The IRS released final regulations on Nov. 4 on the sale of a taxpayer’s property that the agency seizes by levy. The final regulations amend existing regulations to better allow the agency to maximize sale proceeds for the taxpayer's benefit whose property the IRS has seized. These regulations affect all sales of property that the IRS has seized by levy.
According to the Journal of Accountancy, the regulations under Sec. 6335 had not changed considerably since their initial issuance.
As background, on Oct. 16, 2023, the Treasury Department and the IRS published in the Federal Register (88 FR 71323) a notice of proposed rulemaking (REG-127391-16) proposing changes to regulations under 26 CFR part 301. The proposed regulations specified the manner and conditions of sales of seized property with modern practices. The proposed amendments included changes to facilitate online sales. This provides increased flexibility in grouping property and specifying payment terms while providing clarity to the IRS in making decisions on which employees can be assigned to conduct sales or perform related ministerial duties.
The Treasury Department and the IRS just received a single comment as a response to the notice of proposed rulemaking. However, the comment did not address the proposed regulations. Additionally, no public hearing was requested or held on the proposed regulations. Thus, these final regulations text only contained minor and non-substantive changes.
The Journal reported that the final regulations mandate that sales happen at the time and place stated in the notice of sale, which includes online. They also permit payment in the manner specified in the notice of sale or related instructions. These can include electronic, credit or debit card payments, or other commercially acceptable and IRS-approved means.
The regulations previously required that payment was made by check or money order. In a similar manner, the final regulations permit the minimum amount of a sealed bid to be set by the public notice of sale or related instructions without a minimum bid. Aside from this, under the final regulations, bids could also be submitted electronically, the Journal reported.
The Journal said that the final regulations also update how the IRS can group items for sale, how the IRS determines winning bids when there is a tie and which IRS personnel are involved in sales.