IRM 5.10.2  Securing Approval for IRS Seizure Actions and Post-Approval Actions

• 5.10.2.1   General
• 5.10.2.2   Tangible Personal Property or Real Property (Other than Real Property Which is Rented) Used in the Trade or Business of an Individual Taxpayer
• 5.10.2.3   Mobile Homes
• 5.10.2.4   FCC Broadcasting Licenses
• 5.10.2.5   Historic Properties
• 5.10.2.6   Religious Organizations and Religious Freedom Restoration Act
• 5.10.2.7   Firearms
• 5.10.2.8   Controlled Substances (Narcotics and Dangerous Drugs) or Drug Paraphernalia
• 5.10.2.9   Material Considered Obscene or Pornographic
• 5.10.2.10   High Level Drug Dealers
• 5.10.2.11   Property With Environmental Considerations
• 5.10.2.12   Cleared Contractor Facility
• 5.10.2.13   Perishable Goods
• 5.10.2.14   Securing Managerial Approval of Seizure Actions
• 5.10.2.15   Judicial Approval for Principal Residence Seizures
• 5.10.2.16   Post-Approval Actions
• 5.10.2.17   Seizing Property Housing a United States Postal Service Facility
• 5.10.2.18   Contracting for Services
• 5.10.2.19   Lost or Stolen Form 6888
• Exhibit 5.10.2-1   Pre-Seizure Checklist and Approval Request Reference: 5.10.2.14
• Exhibit 5.10.2-2   Suit Narrative Report — Securing Judicial Approval for a Principal Residence Seizure Reference: 5.10.2.15

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).

2.       The Defense Industrial Security Program (DISP) requires a contractor participating in the program to safeguard "classified" material and to report the termination of business for any reason. The reporting of a closure is essential to the protection of the "classified " material. DCASR representatives will establish liaison with the Internal Revenue Service area directors whose offices lie within a DCAS region.

3.       Immediately upon the seizure of a firm, the revenue officer will ask a responsible officer or the owner if the firm:

·         Had been or is now a participant in the DISP

·         Is cleared to perform on classified government contracts

·         Is currently in possession of any classified material for an ongoing or terminated contract

4.       If a contractor answers yes to any of the above questions, immediate notice will be given to the Director of Industrial Security for the Defense Contract Administration Services Region having jurisdiction over the area. Notice may be given by either of the following methods:

·         Contacting the DCASR by telephone

·         Sending a copy of Form 2433, Notice of Seizure, to the DCASR

5.       If the place of business has been closed by the seizure, arrangements should be made to permit access to the premises by the DCASR representative.

6.       Any classified items that have been placed under seizure should be released to the DCASR representative upon presentation of official credentials. Form 668–E, Release of Levy, will be used.

5.10.2.13  (10-01-2004)
Perishable Goods

1.       Property may be determined to be perishable goods under IRC 6336 if either of the following conditions exist:

·         The property is liable to perish or become greatly reduced in price or value by keeping

·         The property cannot be kept without great expense

2.       Property that qualifies as perishable goods under IRC 6336 may be sold under IRC 6336 after it has been appraised and the owner has been given an opportunity to pay the appraised value or furnish bond for payment. If the owner does not pay, the property may be sold as soon as practicable. The time restrictions in IRC 6335 do not apply.

3.       If it is believed that the storage costs will be so excessive that the property meets the perishable goods criteria above, the revenue officer should provide documentation of all expected expenses and the minimum bid calculations reflecting the amount the Service would expect to recover from a regular sale.

4.       If it is expected that the value may become greatly reduced in price or value, the revenue officer must document why the loss is expected to occur.

5.       When revenue officers plan to seize property to which they believe IRC 6336 is applicable, they will appraise the property and confer with their group manager. It is recommended that the appraisal be conducted with the assistance of the PALS. The following information, in addition to the required information in IRM 5.10.2.14, will be furnished with the request for approval:

·         Name and address of taxpayer

·         Amount of the levy

·         Proposed date of seizure

·         Description of the property to be seized

·         Reason it is believed the property is a type to which IRC 6336 is applicable

·         Determination as to the appraised value of the property

·         Suggested time and place of sale

6.       The area director will make a determination as to whether the property seized is of a type to which IRC 6336 is applicable. If he or she determines the property is not perishable within the meaning of IRC 6336, he/she will inform the revenue officer and normal seizure and sale proceedings will be followed. If the area director agrees that the property is perishable, the area director will approve Form 668–B and advise the revenue officer to proceed.

