IRM
5.10.2 Securing Approval for
IRS
Seizure Actions and Post-Approval Actions
5.10.2.1 (10-01-2004)
General
1.
This
section includes the procedures to follow for securing managerial
approval for seizures, and it contains specific provisions to
follow for specialized types of assets. Instructions for seizure
of perishable goods are contained in
IRM
5.10.2.13.
2.
Judicial
approval is required for certain principal residence seizures. See
IRM
5.10.2.15 for the procedures to follow when seeking judicial
approval for the seizure of a taxpayer's principal residence. This
includes any real property used as a principal residence by any of
the following individuals:
·
Taxpayer
·
Taxpayer's
spouse or former spouse
·
Taxpayer's
minor children
3.
IRM
sections 5.10.2.2 through
5.10.2.12 contain special instructions that should be reviewed to
determine if the asset to be seized requires any additional
pre-seizure actions prior to submitting the case for approval.
These procedures should be followed whenever any of the following
assets are considered for seizure:
·
Tangible
Personal Property or Real Property (other than real property which
is rented) Used in the Trade or Business of an Individual Taxpayer
·
Mobile
Homes
·
FCC
Broadcasting Licenses
·
Historic
Properties
·
Religious
Organizations
·
Firearms
·
Controlled
Substances or Drug Paraphernalia
·
Material
Considered Obscene or Pornographic
·
Seizures on
High Level Drug Dealers
·
Property
with Environmental Considerations
·
Cleared
Contractor Facilities
5.10.2.2 (10-01-2004)
Tangible Personal Property or Real Property (Other than Real
Property Which is Rented) Used in the Trade or Business of an
Individual Taxpayer
1.
The prior
written approval of the area director must be secured for seizure
of these types of assets unless collection of tax is in jeopardy.
The revenue officer must document the history that the taxpayer's
other assets subject to collection are insufficient to satisfy the
liability and expenses of the proceeding. See
IRM
5.17.3.1.3.8.
2.
If the
asset to be seized is a state commercial fish or wildlife license,
the revenue officer must consider as an asset the future income
that could be derived from the commercial sale of fish or wildlife
harvested under the license.
3.
This
approval level is based on the actual use of the asset, not the
type of liability for which the seizure is being conducted. For
example, seizure of a self-employed real estate agent's or
insurance agent's vehicle used in their business would require
approval by the area director even if it was being seized for an
individual tax liability.
5.10.2.3 (10-01-2004)
Mobile Homes
1.
A mobile
home may be either real or personal property, depending upon state
or local law. It is important to make this determination since
personal property must be reduced to possession in order for there
to be a valid seizure. Therefore, prior to seizure of a mobile
home, the revenue officer should determine the type of property
involved. It may be necessary to confer with Technical Services
and request an opinion from area counsel.
2.
The request
should:
·
Describe
the property
·
State
whether the mobile home is attached to the ground and if so, by
what means
·
Include
information on the current use being made of the mobile home
3.
If it is
anticipated that the contents will be seized, information should
be furnished as to the property involved. The approval level will
depend on whether the asset is a principal residence, other
residence, business asset, etc.
5.10.2.4 (10-01-2004)
FCC Broadcasting Licenses
1.
Administrative
seizure and sale of FCC broadcasting licenses is not feasible due
to the difficulties involved in the transfer of ownership without
the approval of the Federal Communications Commission. However,
levy against other assets of the taxpayer's business is still
appropriate.
5.10.2.5 (10-01-2004)
Historic Properties
1.
The
National Historic Preservation Act (NHPA) was enacted to preserve
irreplaceable assets of historical significance. Prior to a
seizure of such assets area counsel must be consulted.
2.
Properties
that have the following characteristics are indications of
historical or cultural properties that fall under 36
CFR
Part 800:
·
A
significance in history of the architecture, archeology, and/or
culture in structures and objects
·
An
association with events in history
·
An
association with historical figures
·
Distinctive
characteristics of period architecture, construction, artistic
significance, or information important to history
5.10.2.6 (10-01-2004)
Religious Organizations and Religious Freedom Restoration Act
1.
Seizure of
assets belonging to a religious organization is a sensitive
matter. In addition to consideration of alternative methods of
resolving the matter and other factors that must be considered,
revenue officers must consider the implications of the Religious
Freedom Restoration Act of 1993 which was established to protect
the free exercise of religion.
