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Part 5. Collecting Process

Chapter 10. Seizure and Sale

Section 3. Conducting the Seizure

5.10.3  Conducting the Seizure

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 Property Appraisal and Liquidation Specialist (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 (see IRM 5.10.3.5.1, Management Review Process and Taxpayer Appeal Rights for additional information on taxpayer rights during the seizure process).

5.10.3.2  (01-22-2008)
Conducting the Seizure — Securing Consent

  1. If the property to be seized is located on private premises, either the written consent of the premise's rightful occupant (see IRM 5.10.3.2(3), Conducting the Seizure - Securing Consent) or a Writ of Entry is required to enter the 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 secure the appropriate written consent. The revenue officer should explain that:

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

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

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

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

    5. 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 revenue officer should contact the rightful occupant (e.g., the taxpayer), by mail or telephone, and request that the rightful owner 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. Copies of the Consent will be distributed as follows:

    • A copy of the Consent will be provided to the person who signed it

    • The original will be forwarded to Advisory through the group manager within 5 workdays after the seizure

    • A copy will be retained with the case file

    • A copy will be forwarded to the PALS when custody of the property is transferred (see IRM 5.10.3.20, Transfer of Custody to PALS)

  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 (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  (01-22-2008)
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

    • Description of the premises to be entered

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

  5. If the revenue officer has reason to believe that property of the taxpayer is on the premises that he or she wishes to enter but is unsure of precisely what property is located on the premises, contact area counsel to discuss how to describe the property to be seized.

  6. The completed affidavit and data sheet will be forwarded through the group manager to Advisory 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 need to be present in order to answer questions the Judge or Magistrate may ask concerning the seizure.

    Note:

    Ensure the PALS is aware of the pending application for writ of entry so timely transfer of the property can take place after the writ of entry is received.

  7. As soon as the Writ of Entry is received, the revenue officer will notify the PALS and proceed with the seizure. 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. If the premises to be entered may potentially be locked, the revenue officer should take the following actions.

    1. If possible, attempt to schedule the seizure at a time when the premises are expected to be open.

    2. If there are no known times when the premises are expected to be open, attempt to contact the taxpayer to advise him/her that the writ has been received and to make arrangements to meet at the premises to gain entry.

    3. If the taxpayer refuses or does not respond, take the necessary action, such as securing the services of a locksmith, to enter the premises.

  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.

5.10.3.4.1  (01-22-2008)
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 whether 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  (01-22-2008)
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 with Form 668-A at the time of the seizure. Copies of the writ will be distributed as follows:

    • Forward a copy to Advisory through the group manager within 5 workdays after the seizure

    • Retain a copy for the case file

    • Send a copy to area counsel

    • Give a copy to the PALS at the time the transfer of custody of the seized assets is completed.

  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:

    1. Ask the taxpayer or the taxpayer's employee in charge of the property to advise the employees and customers to leave the premises.

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

    3. 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 Advisory for additional instructions.

  7. If the taxpayer claims a hardship situation, 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), Management Review Process and Taxpayer Appeal Rights, for the procedures to follow if the taxpayer does claims a hardship and the revenue officer will not or cannot provide the relief requested. Any further enforcement action must be withheld during the Taxpayer Advocate Service (TAS) review (see IRM 13.1.7, Taxpayer Advocate Service (TAS) Case Criteria, for other situations that qualify for TAS referral and the appropriate procedures to follow).

  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, Rescue).

  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 Advisory within 5 work days after the seizure is conducted.

  12. When personal 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.

    Note:

    If the Taxpayer Identification Number (TIN) is not needed by the third party to identify the asset, redact the TIN from information from Part 4 of Form 668-B and on Form 668-A. Do not redact the TIN on Parts 1, 2, or 3 of Form 668-B.

  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 5.11.2.1.9, Refusal to Comply with a Levy.

5.10.3.5.1  (01-22-2008)
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 Service (TAS) 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 ten 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, Collection Appeal Rights). 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 a hardship as a result of a seizure or proposed seizure action, the revenue officer should determine if the seizure action should continue (see IRM 13.1.7, Taxpayer Advocate Service (TAS) Case Criteria, for other situations that qualify for TAS referral and the appropriate procedures to follow).