7.       IRM 5.10.4.13 contains the procedures that must be followed for the sale of perishable goods. Perishable goods sales may still be conducted by the revenue officer; however it is recommended that the PALS conduct the sale whenever possible. If the PALS will be conducting the sale, coordination with the PALS during the approval process is essential for perishable goods seizures because of the expedited timeframes involved with the sale of this type of property.

5.10.2.14  (10-01-2004)
Securing Managerial Approval of Seizure Actions

1.       If all of the requirements of 5.10.1.3 through 5.10.1.5 have been met and it is determined that seizure is the appropriate case action, the revenue officer should enter the appropriate asset information into the ICS seizure application and then use the application to prepare the Pre-Seizure checksheet (Exhibit 5.10.2–1) and then Form 668–B. The revenue officer should review the IRM procedures for conducting the seizure to determine if any special circumstances will need to be addressed before the seizure is conducted. The revenue officer should also determine to whom the seizure documents must be delivered ( IRM 5.10.3.5(10) and IRM 5.10.3.18).

Note:

See IRM 5.10.2.15 for the procedures to follow when preparing to seize real property used as a principal residence by the taxpayer, taxpayer's spouse or former spouse, or taxpayer's minor children.

2.       The determination to seize and authority to sign Form 668–B, Levy, may be delegated to revenue officers GS-09 and above. Delegation authority for approving Form 668–B is included in SB/SE delegation order 5.1.

3.       The case file must contain adequate documentation to justify the seizure action. The following information must be included in a summarizing history entry or on a separate fact sheet:

·         Verification of the liability

·         Draft minimum bid

·         Discussion of alternatives that were considered

·         Results of risk analysis

·         Due process notification with appropriate forms and publications

·         Attempts to personally notify the taxpayer of proposed seizure

·         Whether a consent or writ will be required (see IRM 5.10.2.16.3)

4.       The case file should then be submitted for approval through the appropriate levels of management. The approval package should contain the following information:

·         Pre-Seizure Checklist (Exhibit 5.10.2–1)

·         Form 668–B (Pen and ink corrections need to be made on the reverse parts of form 668–B under Applicable Sections of the Internal Revenue Code, Section (f), (2) and (3); these corrections should reflect updated exemption amounts)

·         Form 4585 Draft Copy

·         NFTL Copies

·         Preliminary Form 2434–B

·         Case History/Fact Sheet

·         Any other relevant items, including to whom seizure documents must be delivered

Note:

The approval package should include an adequate description of the property that is to be seized. If real estate is being seized, the description should include information about whether the real estate is improved or unimproved property, whether there are commercial or residential structures on the property, whether or not any property is being used by any individual as a residence, and any other information that will allow the approving official to know exactly what type of property will be seized. This will help ensure the appropriate approval level is secured for the type of property being seized.

5.       All approvals must be written and will be retained with the case file. All Collection seizures will require a minimum approval level of the territory manager. The case file must be reviewed by an advisor in Technical Services for technical accuracy before it is forwarded to the territory manager for seizure approval. The revenue officer should work with Technical Services throughout the entire seizure process whenever there are questions regarding the appropriate technical procedures to follow on the case.

6.       The following seizures require approval by the area director unless collection of the tax is in jeopardy:

·         All personal residences, including property owned by the taxpayer and used by any other person as a principal residence, as well as those principal residences that will also require judicial approval

·         All tangible personal property, or real property, except real property which is rented, used in the trade or business of an individual taxpayer, including State Commercial Fishing or Wildlife Licenses

Caution:

If the property that is rented is used as a principal residence by any individual, area director approval must be secured.

