The IRS and Treasury issued proposed regulations Friday that would modernize provisions concerning the government’s sale of taxpayers’ property after its seizure by levy (REG-127391-16).
The regulations under Sec. 6335 had not been substantially modified since their initial issuance in 1954, other than to reflect minor statutory changes, the IRS and Treasury noted in a preamble to the proposed regulations. Consequently, a number of the provisions of Regs. Sec. 301.6335-1 are dated, mostly by not reflecting modern electronic methods of submitting bids and accepting payment from successful bidders.
For example, the regulations currently do not refer to online sales but only in-person ones. Regs. Sec. 301.6335-1(c)(1) generally requires sales to be held in the county where the seizure occurred. The proposed regulations would simply require them to occur at the time and place noted in the notice of sale, including online. “Online sales can attract a wider range of potential purchasers, and thus potentially higher bids, while conserving IRS resources,” the preamble noted.
Similarly, Regs. Secs. 301.6335-1(c)(6) and (7) specify that payment is to be made by check or money order. Proposed amendments would change that to payment in the manner specified in the notice of sale or related instructions, which could include electronic payments, credit or debit card payments, or other commercially acceptable and IRS-approved means.
Another proposed update relates to the minimum amount that must be paid with a sealed bid, which currently is the full amount if less than $200 or the greater of $200 or 20% of the bid if more. The proposed regulations would remove the $200 threshold and allow the minimum amount to be set by the public notice of sale or related instructions. Also updated for modern technology would be references to “envelopes” with respect to sealed bids, allowing the bids to be submitted electronically.
The proposed regulations would also update how the IRS may group items for sale, how the IRS determines winning bids in the case of a tie, and which IRS personnel are involved in sales.
The proposed regulations would apply to sales of property seized on or after they are published as final.