  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, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance Order. 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 one workday of identifying that the contact potentially meets TAS criteria.

  7. Further collection actions are suspended until the hardship is resolved by the TAS Office. See IRM 13.1.7, Taxpayer Advocate Service (TAS) Case Criteria, for TAS criteria and procedures.

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

  1. After Form 668–B has been served, the revenue officer and/or PALS should sign the appropriate warning notices (Forms 12911, 12912, or 12913) and attach them to the property being seized for identification. The name and phone number of the PALS who will conduct the sale and the revenue officer who conducted the seizure should both be included on the warning notices.

  2. Prior contact with vendors should have been made so that the vendor is available on the day of the seizure. It is inappropriate for the vendor to arrive before the revenue officer makes the seizure and secures the property. This is necessary to avoid unnecessary expenses in case a problem occurs with the seizure or if the taxpayer pays the liability. After the 668–B has been delivered, the revenue officer should contact the vendor. If available, a cell phone should be used so the revenue officer does not have to leave the seizure site. See IRM 5.10.3.7, Payments to Vendors for Services Less Than or Equal to $2,500, and 5.10.3.8, "Not to Exceed" and Actual Costs, for instructions regarding payments to vendors.

  3. Unless the real estate housing the seized assets has also been seized, neither padlocking nor placing seizure warning tags on the premises is appropriate. See IRM 5.10.1.3.3.1(7) and (8), Equity Determination - Expenses of Sale, for the procedures that should be followed in order to make the appropriate arrangements in these situations.

  4. When real estate alone is seized, neither padlocking the premises nor changing the locks is appropriate, as possession of the real property remains with the owner or tenant until sale or redemption occurs. If the seizure involves unimproved real estate, a warning notice is not required to be posted.

  5. If the taxpayer's entire business with many assets is being seized, warning notices should be attached to clearly identify the property under seizure.

  6. While the procedures outlined above apply in the typical situation involving seizure of business property, there is no need to post a warning notice on any seizure when that action would increase the prospects of violence or, for other reasons, would be imprudent. Non-posting of the warning notice in such instances has no effect on the legitimacy of the seizure action taken. The reasons for non-posting will be documented in the case file.

  7. The taxpayer's employees are allowed to remove their personal property and the taxpayer may remove business books and records without revenue officer inspection. If examination of the books and records is necessary in a particular case, the revenue officer should consult area counsel to determine whether the issuance of an administrative summons is desirable.

  8. If a taxpayer seeks personal items in a seized vehicle or business premises, advise the taxpayer that re-entering the seized property to recover the personal items is not permitted. The revenue officer and witnessing employee should personally remove the items and return them to the taxpayer after the taxpayer signs Form 668–E, Release of Levy. The provisions in IRM 5.10.4.5(11), Actions to Release and Return Property, are to be followed when the taxpayer refuses to sign Form 668–E.

  9. After attaching the warning notices, the revenue officer should begin to inventory the property under seizure. The PALS may assist with the inventory of the property but may not assist in the actual seizure.

  10. When guards have been hired (IRM 5.10.1.3.3.1(10), Equity Determination - Expenses of Sale), they should be apprised of the possibility of harassment or violence. In the majority of cases however, satisfactory protection can be ensured by notifying the local police of the seizure and requesting their cooperation in protecting the property. Revenue officers and PALS may also conduct periodic visits to the seizure location to ensure the security of the assets and to determine if any assets have been lost, stolen, or tampered with.

  11. The aid of the taxpayer should be requested to take all necessary precautions (e.g., turn off water pumps, non-essential equipment, motors, etc.) to secure the property. If the premises must be checked periodically to protect the property, the revenue officer or PALS should make such arrangements.

5.10.3.6.1  (01-22-2008)
Controlling Seized Property Stored in IRS Offices

  1. When seized items are stored in an IRS office, the revenue officer or PALS will prepare a signed memorandum to his or her manager identifying the property. It will state the determined value of the property and the approximate amount of time the property is to be stored.

  2. The revenue officer or PALS and another Service employee designated by the territory manager will both sign a certification on this memorandum to the effect that the property was placed in a safe or cabinet with the name or number and location.

  3. When custody of the property is transferred to the PALS, a copy of this memorandum (if prepared by the revenue officer) should be provided to the PALS.