·         Perishable goods determination/Perishable goods seizure

·         Contents of a personal residence, including items located in garages and other structures on the land on which the residence is located

·         Firearms

·         Controlled Substances and Drug Paraphernalia

·         Material Considered Obscene or Pornographic

7.       The approving official(s) and the revenue officer should attempt to resolve any questions regarding the seizure as quickly as possible. Communications should be verbal, rather than written, whenever possible. Delays in the approval process should be avoided so that the seizure action is taken while it is appropriate and while the case information is still current. If the seizure is not approved, the reasons must be documented and retained as part of the case file.

5.10.2.15  (10-01-2004)
Judicial Approval for Principal Residence Seizures

1.       Judicial approval is required for principal residence seizures. 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

2.       In most cases, seeking judicial approval of an administrative seizure and sale is the appropriate action to take rather than a suit recommendation for foreclosure of the lien. If there are issues related to ownership, nominee situations, collection statute concerns, or other items, then a suit recommendation to foreclose the Federal Tax Lien or a suit recommendation to reduce the tax claim to judgement may be the appropriate case action. Consult technical services or area counsel for further guidance if there are any questions as to which type of suit would be the appropriate case action. If all of the requirements of 5.10.1.3 through 5.10.1.5 have been met and it is determined that seizure is the appropriate case action, the revenue officer should prepare Form 668–B, a fact sheet, and the Pre-Seizure checksheet (Exhibit 5.10.2–1). See IRM 5.17.3.1.3.7.

3.       The fact sheet details the results of the investigation and contains the recommendation to seize the principal residence. It includes:

·         Information as to the type of property, including legal description of the property and current derivation clause (if required)

·         Information on the age and health of the occupants of the residence

·         Verification of the liability

·         Draft minimum bid

·         Discussion of alternatives that were considered

·         Results of risk analysis

·         Due process notification with appropriate forms and publications

·         Attempts to personally notify the taxpayer of proposed seizure

4.       The seizure recommendation package should be forwarded from the group manager, through Technical Services, and then through the appropriate levels of management up to the area director. The recommendation package should contain:

·         Pre-Seizure Checklist (Exhibit 5.10.2–1)

·         Form 668–B (Pen and ink corrections need to be made on the reverse parts of Form 668–B under Applicable Sections of the Internal Revenue Code, Section (f), (2) and (3); these corrections must reflect updated exemption amounts)

·         Form 4585 Draft Copy

·         NFTL Copies

·         Preliminary Form 2434–B

·         Copy of Deed to Property

·         Case History/Fact Sheet

·         Any other relevant items

5.       After the Form 668–B is approved by the area director, the revenue officer will need to prepare a suit package in order to refer the case through Technical Services and area counsel to the Department of Justice.

Note:

Since Form 668-B for the seizure, as well as Form 4477 for the suit, must both be signed by the area director, the revenue officer may submit both the seizure approval package and the suit package for simultaneous approval, or the revenue officer may wait until approval of the seizure package is received prior to preparing and submitting the suit package.

6.       The suit package should contain:

·         Form 4477, Civil Suit Recommendation

·         Form 4478, Civil Suit Checklist

·         Suit Narrative Report

·         Form 4479, Lien and Claimant Data — Civil Suit

·         Form 4480, Property Description — Civil Suit

7.       The suit narrative (Exhibit 5.10.2–2) should be prepared following the guidelines outlined in IRM 5.17.4.9, Proceeding to Seize a Principal Residence. The narrative begins with the taxpayer's name and address and is followed by the following sections:

·         Introduction

·         Body

·         Conclusion and Recommendation

8.       Each section is labeled and the paragraphs are all consecutively numbered throughout the narrative report. All information addressed or included in the narrative should be included as an exhibit in the suit. Required exhibits include:

·         Seizure Checklist

·         Approved Form 668–B (or Form 668-B for approval if submitting the seizure and suit package simultaneously)

·         Draft Form 4585, Minimum Bid Worksheet

·         Federal Tax Liens (Certified Copies)

9.       No seizure of a taxpayer's principal residence will be made until court approval has been obtained. If judicial approval is denied, the revenue officer will consult with Technical Services, and if appropriate, area counsel, to determine further case action.

10.   If the suit is approved, Counsel will forward the case to Department of Justice. The Service will file a petition with the court and will make an initial showing that:

·         The liability is due

·         The Service has complied with all legal/administrative requirements

·         There are no collection alternatives to the principal residence seizure

11.   The taxpayer will be served with an order to show cause why the residence should not be seized; if he/she files a response, a hearing will be held.

