IRM 5.10.3 – How IRS Conducts a Seizure of  Property

• 5.10.3.1   General
• 5.10.3.2   Conducting the Seizure — Securing Consent
• 5.10.3.3   Exigent Circumstances
• 5.10.3.4   Writ Procedures
• 5.10.3.5   Seizing the Property
• 5.10.3.6   Protecting the Property After Seizure
• 5.10.3.7   Payment to Vendors for Services Less Than or Equal to $2,500
• 5.10.3.8   "Not to Exceed" and Actual Costs
• 5.10.3.9   Notice of Seizure Form 2433 — Preparation
• 5.10.3.10   Alcoholic Beverages
• 5.10.3.11   Cash Register Contents
• 5.10.3.12   Safe Deposit Boxes
• 5.10.3.13   United States Savings Bonds
• 5.10.3.14   United States Marketable Securities
• 5.10.3.15   Patents and Pending Applications for Patents
• 5.10.3.16   Controlled Substances
• 5.10.3.17   Contacting Technical Services for Seizure Numbers
• 5.10.3.18   Notice of Seizure Form 2433 — Delivery
• 5.10.3.19   Property that is Tampered With, Rescued, or Stolen
• 5.10.3.20   Transfer of Custody to PALS
• Exhibit 5.10.3-1   Form P–576, Consent to Enter Private Premises Reference: 5.10.3.2
• Exhibit 5.10.3-2   P–577, Affidavit of Revenue Officer Reference: 5.10.3.4
• Exhibit 5.10.3-3   P–584, Data Sheet Reference: 5.10.3.4
• Exhibit 5.10.3-4   "Indemnification of Locksmiths/Tow Truck Operators " Reference: 5.10.3.7.1(2)
• Exhibit 5.10.3-5   Form 2433 — Notice of Seizure Reference: 5.10.3.9
• Exhibit 5.10.3-6   Letter 2293(P), Letter Transmitting Seized Food Stamps Reference: 5.10.3.11.2(4)
• Exhibit 5.10.3-7   Letter P–336, Transmittal of Non-Marketable Securities to Bureau of Public Debt Reference: 5.10.3.13(1) and 5.10.3.14.2(3)
• Exhibit 5.10.3-8   Letter P–337, Transmittal of Matured Securities to Federal Reserve Bank Reference 5.10.3.14.2(2)
• Exhibit 5.10.3-9   Letter P–415, Transmittal of Form 2433 to Patent Office Reference 5.10.3.15(3)
• Exhibit 5.10.3-10   Taxpayer/Responsible Officer's Acknowledgment of Opportunity to Download Computer Information Reference 5.10.3.6.4(3)
• Exhibit 5.10.3-11   Form 2433 - Estimated Equity Reference 5.10.3.18.1(2)

5.10.3.1  (10-01-2004)
General

1.       After approval has been secured and all pre-seizure preparations have been completed, the revenue officer should conduct the seizure. Coordination with the PALS is essential before, during, and after the seizure. The PALS must be contacted prior to the seizure date to resolve any logistical issues and to ensure an orderly transfer of property after the seizure has been conducted in order to maximize the proceeds from the sale.

2.       The revenue officer must check IDRS prior to conducting the seizure to confirm that there have been no changes to the status of the taxpayer's account, such as bankruptcy filings, adjustments, or credits that would cause the seizure action to no longer be allowable or warranted.

3.       The revenue officer and assisting employee(s) should enter the public portion of the premises, identify themselves by presenting their credentials, and speak with the rightful occupant. The revenue officer should explain that the purpose of the visit is to seize that taxpayer's assets located on the premises. The revenue officer should take the time to address any questions the taxpayer has regarding his or her rights.

5.10.3.2  (10-01-2004)
Conducting the Seizure — Securing Consent

1.       Either the premise's rightful occupant's (as defined in 5.10.3.2(3)) written consent or a Writ of Entry is required if the property to be seized is located on private premises. The request for consent should be explained to the rightful occupant. Pattern Letter P–576, Consent to Enter Private Premises (Exhibit 5.10.3–1), will be used to prepare the appropriate written consent. The revenue officer should explain that:

A.      Written consent is required for the revenue officer to conduct the seizure.

B.      The consent is only permission to enter the private area of the property — the public area can be entered and property seized without consent.

C.      The rightful occupant's permission is not required to seize, only to enter the private areas.

D.      The rightful occupant can refuse consent, but should be informed that a Writ of Entry is the next probable step.

E.      If consent is given and the rightful occupant allows the property to be stored and sold on the premises, there is usually a reduction in expenses and an increase in net sale proceeds.