  4. Seized property must be safeguarded in facilities commensurate with the standards in IRM 1.16.15, Minimum Protection Standards. Local procedures for safeguarding such property should include periodic verification checks of the property in the container by a designated official.

  5. When the property is disposed of, the revenue officer or PALS will update the memorandum with date of disposition, manner of disposition, etc. The manager will concur by initialing the memorandum and will forward the memorandum to Advisory for inclusion in the seizure file.

5.10.3.6.2  (10-01-2004)
Service and Repair Establishments

  1. Business establishments, such as dry cleaners, laundries, and repair shops, contain property belonging to customers. Revenue officers conducting such seizures must make arrangements for customers to claim their property.

  2. A notice should be posted on the front door of the business indicating the hours the premises will be open for customers to claim their property. The establishment should be opened for sufficient periods so that third parties are not overly inconvenienced.

  3. The revenue officer, with group manager concurrence, will determine the hours the business will be open based on such factors as amount of property to be claimed, location of the business and the usual hours the business was open to the public. If the taxpayer's business hours extended beyond normal IRS work hours, the establishment should be opened some portions of the non-IRS work hours. For example, if Saturday operation was customary, consideration should be given to providing at least some Saturday hours.

  4. Revenue officers should make reasonable attempts to contact customers on any item with customer identifying information if the item is not claimed. In no event should items clearly identified as a customer's property be sold.

  5. The revenue officer and the PALS should coordinate the transfer of custody of the assets so customers have adequate time to claim their assets.

5.10.3.6.3  (01-22-2008)
Records of Attorneys, Physicians, and Accountants

  1. Records maintained by attorneys, physicians, and accountants concerning professional services performed for clients are usually of little intrinsic value and possess minimum sale value.

  2. Questions of confidential or privileged information contained in these records may cause complications if the records are seized. Additionally, the case files of the professional person are frequently the property of the client, and therefore are not subject to seizure.

  3. Accordingly, it is not desirable to seize case files or records for payment of the taxpayer's tax liabilities. When office facilities or office equipment of attorneys, physicians, or public accountants are seized for payment of taxes, case files and related files in seized office facilities or office equipment of such persons will not be personally examined by the revenue officer, and the taxpayer should be asked to promptly remove all case files.

  4. If it is believed that the storage facilities, such as file cabinets, contain valuable property in addition to case files, the contents may also be seized but, as soon as possible, the case files should be released to the taxpayer. The revenue officer should be present when the taxpayer segregates the files so that other property of value is not taken by the taxpayer.

  5. A supplemental notice of seizure should be issued describing the contents that remain under seizure. Form 668–E should be issued for any property released back to the taxpayer. After the contents have been removed, the storage facilities (cabinets, etc.) may be sold at public sale in accordance with regular sale procedures.

  6. If the taxpayer does not remove the files as requested, the case files will be removed intact by the revenue officer. Another Service employee should also be present at time of removal. Under no circumstances will case files be examined. The files will be placed in boxes and securely bound. Each box will be identified by name of taxpayer and date removed from files. If the premises are not also under seizure, the boxes will be left on the business premises. If the business premises are under seizure, the boxes will be removed for storage at the local IRS Office.

  7. When files are removed for storage, the revenue officer should take the appropriate steps to ensure the security of the case files, and if possible, the files should be maintained in locked facilities. The revenue officer will document the fact that the case files were not examined and this statement will also be signed by the other employee who was present at the time the files were removed. If case file boxes are removed for storage, the taxpayer should be notified within 48 hours, by certified mail, return receipt requested, that the files must be claimed within 30 days from date of notice. If not claimed within the prescribed period, area counsel should be asked to provide instructions.

5.10.3.6.4  (10-01-2004)
Seizures Involving Computer Equipment

  1. IRM 5.10.1.3.3.5, Equity Determination - Computer Equipment, contains the pre-seizure guidelines that should be followed when determining whether to seize computer equipment. All taxpayer data that is on the hard drive must be removed prior to selling the equipment at public auction.

  2. Once the property is seized, the taxpayer must be given an opportunity to download the data from the hard drive before it is eliminated by the PALS prior to sale. The taxpayer should also be advised that the Service will remove all of the information from the hard drive, even if the taxpayer does not download the data.