12.   Where the property to be seized is also the principal residence of the taxpayer's spouse, former spouse, or minor child, a "notice letter" will be sent to those parties informing them of the petition filed with the court and giving the number/address of the clerk of the court, if they wish to learn the date and location of the hearing.

Note:

These individuals will not be parties to the proceeding. Only the taxpayer will have an opportunity to be heard at the hearing.

13.   This notice letter also instructs the addressee to contact the revenue officer assigned the case to provide any other relevant information the Service should consider before seeking the seizure. The revenue officer should be prepared to pass along any such information that is received to the trial attorney assigned the case so the information can be included in the trial attorney's declaration or supplementary declaration.

5.10.2.16  (10-01-2004)
Post-Approval Actions

1.       After securing approval for the seizure, the revenue officer must then begin planning for the actual seizure by determining when the seizure will be conducted. Coordination with the PALS is required at this point so that there will be a smooth transfer of custody of the property after the revenue officer has conducted the seizure. The revenue officer must determine:

·         How many assisting employees will be needed and how the property will be inventoried

·         What equipment will be necessary

·         If all necessary forms have been prepared

·         Whether a consent or writ is required

·         What arrangements need to be made for the transportation and storage of the assets

·         Whether an armed escort will be required

2.       Having the appropriate number of employees present for a seizure is important. At least one other Service employee is required for a seizure. Additional employees may be required depending on many factors, such as:

·         The type and quantity of assets

·         Complexity of inventory

·         Degree of cooperation from the taxpayer

·         Landlord/vendor/utility issues

·         Need for removal and storage of assets

3.       In outlying offices where only one revenue officer is stationed, a revenue agent from the same location may assist with the seizure if approval is secured from the revenue agent's manager.

4.       If the use of an assisting Service employee is not feasible, the territory manager can approve the use of a local, state, or federal law enforcement officer. The non-Service employee has no authority to assist in the seizure and is used as an observer only. The case history must be documented with the circumstances leading to the use of a non-Service witness. The revenue officer must record the name, title, badge number, and other identifying information of the law enforcement officer.

5.       The assisting employees should be briefed on:

·         The background of the case

·         Inventory issues

·         Transportation and storage plans for the assets

·         Potential for conflict

·         Any other factors relevant to the seizure

6.       The PALS may also provide assistance at the seizure for issues related to lotting, moving and securing the property, but not for the actual seizure action.

7.       If tenant occupied property is involved in the seizure, the revenue officer will take whatever steps are necessary to ensure that innocent third parties are not financially injured by the seizure action. Of equal concern should be consideration for the safety and welfare of innocent third parties, as well as livestock and domestic animals.

5.10.2.16.1  (10-01-2004)
Necessary Equipment

1.       Planning for and having all of the necessary equipment available to make the seizure is an important step in the pre-planning process in order to ensure that the seizure runs as smoothly as possible.

2.       Prior to a seizure that will involve an extensive inventory, the revenue officer should inspect the property location to determine the:

·         Availability of water, electricity, or other needed utilities

·         Heat or air conditioning needs

·         Potential health hazards

·         Presence of an alarm system

·         Need for any other items or services unique to the location

3.       Depending on the type of assets being seized, the following equipment may be useful:

·         Hand tools, such as hammer, screwdrivers, pliers, and bolt cutters

·         Chains and locks to secure gates and storage units

·         Scissors, tape, markers, paper, warning tags

·         Flashlights

·         Mobile or cellular phones

5.10.2.16.2  (10-01-2004)
Necessary Forms

1.       The revenue officer should ensure that all necessary forms are completed or available. The revenue officer should have the following forms available:

·         Approved Form 668–B, Levy

·         Consent, or Writ of Entry (if already secured)

·         Form 2433, Notice of Seizure

·         Form 911, Application for Taxpayer Assistance Order

·         Publication 1660, Collection Appeal Rights

·         Form 668–A if the property is in the possession of a third party

·         Warning tags (Forms 12911, 12912, or 12913)

·         Form 6888, US Government Purchase Order or Government BankCard

5.10.2.16.3  (10-01-2004)
Determining if a Consent or Writ is Required

1.       The Supreme Court of the United States held in G.M. Leasing v. United States, 429 U.S. 338 (1977) that an entry without a warrant onto the private areas of personal or business premises of a taxpayer for the purpose of seizing property to satisfy a tax liability is in violation of the Fourth Amendment to the Constitution of the United States. The revenue officer must determine if a Consent or Writ will be required prior to making the seizure. See IRM 5.17.4.13.

