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the rights of third parties until after the levy is made, in
postseizure administrative or judicial hearings.” Id. (examining
United States v. Rodgers, supra at 696); see also United States
v. Whiting Pools, Inc., supra at 211.8 Thus, the effect of the
levy in the instant case is to bring the account receivable into
respondent’s legal custody. See United States v. Natl. Bank of
Commerce, supra at 721 (“property comes into the constructive
(...continued)
rights to property, he may seize and sell such property or
rights to property (whether real or personal, tangible or
intangible). [Emphasis added.]
8In Whiting Pools, Inc. v. United States, supra at 210-211,
the Supreme Court stated:
The Service’s interest in seized property is its lien
on that property. The Internal Revenue Code’s levy and
seizure provisions, � 6331 and 6332, are special procedural
devices available to the IRS to protect and satisfy its
liens, United States v. Sullivan, 333 F.2d 100, 116 (CA 3
1964), and are analogous to the remedies available to
private secured creditors. See Uniform Commercial Code � 9-
503, 3A U.L.A. 211-212 (1981); n.14, supra. They are
provisional remedies that do not determine the Service’s
rights to the seized property, but merely bring the property
into the Service’s legal custody. See 4 B. Bittker, Federal
Taxation of Income, Estates and Gifts � 111.5.5, p. 111-108
(1981). See generally Plumb, Federal Tax Collection and
Lien Problems (First Installment), 13 Tax L. Rev. 247, 272
(1958). * * * The IRS is obligated to return to the debtor
any surplus from a sale. � 6342(b). Ownership of the
property is transferred only when the property is sold to a
bona fide purchaser at a tax sale. See Bennett v. Hunter, 9
Wall. 326, 336 (1870); � 6339(a)(2); Plumb, 13 Tax L. Rev.,
at 274-275. In fact, the tax sale provision itself refers
to the debtor as the owner of the property after the seizure
but prior to the sale. Until such a sale takes place, the
property remains the debtor’s and thus is subject to the
turnover requirement of sec. 542(a). [Fn. ref. omitted.]
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