Source: http://synapticsparks.info/tax/evidence/c12/levy5.html
Timestamp: 2019-04-20 04:57:29+00:00

Document:
Section 3710, I. R. C.
"(A) * * * Any person in possession of property, or rights to property, subject to distraint, upon which a levy has been made, shall, upon demand by the collector or deputy collector making such levy, surrender such property or rights to such collector or deputy, unless such property or right is, at the time of such demand, subject to an attachment or execution under any judicial process.
IRC section 3710 of the 1939 code is now IRC section 6332 of the current code.
Please observe the underscored phrases. "Property subject to distraint" was changed to read "property subject to levy". Distraint and levy are synonymous.
Please observe that in order to trigger the application of the requirements of section 6332, an actual levy MUST have been made.
The term "levy" as used in this title includes the power of distraint and seizure by any means.
So "property subject to levy" means "property subject to distraint" and "property subject to seizure".
Section 3710 requires the surrender of property or rights to property (1) subject to distraint; (2) upon which a levy has been made; (3) unless such property is subject to an attachment or execution under judicial process. This section is new, having been enacted in 1926, Act of Feb. 26, 1926, section 1114(e) and (f), 44 Stat. 117; but the provision authorizing the Collector after failure or refusal of the taxpayer to pay taxes due, to levy upon his property or property rights (section 3692) dates from 1866.
The requirement to surrender property has three conditions that MUST be met before there is a legal duty to surrender such property.
The property must not be 'claimed' by a prior judicial process.
Section 3692 of the 1939 IRC is now contained IRC section's 6331(a), 6331(b), and 6334(c).
For the purposes of this web page, property subject to distraint means property not exempt from seizure under IRC section 6334, Property exempt from seizure.
As pointed out in United States v. Metropolitan Life Ins. Co., the procedure for distraint authorized under section 28 of the Revenue act of 1864, was in substance like that of Section 3692 except that nothing was said about a levy. In 1866, Congress, among other changes, provided that a levy was required to be made "upon all property and rights to property * * * belonging to" the taxpayer. The provision authorizing levy is unchanged in the statute applicable here (section 3692). Thus Congress enacted section 3710 with knowledge that for some sixty years levy had been authorized in these cases. In section 3710, which provides a method of forcing a third person to surrender property of the taxpayer for the payment of the taxes due, Congress not only required that the property surrendered should have been levied upon , but emphasized this provision by making the allowance for costs and interest contained in subsection (b) run "from the date of such levy." The property involved here falls within the classes of property subject to distraint, section 3690, and is not subject to an attachment or execution; but the record fails to show that levy has been made.
The procedure for levy IS the procedure for seizure IS the procedure for distraint.
Property to be surrendered in an act of seizure is property that has a bona fide levy upon it.
A bona fide levy requires procedures to have been scrupulously adhered to. As noted in the last sentence above, no levy was made upon the property involved in this case because proper procedure was not followed.
"That one Giles Kavanagh, the duly appointed, qualified and acting Collector of Internal Revenue for the District of Michigan, on September 8, 1941, as said Collector, gave written notice to the defendant LeRoy E. O'Dell that the tax assessment ... totalling $1,336.84, including interest thereon, were unpaid and due and further notified the defendant that all property, rights to property, moneys, credits and/or bank deposits then in his possession or under his control and belonging to said Howie Company, and all sums of money owing from the defendant to said Howie Company, were seized and levied upon for the payment of said taxes, together with the penalties and interest, and demand was made upon the defendant for the sum of $1,336.84, or such lesser sum as he was indebted to said Howie Company, to be applied in payment of said tax liabilities."
This paragraph describes a mere statement of notice of claim. Nothing alleged to have been done amounts to a levy, which requires that the property be brought into legal custody through seizure, actual or constructive, levy being "an absolute appropriation in law of the property levied upon." Rio Grande R. Co. v. Gomila; In re Weinger, Bergman & Co.; Smith v. Packard. Levy is not effected by mere notice. Hollister v. Goodale; Meyer v. Missouri Glass Co.; Jones v. Howard.
The Collector (IRS) gave written NOTICE of levy to a third party demanding the second party's property. Such NOTICE of levy was "a mere statement of notice of claim." Such "mere statement of notice of claim" does NOT amount to a levy. A levy is "an absolute appropriation in law of the property levied upon."
What then, is "an absolute appropriation in law of the property levied upon"?
Section 3692 [present 6332] does not prescribe any procedure for accomplishing a levy upon a bank account. The method followed in the cases is that of issuing warrants of distraint, making the bank a party, and serving with the notice of levy copy of the warrants of distraint and notice of lien. Cf. Commonwealth Bank v. United States, 6 Cir., 115 F.2d 327; United States v. Bank of United States, D. C., 5 F.Supp. 942, 944. No warrants of distraint were issued here.
A "warrant of distraint" otherwise known as a court order, is required to effect levy.
The cases relied upon by the Government as supporting recovery under section 3710 arise in the main out of situations where a bank has been sued, or joined as a party to an action claiming a bank deposit. No such procedure was followed in this case.
"No such" [levy] "procedure was followed in this case": The bank was not sued, nor joined as a party to a legal action to bring legal control of the property (money) in question under control of the government.
A bank that gives up your money absent a valid levy is violating its fiduciary duties to you. A valid levy REQUIRES as court order.
Moreover, it does not appear that notice and demand were served upon the person liable to pay the taxes, namely, the Howie Company, in accordance with section 3670 and 3690. This being the case, query, whether the property or rights to property were within the meaning of section 3710 "subject to distraint," for under section 3690 the right to collect taxes by distraint and sale arises only after notice and demand.
A notice is NOT a demand unless the demand is made on the notice. "This is your notice and demand" would fill the bill.
It would seem to not require much exposition to demonstrate that when the sovereign establishes any priority in its favor, and imposes certain conditions upon enforcement of that right, it is required to comply with the conditions it has laid down. Since no levy was made upon the funds involved, one of the jurisdictional prerequisites for the application of section 3710 is lacking, and the complaint was rightly dismissed. Cf. United States v. AEtna Life Ins. Co. of Hartford, Conn.
In summary: No levy is "made" unless accompanied by court order.
Therefore: NO PRIVATE PROPERTY WITHOUT A COURT ORDER. Anything else is a violation of due process.

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