5.10.3  Conducting the Seizure

Manual Transmittal

November 22, 2013

Purpose

(1) This transmits revised IRM 5.10.3 Seizure and Sale, Conducting the Seizure.

Material Changes

(1) The only change from the prior revision is to re-insert Section 5.10.3.15.5, "Letter" Stock and "Restricted" Securities, (numbered as 5.10.3.14.3 in the July 3, 2009 revision). This section was inadvertently removed during clearance of the April 3, 2013 revision.

Effect on Other Documents

This material supersedes IRM 5.10.3, dated 04-13-2013.

Audience

Small Business/Self-Employed Compliance Employees

Effective Date

(11-22-2013)

Scott D. Reisher
Director, Collection Policy

5.10.3.1  (04-03-2013)
Overview

  1. This IRM section describes the procedures for completing seizures of property. The section includes direction that applies to all seizures as well as special instructions for particular types of property. The procedures for delivery of seizure forms are provided by IRC 6335 and must be followed carefully.

5.10.3.2  (04-03-2013)
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 determine asset value, estimate sale expenses, resolve any logistical issues and to ensure an orderly transfer of property.

  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. Two employees (at least one of whom must be a revenue officer) are required for all seizures. See IRM 5.10.2.20 (2) Post-Approval Actions for procedures when only one revenue officer is available to make the seizure.

  4. 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 the 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 5.10.3.6.1, Management Review Process and Taxpayer Appeal Rights for additional information on taxpayer rights during the seizure process).

5.10.3.3  (04-03-2013)
Conducting the Seizure — Securing Consent

  1. If the property to be seized is located on private premises, either the written consent of the 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. Use Form 10404 Consent to Enter Private Premises (Exhibit 5.10.3–1) to secure the appropriate written consent. The revenue officer should explain that:

    1. Written consent is not 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 can refuse consent, but should be informed that a Writ of Entry is the next probable step

    4. 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. The taxpayer is usually, but not always, the rightful occupant. In addition to the taxpayer, two examples of rightful occupants who may have authority to sign a consent are:

    • 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 by mail or telephone, and request that the rightful occupant appear before the revenue officer to give consent. The consent must be signed by the rightful occupant or their 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 must be made more than 7 days later, a new consent should be requested.

  6. The original consent will be sent to Advisory through the group manager within five days of the seizure. Distribute copies of the consent as follows:

    • The person who signed it

    • The case file

    • The PALS when custody of the property is transferred (see IRM 5.10.3.22, Transfer of Custody to PALS)

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

5.10.3.3.1  (04-03-2013)
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. If consent is denied, within 2 workdays of the denial the revenue officer will initiate the process to secure a writ (IRM 5.10.3.5, 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.

5.10.3.3.2  (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 entry to 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 control that assets in 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 in the private portion of the premises until a writ is obtained. The assets that are seized should be removed to a location where they can be protected.

5.10.3.4  (04-03-2013)
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 is defined as a seizure that must be made immediately because there is insufficient 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 direction from his or her manager, and extensive documentation in the case history is required.

  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 and also the area director if required

    • 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

5.10.3.5  (04-03-2013)
Writ Procedures

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

    • A declaration under penalties of perjury (Declaration of Revenue Officer, Exhibit 5.10.3–2)

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

  2. Since declarations are testimony under oath, the revenue officer must ensure that the information presented is accurate and factual. Extraneous information and subjective opinions should not be included in the declaration. Declarations do not require the signature of a notary public.

  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 any questions from the judge or magistrate.

  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. Forward the completed declaration and data sheet through the group manager and Advisory to area counsel as soon as possible. After review, area counsel will refer the matter to the U.S. Attorney. 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 appear in order to answer questions from the judge or magistrate.

    Note:

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

  7. When the Writ of Entry is received, the revenue officer will notify the PALS manager 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 be locked, the revenue officer should take the following actions:

    1. 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, contact the taxpayer to advise 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 limit or increase the time parameters.

5.10.3.5.1  (04-03-2013)
Writ Denied

  1. If the Writ of Entry is denied and it is determined that seizure of property located in a public access area is appropriate, consult with area counsel to determine whether such action will conflict with the basis for the denial of the Writ of Entry for the private premises. If area counsel concurs with the seizure, the property will be seized and stored as appropriate.

5.10.3.6  (04-03-2013)
Seizing the Property

  1. The revenue officer will proceed with the seizure once the consent is signed or the court order is received. 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. Distribute copies of the writ to:

    • Advisory (through the group manager) within 5 workdays after the seizure

    • The RO case file

    • Area counsel

    • The PALS upon transfer of custody of the seized assets

  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 control 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 delivered as required in IRM 5.10.3.20 Notice of Seizure Form 2433 - Delivery.