2.       The revenue officer may accompany the rightful occupant onto the private premises to discuss the matter. This cannot be considered a consent to enter a private area for the purpose of conducting the seizure.

3.       A written consent from the rightful occupant is required. The rightful occupant can be defined as the party with a legal right to be in possession of the premises. This may vary from state to state. In many cases the taxpayer will be the rightful occupant. However, other parties may be the rightful occupant. In addition to the taxpayer, two examples of rightful occupants who can sign a Consent include:

·         Landlords who have advised the taxpayer that their lease is in default and have the right to lock the taxpayer out

·         Shop owners who have the taxpayer's goods on consignment for sale at their place of business

4.       When it is not possible to request consent in person, the rightful occupant (e.g., the taxpayer) should be requested by mail or telephone to come to the revenue officer's office to give consent. The Consent must be signed by the rightful occupant or authorized representative to be valid.

5.       In most instances the seizure will be made immediately after the Consent is signed. As a general rule, the seizure should be made not more than 7 working days from the date of consent. If the seizure is to be later than 7 days, a new Consent should be requested.

6.       A copy of the Consent will be provided to the person who signed it, the original will be forwarded to Technical Services through the group manager within 5 workdays after the seizure, a copy will be retained with the case file, and a copy will be forwarded to the PALS when custody of the property is transferred (see IRM 5.10.3.20).

7.       In no case is a signed Consent to be maintained as a measure to guarantee performance of an installment agreement, timely filing, or other action.

5.10.3.2.1  (10-01-2004)
Conducting the Seizure — Consent Denied

1.       Consent may be refused in person, by mail, or by telephone. Consents are voluntary and may be revoked at any time by the person giving consent.

2.       If consent to enter is denied, the revenue officer will explain that a Writ of Entry to seize the assets is the next probable step.

3.       Under normal circumstances, if consent is denied, within 2 workdays of the denial the revenue officer will initiate the process to secure a writ. (See IRM 5.10.3.4, Writ Procedures.) If the revenue officer decides not to pursue a writ or is unable to meet the 2-day time frame, he or she will document the reason in the case history.

5.10.3.2.2  (10-01-2004)
Seizure of Both Public and Private Premises

1.       If the assets located in the public area are not sufficient to satisfy the tax liability, and consent to enter to seize the assets on the private premises has been refused, the revenue officer must decide whether to seize the assets in the public area, or to wait until a writ is received permitting him/her to seize assets in both the public and private areas.

2.       Generally, the revenue officer will wait until the writ is secured; however, if a valid reason exists for the revenue officer to proceed with the seizure of the assets on the public portion the revenue officer will advise the taxpayer or person in charge that the contents of the public area are being seized. The revenue officer will further advise the taxpayer that although the Service has seized the assets in the public area neither seizure, entry, nor inventory will be made of the private portion of the premises until a writ is obtained. The assets that are being seized should be removed to a location where they can be protected.

5.10.3.3  (10-01-2004)
Exigent Circumstances

1.       If the revenue officer observes situations that can be described as "exigent circumstances," the private portion of the premises can be entered without a Writ of Entry.

2.       A seizure under exigent circumstances may be defined as a seizure that must be made immediately because there is not ample time to secure the necessary Writ of Entry to prevent the taxpayer from putting property beyond the reach of the Service. Removal of property from the taxpayer's premises in the ordinary course of business, such as delivery of merchandise sold to customers, is not an exigent circumstance.

3.       Extreme caution must be exercised when determining exigent circumstances. The revenue officer should obtain instructions from his or her manager about how to proceed, and extensive documentation in the case history about the procedure is necessary. A jeopardy determination or assessment by itself is not sufficient to satisfy the exigent circumstances exception.

4.       In cases where exigent circumstances exist, the revenue officer:

·         Must be certain that the taxpayer is attempting to put property beyond the reach of the Service

·         Will secure written approval from the territory manager, unless the type of seizure requires the approval of the area director

·         Will secure and document the advice of area counsel

·         May immediately enter private premises, from which property is being removed, without waiting for the Writ of Entry in order to protect the interests of the government

·         Will document the case file with the facts that led to a determination that "exigent circumstances" existed — this documentation must include the efforts to explain to the taxpayer his/her rights prior to seizure

5.10.3.4  (10-01-2004)
Writ Procedures

1.       When a Writ of Entry is required, the revenue officer will prepare:

·         An affidavit (Pattern Letter P–577, Affidavit of Revenue Officer, Exhibit 5.10.3–2)

·         A Data Sheet (Pattern Letter P–584, Exhibit 5.10.3–3)

2.       Since affidavits are testimony under oath of the one giving the affidavit, the revenue officer must ensure that the information presented is accurate as to the facts of the case. Extraneous information and subjective opinions should not be included in the affidavit.

