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United States v. Natl. Bank of Commerce, supra, held that “If the
custodian honors the levy, he is ‘discharged from any obligation
or liability to the delinquent taxpayer with respect to such
property or rights to property arising from such surrender or
payment.’” Id. at 721 (quoting section 6332(d)). The liability
can also be satisfied by the sale of the property levied upon by
the Commissioner. See United States v. Whiting Pools, Inc., 421
U.S. at 211. In the instant case, MMI’s bankruptcy trustee paid
the remaining portion of the originally assessed liability in
2000.
Petitioners contend that when respondent entered into the
December 15, 1978, payment agreement with MMI, which required MMI
to make 200 weekly payments of $1,500 to respondent to satisfy
petitioners’ tax liability, respondent exercised “dominion and
control” over petitioners’ account receivable, satisfying
petitioners’ tax liability. In support of their contention,
petitioners cite United States v. Barlow’s, Inc., 767 F.2d 1098
10(...continued)
to) property or rights to property subject to levy and upon
which a levy has been made shall, upon demand of the district
director, surrender the property or rights (or discharge the
obligation) to the district director, except that part of the
property or rights (or obligation) which, at the time of the
demand, is actually or constructively under the jurisdiction
of a court because of an attachment or execution under any
judicial process.
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