  4. Seizure of property should be timed to minimize entrance or interference of employees or customers. Sometimes 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 control 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 control of the property will not.

    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

    • 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 whether the seizure action should be discontinued. See IRM 5.10.3.6.1(6) Management Review Process and Taxpayer Appeal Rights for procedures if the taxpayer 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).

  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 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 for self-protection and to stop the attack. The seizure should be discontinued and the assault reported to TIGTA (see IRM 5.17.3.5.4.1 Criminal Acts).

  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, complete and sign the first statement, which documents that the taxpayer or taxpayer's representative (if available) was asked to be present during inventory. When the inventory is taken, complete the second statement, which indicates whether the taxpayer or the taxpayer's representative was present. Send Part 1 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, provide Part 4 of Form 668–B 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 include automobiles on a private parking lot 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 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 located 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 for the keys. If the attendant fails to surrender the keys, and/or denies access to the vehicle, follow the procedures in IRM 5.11.2.1.9, Refusing to Comply with a Levy.

5.10.3.6.1  (04-03-2013)
Management Review Process and Taxpayer Appeal Rights

  1. Taxpayers whose business assets have been seized are entitled to an expedited case review by management upon request. The seized assets must consist of 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 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), the taxpayer will be advised of the Taxpayer Advocate Service (TAS) and 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 5.10.1.7.3 Collection Appeal Rights). The taxpayer will use Form 9423 Collection Appeals Request to request a CAP hearing.

  5. TAS cases may be initiated because of seizure actions. If the taxpayer claims a hardship as a result of a seizure or proposed seizure action, determine whether the seizure action should continue (see IRM 13.1.7 Taxpayer Advocate Service (TAS) Case Criteriafor other situations that qualify for TAS referral ).

  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. Send Form 911 to TAS within one workday of identifying that the contact potentially meets TAS criteria.

  7. Further collection actions are generally 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.

5.10.3.7  (04-03-2013)
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. 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. If a PALS has not yet been assigned, include the name and telephone number of the PALS group manager.

  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 will prevent unnecessary expenses if the sale is delayed or cancelled. After the Form 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 5.10.3.8 Payments to Vendors for Services Less Than or Equal to $2,500 and 5.10.3.9 "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 procedures in these situations.

  4. When only real estate 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 after the 180 day redemption period expires and the deed is issued. If the seizure involves unimproved real estate or the real estate is currently occupied or in use, do not post a warning notice.

  5. If the taxpayer's entire business including both real and personal property is seized, warning notices should be attached to clearly identify the property under seizure.

  6. While the procedures above apply in typical situations involving seizure of business property, there is no need to post a warning notice on any seizure when it would increase the prospects of violence or otherwise be imprudent. Not posting the warning notice has no effect on the legitimacy of the seizure action. Document the reasons for not posting 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. Follow the provisions in IRM 5.10.4.5(11) Actions to Release and Return Property 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 not the actual seizure.

  10. When guards have been hired they should be apprised of the possibility of harassment or violence. In most cases 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 .

  11. Ask the taxpayer 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.

5.10.3.7.1  (04-03-2013)
Controlling Seized Property Stored in IRS Offices

  1. Parts 5 and 6 of Form 2433 and the ICS history are used for control purposes when seized items are stored in an IRS office. The revenue officer or PALS will ensure the property description is complete and document the value of the property on the appropriate section of parts 5 & 6. Reference to an attachment is appropriate if the complete description will not fit on Form 2433 or a supplemental Notice of Seizure is prepared.

  2. The revenue officer or PALS will document in the ICS history the location of the safe, cabinet or other location with the name and number of the person controlling access.

  3. Upon transfer of custody of the property to the PALS, the PALS will sign part 5 and 6 of Form 2433 and forward a copy of part 6 to Advisory and the PALS group manager.

  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 will include periodic verification checks of the property in the container by a designated official.

5.10.3.7.2  (04-03-2013)
Service and Repair Establishments

  1. Some businesses (e.g., dry cleaners, laundries, and repair shops) may possess 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, consider providing at least some Saturday hours.

  4. Make reasonable attempts to contact customers regarding 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 property.

5.10.3.7.3  (04-03-2013)
Records of Attorneys, Physicians, and Accountants

  1. Records maintained by attorneys, physicians, and accountants concerning professional services performed are usually of little or no 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 are not subject to seizure.

  3. Therefore, do not seize case files or records. When office facilities or office equipment of attorneys, physicians, or public accountants are seized for payment of taxes, do not examine case files and related files and ask the taxpayer to promptly remove all 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 the case files should be released to the taxpayer as soon as possible. The revenue officer should be present when the taxpayer retrieves the files so that other property of value is not removed.

