Opinion ID: 72468
Heading Depth: 3
Heading Rank: 2

Heading: Payments to Stanley as loans

Text: Mission asserts that because the disbursements to Stanley were made in advance of Stanley’s performance of actual services, they were loans not subject to the levy. However, the implementing regulation of Section 6331(e) specifically 7 Case: 09-60402 Document: 00511062860 Page: 8 Date Filed: 03/25/2010 No. 09-60402 includes advances within the ambit of a continuing levy. The regulation provides that a continuing levy “attaches to both salary or wages earned but not yet paid at the time of the levy, advances on salary or wages made subsequent to the date of the levy, and salary or wages earned and becoming payable subsequent to the date of the levy, until the levy is released.” 26 C.F.R. § 301.6331-1(b)(1) (emphasis added). That Stanley did not subsequently earn the wages advanced is irrelevant. At the moment Mission made the payments, those funds were subject to the levy as advances. Mission had a duty to surrender property subject to the levy, and it lacked a basis for failure to comply with that duty at the time the disbursements were made. See 26 U.S.C. § 6332(d)(1). Had Mission surrendered the payments to the IRS, it would have been immune from liability for wrongful compliance. Id. § 6332(e); see also Melton v. Teachers Ins. & Annuity Ass’n of Am., 114 F.3d 557, 561 (5th Cir. 1997). Mission was without legal excuse for its failure to comply.