2.
Revenue
officers must secure area counsel's approval before seeking other
appropriate approvals when proposing the seizure of a religious
organization's assets.
5.10.2.7 (10-01-2004)
Firearms
1.
Firearms of
substantial value may be seized if they are included as a business
asset, e.g., the inventory of a sports equipment outlet, hardware
store, a gunsmith, etc. Because of the sensitive nature of this
type of seizure, approval by the area director is required. Prior
to the seizure, the revenue officer must contact the PALS to
discuss the potential seizure. The PALS should contact area
counsel, who will then contact the Bureau of Alcohol, Tobacco, and
Firearms (ATF) of the Department of Justice for assistance in
selling the inventory.
Note:
Rather than conducting the seizure, the
revenue officer can also consider recommending a suit to foreclose
the federal tax lien.
2.
Single guns
or firearms that are customarily retained for personal use should
not be seized unless their value is such that a suit to foreclose
the Federal tax lien may be appropriately recommended. Certain
arms for personal use may be exempt from seizure. See
IRM
5.10.1.3.3.3(2).
3.
If firearms
for personal use are unexpectedly encountered during a seizure, CI
or TIGTA should be immediately contacted so they can respond to
the seizure location to advise the revenue officer of the
appropriate action to take and to provide protection for the
revenue officer at the time these items are handed over to the
taxpayer or his or her representative. These items should not be
listed on Form 2433 unless they are actually being seized.
4.
If firearms
are seized, the assistance of Criminal Investigation should be
sought in making a determination as to whether the arms are
contraband or subject to forfeiture under the Gun Control Act of
1968 or by virtue of state or local law. This action should be
taken prior to any disposition of the seized arms. See
IRM
5.10.4.5(14) for the procedures to release property when another
government agency becomes involved.
5.
After the
above actions have been taken, the sale of the firearms may be
conducted. The PALS must outsource the sale of firearms to an ATF
licensed auctioneer to ensure all firearm sale requirements are
met.
Exception:
Firearms that are primarily collector's
items, as described in IRC 5845, may be sold by the PALS at public
auction or sealed bid sale.
5.10.2.8 (10-01-2004)
Controlled Substances (Narcotics and Dangerous Drugs) or Drug
Paraphernalia
1.
Because of
the sensitive nature of these types of seizures, approval of the
area director is required.
2.
Drug
paraphernalia generally includes such items as pipes, syringes and
other devices designed to introduce drugs into the human body.
Drug paraphernalia that is not of a commercial use (wholesale or
retail merchandise) should not be seized.
3.
These
assets should not be seized unless they are the sole asset through
which collection can be enforced. Other avenues of collection,
such as levy on bank accounts or accounts receivable, or seizure
of vehicles, cash register contents, or furniture & fixtures
should be used prior to seizure of these assets.
4.
If other
assets will not satisfy the liabilities, a seizure may be made of
the controlled substances or drug paraphernalia. Area counsel will
be consulted before such material is seized.
5.
In no event
should drug paraphernalia be advertised or offered for sale until
the following actions are taken:
A.
Contact
local authorities to determine whether possession of such material
violates any local law — if possession is illegal, the material
should be released to those authorities.
B.
If
possession is not illegal or authorities refuse to accept the
material, refer the matter to area counsel for an opinion whether
administrative or judicial sale of such material is legal — area
counsel should be contacted for an opinion in any case where there
is a question whether the material seized is drug paraphernalia.
C.
Once area
counsel issues an opinion, submit a report to the area director
outlining all of the pertinent facts in the case, including the
alternative collection measures which were taken or explored prior
to seizure of such material and the results of the risk analysis.
6.
See
IRM
5.10.3.16 for instructions on the required actions to take to
dispose of controlled substances after they have been seized.
5.10.2.9 (10-01-2004)
Material Considered Obscene or Pornographic
1.
Because of
the nature of this type of seizure, the approval of the area
director is required. Other avenues of collection, such as levy on
bank accounts and/or accounts receivables, seizure of vehicles,
cash register contents, or furniture and fixtures, should be used
prior to seizing obscene or pornographic material.
2.
If other
assets will not satisfy the liabilities, a seizure may be made of
the obscene or pornographic material. Area counsel will be
consulted before such material is seized. In no event should the
material be advertised or offered for sale until the following
actions are taken:
A.