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

  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 the time of removal. Under no circumstances will case files be examined. Place the files in boxes and securely bind them. Label each box with the name of the taxpayer and the date it was removed. If the premises are not also under seizure, leave the boxes at the business premises. If the business premises are under seizure, remove the boxes for storage at the local IRS Office.

  7. When files are removed for storage, ensure the security of the case files, and, if possible, store them in locked containers. 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, notify the taxpayer 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, ask area counsel for guidance.

5.10.3.7.4  (07-03-2009)
Seizures Involving Computer Equipment

  1. IRM 5.10.1.3.3.5 Equity Determination - Computer Equipment contains pre-seizure guidelines when determining whether to seize computer equipment. All taxpayer data on the hard drive must be removed prior to sale.

  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. Advise the taxpayer 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 may make this request. Exhibit 5.10.3–9 Taxpayer/Responsible Officer's Acknowledgment of Opportunity to Download Computer Information should be used to document that the taxpayer was given the opportunity to download the information. Retain a copy of this document 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 its original condition if the property is released or redeemed prior to sale.

  5. Only the PALS are authorized to use the WipeDisk software 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.

5.10.3.8  (04-03-2013)
Payment to Vendors for Services Less Than or Equal to $2,500

  1. For purchases less than or equal to $2,500, 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)

      Note:

      The Integrated Procurement System (IPS) must be used to pay the costs of a pre-seizure commercial title search. See IRM 5.10.1.3.3(5) Equity Determination - Computer Equipment.

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

  3. Services that exceed $2,500 require a purchase order through procurement channels and the request must be submitted through the IPS for funding by the local budget office. IRM 5.10.2.22 Contracting for Services contains procedures for 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.

5.10.3.8.1  (04-03-2013)
Government BankCard and Convenience Checks

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

  2. If using the Government BankCard or convenience checks for locksmith or towing services, give 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.

  4. The appropriate 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, submit a copy of the vendor's bill for each service rendered as part of the closing documents sent to Advisory.

    Note:

    If the RO does not have a Government BankCard and the vendor will not accept Form 6888, see IRM 5.10.2.22 Contracting for Services.

5.10.3.8.2  (04-03-2013)
Form 6888 Procedures

  1. Area collection 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. The book contains a "record of purchases" which must be documented each 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. Ensure that the writing is legible 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 those services are required. The "Taxpayer Identification Number" (TIN) clause requires the contractor to include their 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.)

  5. The employee signing the Form 6888 (RO or PALS) serves as both the procurement official and the receiving person for goods and services obtained.

  6. Provide Parts 1 and 2 to the vendor.

  7. The contractor can either submit Part 1, Form 6888 as their original invoice or attach 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. Instruct the vendors 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. Send Part 3 of Form 6888 to the Beckley Finance Center within five calendar days of the date the goods/services were received. The revenue officer or PALS confirms receipt and acceptance by signing Part 3 of Form 6888 and documenting the actual date the goods/services were received. Proper acceptance dates are as follows:

    • Advertising — last date the ad was published

    • Towing — date of the tow

    • Storage — last date of service

    • Locksmith — date of service

    • Utilities — last date of billing period

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

  9. For services procured by Form 6888, submit a copy of the vendor's bill if available, and Part 5 of Form 6888 to Advisory 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.

5.10.3.9  (04-03-2013)
"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, citing 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, the employee 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 require approval by the Assistant Secretary of the Treasury for Management and 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.

5.10.3.10  (04-03-2013)
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 should be prepared as shown in Exhibit 5.10.3–5.

  2. Form 2433 is an eight-part form with copies for:

    • The taxpayer, owner, Advisory, and Accounting Control/Services

    • Releasing property in appropriate cases

    • Reporting sale proceeds and the disposition of the property

  3. The items seized should be described and identified with reasonable certainty in an inventory listed on the form or in an attachment to it. Request the assistance of the PALS with the inventory after the seizure is made for cases with a large number of lots. IRM sections 5.10.3.11 Alcoholic Beverages through 5.10.3.17 Controlled Substances include additional instructions when any of the following assets are seized:

    • Alcoholic Beverages

    • Cash Register Contents

    • Checks and Money Orders

    • Safe Deposit Boxes

    • U.S. Savings Bonds

    • U.S. Marketable Securities

    • 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, VIN, 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, 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 5.10.2.8(3) Firearms for the procedures to follow when firearms are found in a seized vehicle.

  7. Parts 5, 6, and 7 of Form 2433 should reflect the most accurate fair market value possible. Do not include the fair market value on the parts of Form 2433 provided to the taxpayer or third parties, as this information is used for internal accounting purposes. The fair market value should be based on the pre-seizure investigation unless the taxpayer provides additional information during the seizure. Document the case history if there is a change to the estimated fair market value of the asset.

