Taxation-Federal Tax Liens-Section 6321 of the Internal Revenue Code as Basis For Injunction Binding Assets of Foreign Branch of American Bank

The Commissioner of Internal Revenue issued jeopardy assessments against the taxpayer, Omar, S.A., a Uruguayan corporation. To avoid payment, Omar began to liquidate its American-held assets by transferring receipts out of the country. Pursuant to its statutory right, under section 6321 of the Internal Revenue Code of 1954, to impose a lien upon all property of a delinquent taxpayer, the United States brought suit against Omar and various New York banks in the domestic and foreign branches of which Omar’s funds were deposited. The district court granted a preliminary injunction restraining certain of the banks from transferring any property whether located in the United States or held by the banks for Omar in foreign branches. On appeal, held, injunction modified so as not to include property held by the foreign branches of the appealing American bank. Since a foreign branch bank is a separate entity from the parent bank, jurisdiction over the parent does not constitute jurisdiction over funds deposited in the branch. United States v. First Nat’l City Bank, 321 F.2d 14 (2d Cir. 1963).