2.       Before entering into a private area, the revenue officer must secure either:

·         Written consent ( IRM 5.10.3.2) from the rightful occupant

·         A court order (writ) ( IRM 5.10.3.4) permitting entry

3.       The revenue officer must determine if the assets are located in a private area. Some common characteristics of a private area include:

·         No accessibility to the general public

·         Posted signs and warnings against entry

·         Employee access only

·         Areas with an expectation of privacy

·         Covered or attached areas

·         Areas behind counters

·         Those where the revenue officer has any suspicion or question as to the expectation of privacy

4.       Examples of the most common private areas include:

·         Restaurant kitchen areas

·         Service departments

·         Private self-storage facilities

·         Garages and other attached or unattached structures

·         Product storage areas for retail establishments

·         Manufacturing plant production properties

·         Fenced properties

·         Cash registers

·         Safe deposit boxes

·         Company office areas

5.       Generally, in situations involving seizure of assets located on private premises, Consent to Enter will first be sought from the taxpayer or rightful occupant, as applicable. Only after consent has been denied will the revenue officer request a Writ of Entry. Case file documentation is extremely important, especially when there are exceptions to this provision. Exceptions are limited to the following situations:

·         When it is believed that advance notice will jeopardize the safety of the revenue officer(s)

·         When attempts to contact the taxpayer or rightful occupant fail

·         When there are other unforeseen circumstances

6.       In situations where it is believed that the taxpayer may try to place assets beyond the reach of the Service, or if the taxpayer has previously placed assets beyond the Service's grasp after having been forewarned of enforced collection by the consent request, a Writ of Entry ( IRM 5.10.3.4) should be sought without attempting consent procedures. The affidavit furnished the court must state the reason why an attempt to secure consent would compromise collection efforts.

7.       In situations where consent is not being sought prior to requesting a Writ of Entry, concurrence by the level of management above the group manager is required. This authority should be used in extremely rare circumstances. The mere loss of the element of surprise will generally not be sufficient cause to justify an exception.

8.       A Writ of Entry is not a search warrant nor its equivalent. A search warrant cannot be issued to a revenue officer authorizing entry upon private premises to search for property to be seized for distraint purposes.

5.10.2.16.3.1  (10-01-2004)
Contents of Residence — Consent or Writ Required

1.       A Consent to Enter private premises or a Writ of Entry must be obtained before seizing any assets considered the contents of residence, and these seizures must be approved by the area director. The taxpayer's reasonable expectation of privacy extends to areas and buildings close to the residence. Thus, the definition of "contents of residence" includes items located in garages and other structures on the land on which the principal residence is located.

2.       Revenue officers need to consider a taxpayer's reasonable expectation of privacy when seizing the contents of a residence. Consultation with area counsel, through Technical Services, is necessary if doubt exists as to whether a Writ of Entry is required.

5.10.2.16.3.2  (10-01-2004)
Motor Vehicles — Determining if Consent or Writ is Required

1.       When a motor vehicle is being seized, a Consent or Writ is not required if the motor vehicle is parked in any of the following locations:

·         On public property, such as a street, state, or county road

·         In an unobstructed driveway or front yard

·         On an unsupervised portion of a third party's premises which is accessible to the general public when the premises are accessible to the general public

2.       If there is any obstruction, such as a fence, chain, or rope, which would indicate that entry onto the driveway or front yard would constitute an invasion of the taxpayer's privacy, a consent or writ is required. In addition, the vehicle must not be enclosed by any structure, such as a garage or carport.