  3. Document the case history when you advise the taxpayer of the need to download the information. The revenue officer or PALS (or both employees) may make this request. Exhibit 5.10.3–10, Taxpayer/Responsible Officer's Acknowledgment of Opportunity to Download Computer Information, should be used to document the fact that the taxpayer was given the opportunity to download the information. A copy of this document should be maintained in the seizure file.

  4. The PALS should:

    • Ensure that the taxpayer has been given the opportunity to download the information

    • Take the appropriate action to eliminate all of the information from the hard drive as close to the scheduled sale date as possible

      Note:

      This should allow the taxpayer to receive the equipment back in the same condition as it was when it was seized if the property is released or redeemed prior to sale.

  5. Only the PALS are authorized to use the WipeDisk to remove all of the material from the hard drive. Licensed software that can be sold with the computer should be reloaded to the hard drive whenever possible so that the value of the equipment is preserved. Consult with area counsel on any software licensing questions.

5.10.3.7  (10-01-2004)
Payment to Vendors for Services Less Than or Equal to $2,500

  1. For purchases less than or equal to $2,500.00, payment must be made under one of the following methods:

    • Government BankCard (IRM 5.10.3.7.1, Government BankCard and Convenience Checks)

    • Convenience Checks (PALS use only)

    • Form 6888, U.S. Government Purchase Order — Invoice Voucher (IRM 5.10.3.7.2, Form 6888 Procedures)

  2. Federal procurement regulations require written confirmation of the cost of a service.

  3. Services that exceed $2,500.00 require a purchase order through procurement channels and the request must be submitted through the Request Tracking System (RTS) for funding by the local budget office. IRM 5.10.2.18, Contracting for Services, contains the procedures to follow when services will exceed the authorized limit.

  4. Prior to incurring any expense, the revenue officer or PALS must ensure that there are sufficient funds available to satisfy the expected expenses. If the expenses are expected to exceed the available amount, additional funding should be secured prior to incurring the expense.

5.10.3.7.1  (01-22-2008)
Government BankCard and Convenience Checks

  1. The preferred method for procuring seizure and related services under $2,500.00 is through the use of the Government BankCard. Each local area budget office has entered a bulk commitment into the RTS for estimated BankCard services.

  2. If the revenue officer or PALS uses the Government BankCard or convenience checks for locksmith or towing services, he or she must provide the vendor a copy of Form 13857, Indemnification of Locksmiths and Tow Truck Operators. The vendor must sign and date Form 13857 to acknowledge receipt. The vendor must be provided a signed copy and the original must be retained with the other supporting documentation for the transaction.

  3. When the revenue officer or PALS makes a purchase with the U.S. Government BankCard or convenience checks, he or she will receive a monthly statement of account for reconciliation and certification. After receiving the statement, the revenue officer or PALS will take the following actions:

    1. Reconcile expenditure receipts to the statement.

    2. Annotate the statement with the seizure number, type of service or item purchased, and the vendor's TIN.

    3. Sign and date the statement.

    4. Forward to the approving manager within 5 calendar days to ensure prompt payment of vendors.

  4. The appropriate CQ document identification number for each spending office should be referenced on all BankCard statements. This number can be found in the Management and Finance Handbook — Financial Operating Policies and Guidelines.

  5. Additional information on the use of the Government BankCard can be found in Document Number 9185, Purchase Card Guide.

  6. For services procured by the Government BankCard or convenience checks, the RO or PALS will submit a copy of the vendor's bill for each service rendered as part of the closing documents submitted to Advisory.

5.10.3.7.2  (01-22-2008)
Form 6888 Procedures

  1. Area compliance management is responsible for controlling and issuing Form 6888, U.S. Government Purchase Order-Invoice-Voucher to revenue officers and PALS. The books contain instructions for completing and processing the appropriate parts. Additionally, the book contains a "record of purchases" which must be completed every time a Form 6888 is issued. The revenue officer or PALS must ensure that the Form 6888 is properly completed so that it can be processed for payment.

  2. Care must be taken in completing the Form 6888 to ensure that the writing is legible. Enough pressure must be used to ensure that the necessary information can be read on all of the copies.

