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4000 - Advisory Opinions

Administrative Levies of the Internal Revenue Service Against Taxpayer Accounts in Closed Banks


November 7, 1989

Carroll R. Shifflett, Associate General Counsel

This responds to your letter of May 5, 1989, requesting resolution of a perceived dispute between the F.D.I.C. and the Internal Revenue Service.

After reviewing the cases cited in your letter, and after independently reviewing the applicable law, the F.D.I.C. will adopt a policy of honoring administrative levies of the I.R.S. against taxpayer accounts in closed banks. Under this policy, the I.R.S. will acquire "whatever rights the taxpayer himself possesses." United States v. National Bank of Commerce, 472 U.S.C. § 713, 725 (1985).

Because the I.R.S. will stand in the shoes of the taxpayer, the I.R.S. will be subject to the same restrictions that would apply to the taxpayer seeking to recover deposits. The F.D.I.C., however, will not require the taxpayer to file a claim before honoring the administrative levy. As the receiver of a closed bank, the F.D.I.C. is "obligated with respect to" the depositor's rights to his or her insured deposits, and thus obligated to honor the administrative levy upon demand in accordance with 26 U.S.C. § 6332.

If you have any further questions regarding this general policy, please feel free to call Dan Richards of my staff at (202) 898-7278.

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