5.10.2.16.4  (10-01-2004)
Armed Escorts

1.       Revenue officers are not authorized to carry or use firearms or secondary weapons, such as mace or pepper spray, and must be alert to situations that may call for the use of an armed escort. Employee safety is the number one priority. A revenue officer should request an armed escort when there is a fear or concern for personal safety or if circumstances develop where the employee feels threatened.

2.       Criminal Investigation (CI) has information on designated problem or high crime areas in each area.

3.       The revenue officer should advise the group manager of the circumstances involved. If the manager determines that the use of an escort is justified, the revenue officer should request the assistance of CI by taking the following actions:

A.      Prepare a memorandum to the Special Agent in Charge detailing the facts and circumstances.

B.      Route the memorandum through the territory manager so that CI will receive it at least three business days prior to the date the armed escort is needed.

C.      Jointly prepare a plan of action once contacted by the assigned special agent.

5.10.2.17  (10-01-2004)
Seizing Property Housing a United States Postal Service Facility

1.       Before seizing property housing a United States Postal Service facility:

A.      Advise the nearest postal inspector of the contemplated action.

B.      Discuss the effect of the seizure with the postal inspector.

C.      Make every effort to avoid interfering with continued postal service to the public during the seizure and sale of the property.

5.10.2.18  (10-01-2004)
Contracting for Services

1.       Estimated seizure related expenses should have been determined with input from the PALS during the preparation of the draft minimum bid prior to submitting the case for approval. ( IRM 5.10.1.3.3.1 and IRM 5.10.4.6). Once the seizure has been approved, the revenue officer should begin contracting for the seizure related expenses.

2.       The revenue officer, with input from the PALS and Technical Services or area counsel when necessary, should have determined in the pre-approval stage whether the property will have to be removed from its location and stored at another facility ( IRM 5.10.1.3.3.1). Whenever possible, revenue officers and PALS should use blanket purchase agreements (BPAs) or other contracts arranged by the procurement officer to obtain seizure-related services (e.g., towing, storage, and locksmith services). BPA's are contracts negotiated by a procurement officer. The advantages of a BPA are:

A.      There is a set price, usually at the lowest rate available.

B.      The vendor bills the Service through the contracting office.

3.       Revenue Officers, GS-09 and above, and PALS are authorized by the Director, Procurement (Delegation Order No. 106, as revised, of IRM 1.2.2, Delegations of Authority) to procure seizure related services with the following restrictions:

A.      Procurement authority is limited to $2,500 per service.

B.      Form 6888, U.S. Government Purchase Order—Invoice Voucher, or the Government Bankcard must be used for such purchases (PALS may also use the convenience checks that they have been issued).

C.      There must be sufficient funds reserved to cover the cost of the service(s); management must establish a system to ensure that funds are available prior to the revenue officer or PALS contracting for a service.

4.       Revenue officers and PALS can contract for seizure services where total expenses exceed $2,500 as long as the cost of a single service does not exceed that figure. For example, separate Forms 6888 or Government BankCard purchases can be used to contract for a $500 locksmith service, $2,000 storage, and a $200 towing charge, as long as all services are billed separately.

5.       IRM section 5.10.3.7 contains the instructions for the use and preparation of Form 6888. Form 6888 should only be used if the vendor will not accept the Government Bankcard or convenience checks.

6.       Form 6888, the Government BankCard, and convenience checks cannot be used when the cost exceeds $2,500 for a single service. If the seizure related service will cost more than $2,500, compile the information necessary to justify the expense and submit the request through the Requisition Tracking System (RTS) so the contracting officer can contract for the service through normal procurement channels. If a BPA is possible for a service exceeding $2,500, immediately contact the contracting officer to get the necessary competition or sole-source justification.

7.       Normally three estimates for service should be secured before submitting an RTS requisition. Some situations require a sole source justification if only one vendor is available. Some examples where sole source justification should be considered are:

·         When there is only one vendor for a particular service in a rural area

·         Assets are being stored where the property was seized and the landlord has agreed to a rental amount

·         A special situation exists for a specific service that only a particular vendor can provide

8.       If after contracting for a service, emergency situations are encountered or unanticipated costs or delays in the sale would increase the total cost, a requisition must be submitted to the contracting officer for procurement action.