3.       The data sheet should include all pertinent information necessary to provide a complete background on the case, as the sheet may be used to answer questions that the Judge or Magistrate might have regarding the request for a Writ of Entry.

4.       The data sheet will include:

·         Employee information

·         Taxpayer information

·         Notice, balance, and assessment dates

·         Summary of actions taken on the case

·         Rightful occupant information, if the taxpayer is not the rightful occupant

·         Date consent was refused

·         Description of the property to be seized

·         An explanation of how the revenue officer knows the above information

5.       If the description of the property is unknown, use a general description, such as "all of the property of (name of taxpayer) located on the premises of (complete street address)" .

6.       The completed affidavit and data sheet will be forwarded through the group manager to Technical Services and then to area counsel for review as soon as possible. After review, area counsel will refer the matter to the U.S. Attorney for handling. Area counsel will advise the revenue officer or group manager of the place and time of the appointment with the district court Judge or Magistrate. The revenue officer or group manager may be present in order to answer questions the Judge or Magistrate may ask concerning the seizure.

7.       As soon as the Writ of Entry is received, the revenue officer will notify the PALS and proceed with the seizure.

Note:

The revenue officer should check IDRS after the writ has been secured in order to confirm that there have been no changes to the status of the taxpayer's account, such as bankruptcy filings, adjustments, or credits that would cause the seizure action to no longer be allowable or warranted.

8.       Generally, writs are in effect for ten days, but a Judge or Magistrate may impose specific restrictions to limit or increase such time factors.

9.       Once the seizure is made, the revenue officer should forward a copy of the Writ of Entry to Technical Services through the group manager within 5 workdays after the seizure, retain a copy for the case file, send a copy to area counsel, and give a copy to the PALS at the time the transfer of custody of the seized assets is completed.

5.10.3.4.1  (10-01-2004)
Writ Denied

1.       If the Writ of Entry is denied and it is determined that a seizure, limited to property located in a public access area, is appropriate, area counsel will be consulted to determine that such action will not conflict with the basis for the denial of the Writ of Entry for the private premises. If area counsel agrees to the seizure, the property will be seized and stored as appropriate.

5.10.3.5  (10-01-2004)
Seizing the Property

1.       The revenue officer will proceed with the seizure once the Consent is signed or the court order is received, when applicable. If a Writ of Entry was secured, the taxpayer will be given the original copy of the writ at the seizure site. If the taxpayer is not present, the Writ of Entry will be provided to the taxpayer as soon as possible. If a third party is in possession of the property, the revenue officer should give a copy of the Writ of Entry to them at the time of the seizure.

2.       The revenue officer should then deliver Form 668–B to the taxpayer and read the statement on the form to the taxpayer or permit him or her to read it. The revenue officer should answer any questions the taxpayer may have regarding the seizure.

3.       If the revenue officer arrives at the seizure site and a taxpayer's employee is in charge of the property to be seized, the revenue officer should advise him/her to call the taxpayer. If the taxpayer is not available and a writ of entry was secured, the revenue officer should conduct the seizure, and the seizure documents should be left in a sealed envelope addressed to the taxpayer at the taxpayer's residence or place of business.

4.       Seizure of property should be timed in a manner to prevent entrance or interference of employees or customers as much as possible. There are situations where a seizure is made and the taxpayer's employees and customers are present. In this situation the revenue officer should:

A.      Request the taxpayer or the taxpayer's employee in charge of the property to ask the employees and customers to leave.

B.      Ask everyone to leave if the taxpayer or the taxpayer's employee in charge of the property will not ask them to do so.

C.      Secure the site and proceed with the seizure.

5.       The seizure should be discontinued if the taxpayer makes:

·         Full payment of the assessment plus all additions or is prepared to do so immediately

·         Some other satisfactory arrangement regarding the tax liability

6.       If the taxpayer states that a bankruptcy petition was filed, secure the appropriate bankruptcy petition information and contact Technical Services for additional instructions.

7.       If the taxpayer claims hardship, the revenue officer should determine, based on the particular circumstances if the actual seizure action should be discontinued. See IRM 5.10.3.5.1(6) for the procedures to follow if the taxpayer does claim hardship and the revenue officer will not or cannot provide the relief requested. Any further enforcement action will be withheld during the Taxpayer Advocate's review.