  3. The "Taxpayer Identification Number" and " Indemnification of Locksmiths and/or Tow Truck Operators" clauses are shown on the reverse side of the Form 6888 and should be pointed out to the contractor when services are required. The "Taxpayer Identification Number" (TIN) clause requires the contractor to include his or her Social Security Number (for individuals) or employer identification number (for other entities) on invoices. Contractors who furnish services must include their TIN in the block entitled "Payee" on the front side of Form 6888.

  4. The following information should be entered on Form 6888:

    • Date of Order — Date that you ordered the goods/services

    • Order Number — Number with which to identify the vendor's invoice

    • Payee — Vendor's full name, address, and TIN

    • Furnish Supplies or Services To — Name, address, and telephone number of the employee contracting for the services (revenue officer or PALS)

    • Supplies or Services Description — Description of the goods/services; date the goods/services were received; quantity, unit price, amount; enter the requisition document ID (provided for bulk estimate of 6888s) on the last line of this block

    • Total and Discount Terms — Total to be paid and any applicable discount terms; the total is the amount the employee is authorizing to be paid

    • IRS Billing Address:
      Internal Revenue Service
      Beckley Finance Center
      P. O. Box 9002
      Beckley, WV 25802–9002

    • Ordered By — the revenue officer or PALS must print his or her name clearly in addition to signing the document

    • Accounting Data — Seizure number, spending office code and program activity code

    • Date Invoice Received — Actual date the invoice was received in the office (must be entered on all Forms 6888 that are received in the office)

  5. The signature of the revenue officer or PALS serves as both the procurement official and as the receiving person for goods and services received.

  6. Provide Parts 1 and 2 to the vendor.

  7. The contractor has the option of either submitting Part 1, Form 6888, as their original invoice or attaching their own itemized invoice. If Form 6888 is submitted without an invoice attached, the contractor must sign and date the payment request box and annotate the amount requested. This section does not have to be completed by the vendor if he or she is submitting a separate invoice, but Form 6888 must be completed with all other information and must accompany the vendor's invoice. Vendors should be informed to mail Part 1 of Form 6888 (and any applicable invoices) to the Beckley Finance Center at the address shown above.

  8. The Prompt Payment Act requires interest to be paid on government obligations that are not paid within 30 days of acceptance of goods or services or the date of receipt of a proper invoice, whichever is later. The invoice receipt date must be clearly documented on the Form 6888 and/or vendor's invoice.After the services have been rendered, the revenue officer or PALS should process Form 6888 expeditiously to avoid delay in payment. Part 3 of Form 6888 must be submitted to the Beckley Finance Center within five calendar days of the date the goods/services were received. The revenue officer or PALS is responsible for providing receipt and acceptance by signing Part 3 of Form 6888 and providing the actual date the goods/services were received. Proper acceptance dates are as follows:

    • Advertising — last date the ad ran in the paper

    • Towing — date of the actual towing

    • Storage — last date of actual service

    • Locksmith — date of actual service

    • Utilities — last date of billing period

    • Miscellaneous Expenses — the date of the actual service or last date of billing period

  9. For services procured by Form 6888, the revenue officer or PALS will submit to Advisory a copy of the vendor's bill, if available, and Part 5 of Form 6888 for each service rendered as part of the closing documents. Revenue officers and PALS must request input of TC 360 to the balance due account for all expenses of seizure and sale that are not paid directly by the taxpayer. See IRM 5.10.6.2(1), Payment of Expenses, for guidelines on the input of TC 360.

5.10.3.8  (10-01-2004)
"Not to Exceed" and Actual Costs

  1. If the Form 6888 cannot be issued to the vendor the day the service is performed (for example, storage of a vehicle and the bill will not be submitted until the service is completed), the cost of the service and a " not-to-exceed" amount must be entered on the Form 6888 under the "supplies and services" section; for example, " $10 per day storage fee for 30 days, not to exceed $300."

  2. In these situations, the vendor's copies of the Form 6888 will be retained by the revenue officer or PALS until the service is completed. When the service is completed, note the Form 6888 with the actual cost; for example, "actual cost of $200 ($10 per day for 20 days)."