9.       The requisition to the contracting officer must have the following information:

·         A full description of the items or services required

·         The cost of the items and services

·         The vendor's name, address, and telephone number

·         A signed narrative, explaining the circumstances which precluded the revenue officer from obtaining prior contracting officer approval

10.   Emergency contracting situations should be extremely rare since ratification of procurements in such situations must be approved by the Assistant Secretary (Administration) at Treasury and could subject the person making an unauthorized procurement to disciplinary action.

5.10.2.19  (10-01-2004)
Lost or Stolen Form 6888

1.       If a Form 6888 book, individual Form 6888, or a portion of any Form 6888 is lost or stolen, the revenue officer must prepare a report to the territory manager or the PALS will prepare a report to his or her manager. The report should contain the following information:

·         Name and post of duty of the employee to whom the Forms 6888 were assigned

·         Order number of missing Forms 6888

·         Date Forms 6888 were lost or stolen

·         A brief statement of circumstances surrounding the loss or theft

·         A statement of action taken to recover the receipts

2.       The territory manager or manager of the PALS will immediately notify the controller responsible for that territory by transmitting to them the report referred to in (1) above. The notification will ensure that the controller does not make any payment on lost or stolen Form 6888's. It is recommended that the controller be notified immediately by telephone, followed by the above report.

3.       If the lost or stolen Form 6888's are later recovered, the territory manager or the manager of the PALS and the appropriate controller should be notified promptly. The necessary identifying information, i.e., numbers, date reported lost or stolen, etc. should be provided to them.

4.       If Form 6888's are issued to revenue officers or PALS, their managers should review Form 6888 books during performance reviews in order to account for all Forms 6888.

Exhibit 5.10.2-1  (10-01-2004)
Pre-Seizure Checklist and Approval Request Reference: 5.10.2.14

Exhibit 5.10.2-2  (10-01-2004)
Suit Narrative Report — Securing Judicial Approval for a Principal Residence Seizure Reference: 5.10.2.15

The format of the revenue officer's suit narrative report is much the same as in other suit narrative reports. The report begins with the taxpayer's name and address, followed by three sections made up of:

·         An introduction

·         A body

·         A conclusion and recommendation

Each section is labeled and subject paragraphs are numbered from one and continue in order throughout the narrative report. Information addressed or included in the fact sheet prepared for the initial seizure approval can be included as an exhibit and referenced in this narrative.

Include the following information in the suit narrative report in the paragraphs in the Introduction:

·         A request for institution of civil action for judicial approval of a principal residence seizure

·         The amount of money expected as the net sale proceeds

·         The type of tax and current outstanding balance

·         The collection statute expiration date (CSED) for all modules

·         A statement of administrative actions taken or the reason why specific administrative actions were not taken

·         Refer to the fact sheet exhibit to address all alternative collection methods considered and the reason they were not used

·         The need for urgent action if required

Note:

Civil action for principal residence seizure approval is not designated for Settlement Option Procedures.

The Body is presented as a chronological presentation of the facts. The facts should be documented with and supported by exhibits. Include the following information in the suit narrative body paragraphs:

·         A brief description of the taxpayer, to include:

o        Age

o        Health

o        Marital status

o        Occupation

o        Tax payment history and other factors which have a bearing on the case

·         Who the occupants are, to include:

o        Name(s)

o        Relationship(s) to the taxpayer

o        Brief history

o        Current mailing address of the occupant(s) of the principal residence

·         Verification of the liability to include:

o        Basis

o        Date

o        Timeliness of the assessment

·         Date of notice and demand for payment and lien filing information for all modules

·         A summary of the relevant issues raised in prior IRC section 6320 and 6330 hearings

·         The accurate, legal description of the property

·         Any denial of ownership interest or evidence of such provided by the taxpayer or third party

·         A description of anyone else's interest in the property

·         Sufficient information to establish that all legal and procedural requirements relevant to the proposed seizure have been met, including IRC section 6331(j) requirements

·         A brief summary to identify any related cases

·         Documentation to demonstrate proper administrative approval secured

The Conclusion and Recommendation is the closing for the report. Include the following information in the suit narrative report conclusion and recommendation section:

·         A brief summarization and statement as to the recommendation for a principal residence seizure