# 26 U.S.C. § 6342: Application of proceeds of levy

Source: OLRC release point 119-134 <https://uscode.house.gov/us/usc/119-134/t26/s6342>. Cite pinpoints as 26 U.S.C. § 6342(a)(1).

## § 6342(a) Collection of liability

Any money realized by proceedings under this subchapter (whether by seizure, by surrender under section 6332 (except pursuant to subsection (d)(2) thereof), or by sale of seized property) or by sale of property redeemed by the United States (if the interest of the United States in such property was a lien arising under the provisions of this title) shall be applied as follows:

**§ 6342(a)(1) Expense of levy and sale.** First, against the expenses of the proceedings;

**§ 6342(a)(2) Specific tax liability on seized property.** If the property seized and sold is subject to a tax imposed by any internal revenue law which has not been paid, the amount remaining after applying paragraph (1) shall then be applied against such tax liability (and, if such tax was not previously assessed, it shall then be assessed);

**§ 6342(a)(3) Liability of delinquent taxpayer.** The amount, if any, remaining after applying paragraphs (1) and (2) shall then be applied against the liability in respect of which the levy was made or the sale was conducted.

## § 6342(b) Surplus proceeds

Any surplus proceeds remaining after the application of subsection (a) shall, upon application and satisfactory proof in support thereof, be credited or refunded by the Secretary to the person or persons legally entitled thereto.

## Regulations

- [Treas. Reg. § 301.6342-1](/26/reg/301.6342-1.md): Application of proceeds of levy. (interprets § 6342)

## Leading cases

- [Zapara v. Commissioner, 124 T.C. 223 (2005)](https://www.courtlistener.com/opinion/4696915/zapara-v-commr/)
- [In re Brown, 126 B.R. 767 (N.D. Ill. 1991)](https://www.courtlistener.com/opinion/1913804/brown-v-evanston-bank-in-re-brown/)
- [Larosa's Intern. Fuel Co. v. United States, 499 F.3d 1324 (Fed. Cir. 2007)](https://www.courtlistener.com/opinion/210360/larosas-intern-fuel-co-inc-v-united-states/)

## Connections

Cites: § 6332 Surrender of property subject to levy

Cited by: § 6207 Cross references; § 6339 Legal effect of certificate of sale of personal property and deed of real property

Derived from: 1939 § 3694; 1939 § 3712

## Amendments

- 1954-08-16: [Act Aug. 16, 1954, ch. 736](/26/act/1954-ch736.md), 68A Stat. 789
- 1966-11-02: [Pub. L. 89-719](/26/act/89-719.md), 80 Stat. 1137
- 1976-10-04: [Pub. L. 94-455](/26/act/94-455.md), 90 Stat. 1834
- 2018-03-23: [Pub. L. 115-141](/26/act/115-141.md), 132 Stat. 1198