefrom and is later reacquired by the 
delinquent taxpayer at a time when the lien is still in existence, the 
tax lien attaches to the reacquired property and is enforceable against 
it as in the case of after-acquired property generally.
    (f) Filing of certificates and notices. If a certificate or notice 
described in this section may not be filed in the office designated by 
State law in which the notice of lien imposed by 26 U.S.C. 6321 (to 
which the certificate or notice relates) is filed, the certificate or 
notice is effective if filed in the office of the clerk of the United 
States district court for the judicial district in which the State 
office where the notice of lien is filed is situated.

(26 U.S.C. 6325)

[T.D. ATF-301, 55 FR 47616, Nov. 14, 1990, as amended by T.D. ATF-450, 
66 FR 29025, May 29, 2001]