Contact
local authorities to determine whether possession of such material
violates any local law — if possession is illegal, the material
should be released to those authorities.
B.
If
possession is not illegal or authorities refuse to accept the
material, refer the matter to area counsel for an opinion whether
administrative or judicial sale of such material is legal — area
counsel should be contacted for an opinion in any case where there
is a question whether the material seized is obscene or
pornographic.
C.
Once area
counsel issues an opinion, submit a report to the area director
outlining all of the pertinent facts in the case, including the
alternative collection measures which were taken or explored prior
to seizure of such material and the results of the risk analysis.
5.10.2.10 (07-26-2000)
High Level Drug Dealers
1.
Service
personnel are not authorized to participate in arrests, raids and
similar activities with Drug Enforcement Administration (DEA)
personnel. However, revenue officers may take seizure action
against narcotics related taxpayers in connection with jeopardy or
termination assessments.
2.
Because of
the nature of this type of seizure, the approval of the area
director is required. Prior to making personal contact, the
provisions of
IRM
5.10.2.16.4, Armed Escorts, should be reviewed.
5.10.2.11 (10-01-2004)
Property With Environmental Considerations
1.
Several
types of establishments may have the potential for creating
employee safety issues and environmental concerns if they are
seized. Some of these types of businesses include:
·
Battery
charging and handling
operations
·
Laboratories
·
X-Ray
Equipment Facilities
·
Facilities
with Asbestos or Polychlorinated Biphenyls (PCB's)
·
Indoor
Firing
Ranges
·
Warehouses
storing hazardous or toxic materials
·
Photo
processing or graphic arts facilities
·
Printing,
etching, or plating plants
·
Welding and
sheet metal shops
·
Roofing
contractors
·
Auto repair
and paint shops
·
Waste
disposal facilities or incinerators
·
Lumber
yards and processing plants
2.
Before
seizing property from these types of commercial or industrial
operations, the following employee safety issues and environmental
factors should be considered:
A.
What were the past and current uses of the
property?
B.
Are any potentially asbestos-containing
materials evident?
C.
Were any chemicals or fuels handled at the site?
D.
Are there now, or have there ever been, any
underground storage tanks on the property?
E.
Are there electrical transformers, capacitors,
or other equipment that may contain PCB?
F.
Are there groundwater wells on the property, or
is the groundwater in the immediate area used as a source of
drinking water?
G.
Could the activities at adjacent businesses or
properties pose potential environmental risks?
H.
Is the property, or any of the adjacent
properties, on a federal, state, or local list of hazardous waste
or contaminated sites?
I.
Is the
property the subject of environmental litigation, regulatory
citations, or enforcement action?
3.
Some of the
indicators of potential environmental concerns are:
·
Chemicals
neatly stored and labeled
·
Obvious
physical signs of contamination, such as stained soil or concrete,
vegetation damage, foul or unusual odors, or oily sheens or
discoloration on the surface water on or around the property
·
Warning or
cautionary signs outlining some occupational or chemical hazard
·
Stored
chemical products with no information as to the contents
·
Spills of
unknown substances on the floor
·
Personal
protective equipment near employee work stations
4.
Prior to
seizing these types of establishments, employees should:
·
Take all
necessary safety precautions
·
Determine
if the disposal costs of the hazardous materials would exceed the
potential proceeds from the sale of the establishment's assets
5.
Take the
following actions if property is seized and environmental hazards
are discovered:
.
In the case
of the release, spill, or leak of any chemical products, including
liquids, gases, or solids, immediately contact the local hazardous
materials response authority, e.g. local fire department.
a.
Report the
incident immediately to the local
IRS
Safety Officer. A listing of local
IRS
area safety officers is available on the
IRS
Agency-Wide Shared Services (AWSS) website under Safety and
Security, REFM - Occupational Safety and Health.
b.
Refer to
IRM
1.14.5, Occupational Safety and Health Program, section 1.14.5.7,
Environmental Incident Reporting for additional reporting
instructions, particularly item 5, submitting Incident Form 9154.
5.10.2.12 (10-01-2004)
Cleared Contractor Facility
1.
In order to
mitigate the possibility of compromise of the "
classified" material, liaison has been established between
the Internal Revenue Service and the Defense Contract
Administration Services Region (DCASR).
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