8.       A revenue officer is not authorized to use force in the seizure of property. If the taxpayer or any other person bars the path or approach of the revenue officer and clearly indicates that he or she will use force in attempting to prevent the seizure, the revenue officer should withdraw and report the matter to the group manager.

9.       If the revenue officer is in the process of actually seizing the property and is physically attacked, he or she may use such force as is necessary to protect himself or herself to stop the attack. The seizure should be discontinued and the assault reported to TIGTA (see IRM 5.17.3.3.4.2).

10.   Part 3 of Form 668–B must be:

·         Personally provided to the taxpayer,

·         Left at his or her residence or business if he or she has such within the territory where the seizure was made, or

·         Mailed to the taxpayer's last known address within two business days of the seizure only if the taxpayer cannot be readily located, or has no dwelling or place of business within the territory where the seizure was conducted

Note:

If the taxpayer's address is known and is located in the territory where the seizure was made, the documents must be left at the place of abode or business if the taxpayer is not available for personal delivery. The revenue officer may mail the documents in addition to leaving them at the place of abode or business, but they cannot only be mailed in these situations.

11.   Parts 1 and 2 of Form 668–B contain two statements concerning the taxpayer's presence during inventory. At the time of the seizure, the revenue officer will complete and sign the first statement, which indicates that the taxpayer or taxpayer's representative (if available) was asked to be present during inventory. When the inventory is taken, the revenue officer will complete the second statement, which indicates whether the taxpayer or the taxpayer's representative was present. Part 1 will be forwarded to Technical Services within 5 work days after the seizure is conducted.

12.   When property belonging to the taxpayer is in the custody of a third party, Part 4 of Form 668–B should be given to the third party in possession of the property. Form 668–A (Notice of Levy) must also be used since the property is in the possession of a third party. Examples of this include automobiles on a private parking lot, securities in the hand of a stockbroker, or a safe deposit box at a bank.

13.   If a vehicle is parked in a "park and lock" facility, and the attendant is not in possession of the keys to the vehicle, provide the person having custody of the vehicle with Part 4 of Form 668–B. If the attendant is in possession of the key to the vehicle, serve Forms 668–B and 668–A on the attendant and ask the attendant to surrender the keys. If the third party fails to surrender the keys, and/or denies access to the vehicle, the revenue officer will follow the procedures in IRM 5.11.2.1.8, "Refusal to Comply with a Levy."

5.10.3.5.1  (10-01-2004)
Management Review Process and Taxpayer Appeal Rights

1.       Taxpayers whose business assets have been seized, and who request it, are entitled to an expedited case review by management. The seized assets must be tangible personal property essential in carrying on the trade or business of the taxpayer. The purpose of the management review is to determine whether the levy meets the release requirements of IRC 6343 and, in particular, whether the levy has created an economic hardship by preventing the taxpayer from carrying on such trade or business.

2.       The management review will consist of one level only and will be conducted at the territory level. In those cases where the levy action is sustained (levy is not released) by the appropriate compliance manager, the taxpayer will be advised about the Taxpayer Advocate and/or the Collection Appeal Program ( CAP ).

3.       Seizures involving perishable goods require immediate management attention. Local management will provide for an accelerated review process based on the merits of each case.

4.       Once a seizure action is taken, the taxpayer has 10 business days from the date the Notice of Seizure is provided to the taxpayer or left at his or her usual abode or place of business to appeal the seizure action through the CAP process ( IRM 5.10.1.5.3). The taxpayer will use Form 9423, Collection Appeals Request, to request a CAP hearing.

5.       Taxpayer Advocate Service (TAS) cases and Applications for Taxpayer Assistance Orders may be initiated because of Compliance seizure actions. If the taxpayer claims hardship as a result of a seizure or proposed seizure action, the revenue officer should determine if the seizure action should continue.

6.       If the revenue officer cannot or will not initiate action to resolve the taxpayer's inquiry or to provide the relief requested by the taxpayer, the revenue officer must assist the taxpayer in preparing Form 911, Application for Taxpayer Assistance Order (ATAO). Form 911 must state the hardship and/or problem, and it must document the resolution and/or relief requested. The revenue officer must document the reason why the requested action was not taken. Form 911 will be forwarded to the TAS within 1 workday of identifying that the contact potentially meets TAS criteria.

7.       Further collection actions are suspended until the hardship is resolved by the Advocate's Office. See IRM 13.1.7 for TAS criteria and procedures.

5.10.3.6  (10-01-2004)
Protecting the Property After Seizure