  3. If the actual cost exceeds the original "not to exceed " amount, void the original Form 6888 and issue a new one as long as the total does not exceed $2,500.

  4. If there is a need to extend the service which results in the total cost exceeding the "not to exceed" amount on the Form 6888 and the new amount will be greater than $2,500, the Form 6888 cannot be used for payment. It should be marked "void" and placed in the seizure file. The revenue officer or PALS must submit a requisition to the field budget officer in sufficient time to allow for the establishment of a new procurement instrument prior to expiration of the service as specified in the original Form 6888.

  5. If emergency conditions exist and it is not possible to promptly submit a requisition, the revenue officer or PALS will:

    • Obtain telephonic approval from the contracting officer to continue the service

    • Submit a requisition within three workdays to the field budget officer, who will issue a confirming order, which will cite the date and scope of the agreement, including costs and the new completion date, to the vendor

  6. If it is not possible for the revenue officer or PALS to contact the contracting officer, he/she may extend the required service for a limited duration. A requisition must then be submitted to the field budget officer within three workdays, and must include all the required documentation necessary to enable the contracting officer to ratify the commitment. Commitments over $2,500 which require approval by the Assistant Secretary of the Treasury for Management, should be avoided. In addition to providing funds for the limited extension of services acquired by the revenue officer or PALS, the requisition should also provide for further coverage which may be required, thereby enabling the contracting officer to appropriately contract for the full scope of work.

5.10.3.9  (01-22-2008)
Notice of Seizure Form 2433 — Preparation

  1. Form 2433, Notice of Seizure, will be prepared by the revenue officer in all cases in which property has been seized. The inventory must be completed as soon as possible. Form 2433, Notice of Seizure, should be prepared as shown in Exhibit 5.10.3–5.

  2. Form 2433 is an eight-part snap-out assembly which contains parts:

    • For the taxpayer, owner, Advisory, and Accounting Control/Services

    • To release property in appropriate cases

    • To report sale proceeds and the disposition of the property

  3. The items of property seized should be described and identified with reasonable certainty in an inventory listed on the form or in an attachment to it. It is highly recommended that the PALS be involved with the inventory after the seizure is made for cases with a large number of lots. IRM sections 5.10.3.10, Alcoholic Beverages, through 5.10.3.16, Controlled Substances, include additional instructions which must be followed when any of the following assets are seized:

    • Alcoholic Beverages

    • Cash Register Contents

    • Checks and Money Orders

    • Food Stamps

    • Safe Deposit Boxes

    • U.S. Savings Bonds

    • U.S. Marketable Securities

    • "Letter Stock" or "Restricted Stock "

    • Securities Acquired through Form 668–A

    • Funds located in Brokerage Accounts

    • Patents and Pending Applications for Patents

    • Controlled Substances

  4. For real property, the current legal description should be secured from the deed. Also, the address (or street location if available), type of structure, approximate size of building, intended usage, and any other information as is required to properly describe the property should be included on the Notice of Seizure. If the use of a derivation clause is customary, it should be updated with the last transaction information.

  5. For personal property the description should include, to the extent possible:

    • Type of property

    • Brand name

    • Model description

    • Serial number

    • Quantities (where applicable)

    • Intended usage

    • Any other relevant information, such as the condition of the asset

  6. When a motor vehicle is seized, in addition to the description of the vehicle (make, type, model, year, odometer reading, etc.), the inventory should include a listing of optional equipment such as radio, tape player, or air conditioner, etc. Any damage such as dents or missing hubcaps, although not included in the description to be advertised, should be noted on Parts 5, 6, and 7 of Form 2433. The trunk and glove compartment should be opened and examined. Any contents should be described in the inventory. However, if the vehicle contains an item that demonstrates an expectation of privacy, such as a locked briefcase or locked luggage, the item may be seized but not opened without a Consent or Writ authorizing entry into that particular article or item. See IRM 5.10.2.7(3), Firearms, for the procedures to follow when firearms are found in a vehicle that is being seized.

  7. Form 2433 should reflect the most accurate fair market value possible. The fair market value should be based on the pre-seizure investigation unless the taxpayer provides additional information regarding the fair market value during the seizure. The case history should be documented if there is a change to the estimated fair market value of the asset.

  8. The detailed description of individual "grocery"