Ezel / IRS Rulings / 200945052

The IRS cannot sell a right of redemption to a third party

Number
200945052
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Other Requests
Topics
Procedure, penalties, and administration
Code sections
§ 7425
Ruling dated
September 11, 2009
Publicly released
November 6, 2009
Source
View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2009, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2009
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

Counsel advised that the Internal Revenue Code does not authorize the IRS to sell a right of redemption. Section 7425(d)(1) limits redemption to the Secretary, while the IRS may release a right of redemption for a fee only to a party with a proper interest in the property sold. Because a third party lacks that proper interest, counsel concluded that the IRS cannot sell the right to redeem property to that party.

Ruling snapshot

  • Question: May the IRS sell or release a right of redemption to a third party?
  • Outcome: Advice given
  • Key authorities: IRC § 7425(d)(1); 28 U.S.C. § 2410(e); Treas. Reg. § 301.7425-4(c)(4)

Full text (IRS public release)

ID: CCA_2009091114430603 Number: 200945052
Release Date: 11/6/2009
Office: --------------
UILC: 7425.05-00

From: ----------------
Sent: Friday, September 11, 2009 2:43:22 PM
To: -------------------------
Cc: --------------------
Subject: RE: Sale of redemption right

------------

Nothing in the Internal Revenue Code authorizes the Service to sell a right of redemption. However § 7425(d)(1) specifically limits redemption to the Secretary. In addition, for a fee, the Service may release a right of redemption. The Service may only release a right of redemption to a party with a proper interest in the property sold. 28 U.S.C. § 2410(e); Treas. Reg. § 301.7425-4(c)(4). The Service cannot release the right to redeem property to a third party.

Because the Code does not authorize the sale of a redemption right and the release of a right of redemption is limited to parties with a proper interest in the subject property, it follows that the Service cannot sell the right to redeem property to a third party.

Please let me know if you have any questions or concerns.

-----------------------

------------

-------------

------------------

------------------

What does the Code say today, for your facts?

This advice was written for IRS staff and cannot be cited. Ezel checks the current Internal Revenue Code and IRS guidance against your situation, with citations.

Opens in Ezel Pro.

  • Checks the law as it stands today, not only this page
  • Cites every source it relies on, so you can verify it
  • Chat, drafting and research in one workspace