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38.1.3.3
(08-11-2004)
Administrative Forfeitures
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Personal property may be administratively forfeited based on authority in Title 18, 26, or 31. The following subsections set
out the monetary limits on forfeitures under each of these titles, the contents of the memorandum to the SAC analyzing the
proposed forfeiture, and other procedures regarding administrative forfeitures.
38.1.3.3.1
(08-11-2004)
Monetary Limits
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Personal property valued at $500,000 or less may be administratively forfeited (provided no claim is filed) based on Title
18 or Title 31 authority. Personal property constituting monetary instruments, as defined in 31 U.S.C. § 5312(a)(3), can be
administratively forfeited without regard to value.
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Personal property valued at $100,000 or less may be administratively forfeited pursuant to Title 26 authority, provided no
claim and cost bond is filed.
38.1.3.3.2
(08-11-2004)
Counsel Review of Proposed Forfeiture
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Counsel’s role is to determine whether the evidence is legally sufficient to sustain the forfeiture and provide Criminal Investigation
policy and procedural guidance.
38.1.3.3.2.1
(08-11-2004)
Memorandum of Law and Fact
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Counsel should provide a law and fact memorandum to the SAC, Criminal Investigation, within 30 days after receipt of a complete
package from Criminal Investigation, unless legal action is required earlier. The purpose of the memorandum is to provide
a complete legal analysis and recommendation regarding the proposed forfeiture. See Exhibit 38.3.1-4 and Exhibit 38.3.1-5
at http://publish.no.irs.gov/getpdf.cgi?catnum=39139.
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The memorandum should discuss the facts of the seizure and should include a description of the nature and value of the property
seized, a description of the place(s) of seizure, the legal basis for the seizure and forfeiture, the sufficiency of the evidence
needed to sustain the forfeiture, and any applicable Constitutional issues (e.g., due process claims, excessive fines). A
copy of this memorandum with attachments should be sent to the Associate Chief Counsel (CT).
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The memorandum should advise the SAC that written notice is required to be provided to each person believed to have an interest
in the seized property not more than 60 days after seizure or after the identity of an interested party has been determined.
Notice is statutorily required for Titles 18 and 31. See 18 U.S.C. § 983(a). Further, the SAC must place an advertisement in a newspaper of general circulation in the geographic
area where the seizure was made once per week for three consecutive weeks. The advertisement must describe the seized property
and state when, where, why, and from whom it was seized. It should also advise that a claim for the property must be made
within 30 days of the last advertisement or 30 days of the first advertisement for Title 26 forfeitures. A copy of the advertisement
should be enclosed with each letter.
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Since these forfeitures are traditionally civil proceedings, it is the SAC’s responsibility to advise Counsel whether criminal
prosecution has been recommended or is contemplated in related cases. The memorandum should discuss how the proposed forfeiture
may affect criminal prosecution of such cases with a view towards advising whether the forfeiture proceedings should be stayed.
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The memorandum should request that the SAC notify Counsel if a claim (and cost bond for Title 26 forfeitures), a petition
for remission or mitigation of forfeiture, or an offer in compromise is received.
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The memorandum should also advise the SAC whether to execute a Declaration of Forfeiture 30 days after the date the advertisement
is last published (or first published for Title 26 forfeitures) to perfect the forfeiture.
38.1.3.3.3
(08-11-2004)
Inquiries Regarding Forfeiture
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Occasionally, the Criminal Tax attorney may receive a written inquiry submitted by, or on behalf of, the individual from whom
the property was seized and/or owned. The attorney should forward the inquiry to Criminal Investigation for appropriate response.
Criminal Investigation should inform the individual of the applicable forfeiture regulations at 19 U.S.C. § 1602 et seq., or 26 C.F.R. Part 403.
38.1.3.3.4
(08-11-2004)
Appraisals of Seized Property
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The Criminal Tax attorney should receive the appraisal information as part of the file and should insure the appraised value
of the property seized allows the Service to administratively forfeit the property. For Title 26 forfeitures only, IRC § 7325(1)
requires the Service obtain an appraisal by three sworn appraisers who reside within the geographic area served by the local
IRS office where the seizure was made.
38.1.3.3.5
(08-11-2004)
Authorizations, Timing, and Review Procedures for Title 26 Forfeitures
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In any case of a proposed forfeiture under IRC § 7301 or IRC § 7302 of nonwagering related property that does not solely concern
the filing of IRS Form 8300 regarding the receipt of more than $10,000 cash by a trade or business (i.e., violations not relating
to wagering excise tax violations under IRC §§ 4401, 4411, 4412), authorization must be obtained from the Associate Chief
Counsel (CT) prior to recommending forfeiture.
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In cases requiring approval by the Associate Chief Counsel (CT), a copy of the proposed law and fact memorandum and supporting
material, as appropriate, should be sent to the Associate Chief Counsel (CT) in a timely manner to ensure the final law and
fact memorandum is provided to the SAC within the 30 day time frame, unless legal action is required earlier.
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The Associate Chief Counsel (CT), with the assistance of Headquarters attorneys, will complete review the proposed memorandum
within three work days of receipt.
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If the Associate Chief Counsel (CT) approves the proposed forfeiture action, the submitting Criminal Tax attorney will be
notified of this decision in writing and authorized to send the memorandum to the SAC. A copy of this notification and authorization
will be sent by fax or other electronic means to the respective Area Counsel (CT). The law and fact memorandum should then
be signed by the Criminal Tax attorney or Area Counsel (CT), as appropriate.
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If the Associate Chief Counsel (CT) does not agree with the proposed forfeiture action, the respective Area Counsel (CT) will
be notified of the decision.
38.1.3.3.6
(08-11-2004)
Deficient Cases
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If a review of the evidence indicates a deficiency in the case, the Criminal Tax attorney should attempt to remedy it by contacting
Criminal Investigation to obtain additional evidence or information to meet the burden of proof.
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If the Criminal Tax attorney determines the case is not subject to cure, the law and fact memorandum to the SAC should outline
the problems and recommend the seized property be returned when no longer needed as evidence. In such cases, a waiver or indemnity
agreement between the Service and the owner of the seized property may be appropriate.
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Where property, such as books, records, and papers, will not be forfeited, such property should be retained for evidentiary
purposes only.
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Where property, such as drugs or contraband, has been seized by Criminal Investigation during the course of a raid, such property
should be turned over to the appropriate federal agency for disposition. With respect to illegal firearms, refer to current
policy on disposition of seized firearms.
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Attention should be given to potential search and seizure defects and self-incrimination assertions because the Fourth and
Fifth Amendments may be applicable to forfeitures. Note an illegal seizure may not result in the inability of the Government
to forfeit the property if the Government can independently establish probable cause for forfeiture.
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