    Note:

    If information becomes available after the seizure that indicates sale will not generate proceeds to apply to the tax liability, immediately contact the PALS and RO group manager to determine whether release of the seizure is appropriate

  8. The detailed description of individual "grocery" type items and certain retail merchandise inventories (hardware, drugstore, etc.) may be waived for groupings of like items reasonably described.

5.10.3.10.1  (04-03-2013)
Notice of Seizure Form 2433 — Multiple Forms

  1. Revenue officers may encounter situations where multiple Forms 2433 may be needed. This is usually the result of the seizure of multiple assets from a single taxpayer. In these cases, a determination should be made regarding when to consider the seizures as separate actions requiring separate seizure numbers and when to consider them subsets (using alpha suffixes) of a single seizure.

  2. In general, if assets are seized on the same day from the same taxpayer, use alpha suffixes for different groups of property if doing so would be beneficial (e.g., different types of dispositions, separate sales, redemption periods, separate parcels of real estate, possible litigation on some assets, etc.).

  3. If any of the following conditions apply, separate seizure numbers must be used:

    • Assets are in the custody of different parties

    • Assets are seized on different days

    • Assets are seized from a different taxpayer (e.g., jointly held asset seized after individual asset)

      Note:

      A separate Form 668B and complete set of seizure paperwork is required for each seizure number issued.

5.10.3.10.2  (04-03-2013)
Notice of Seizure Form 2433 — Supplemental

  1. In some instances it may be desirable to issue a Notice of Seizure before a detailed inventory is taken. This procedure should only be used when :

    • The work involved in taking the detailed inventory would be unwarranted because of the probability of prompt redemption or release

    • The delay may jeopardize the Government's claim for adequate protection due to impending bankruptcy or other insolvency proceeding, or

    • Many assets have been seized and there is insufficient time to prepare a detailed inventory at the time the Notice of Seizure is issued.

  2. Under these conditions, issue the Notice of Seizure describing the property to the extent practicable:

    1. List the most valuable and readily identifiable items.

    2. Identify the rest of the property generally and describe its specific location.

  3. An acceptable general description is "and all other property of (name of taxpayer) seized on the premises of (complete address) on (date and time). A supplemental Notice of Seizure providing a detailed itemization of this property will be provided as soon as a detailed inventory is completed."

  4. The revenue officer should prepare the supplemental notice as soon as possible, identifying only the items of property not previously identified. This notice should be marked "Supplemental" and should not be referred to as a "revised" or "amended" notice since it might imply that the original notice was improper or legally inadequate.

    Note:

    This complies with the requirement in Treas. Reg. 301.6335-1(a) that, after seizing personal property, the IRS provide a Notice of Seizure containing a "list sufficient to identify the property seized."

    Note:

    the Supplemental Form 2433 (as well as the original) should be delivered as described in IRM 5.10.3.20 Notice of Seizure Form 2433 - Delivery.

5.10.3.11  (04-03-2013)
Alcoholic Beverages

  1. If personal property is being seized that includes an inventory of beer, wine or distilled spirits, exclude any opened bottle or containers from the seizure and advise the taxpayer that these items are left for his/her disposal. A bottle is considered opened if the seal has been broken.

  2. If it is necessary to move the alcoholic beverages, the revenue officer or PALS will:

    1. Arrange for transportation and storage.

    2. Ensure that responsibility for theft and breakage is assumed by the carrier during transportation.

    3. Secure a receipt and evidence of acceptance for responsibility from the transportation and/or storage vendor.

  3. If the beverage was acquired by the taxpayer through a state, county or municipal store:

    1. Contact the liquor control authorities and arrange for an inventory.

    2. Furnish a copy of Form 668–B to the liquor control representative.

    3. Jointly take an inventory on a form provided by the representative.

    4. Retain a copy of the inventory in the case file.

  4. In areas restricting the sale of liquor to a state, county, or municipal store system, contact area counsel for advice in conducting the sale. In some situations, state law restricts the sale of liquor to the public, but sale may be made to anyone holding a liquor license.

  5. As soon as possible, determine the potential for redemption or release of any alcoholic beverages. The revenue officer should advise the taxpayer that he or she may make preliminary arrangements for returning the inventory to the wholesalers for a payment in an amount equal to the wholesale value. The arrangement should provide that the proceeds will be paid directly to the revenue officer for credit to the tax liability. Ask the taxpayer to advise when arrangements are made.

  6. If the alcoholic beverages are redeemed, prepare Form 668–E and ask the taxpayer to sign the release on the reverse. In jurisdictions with a state, county, or municipal store system, a copy of Form 668–E will also be supplied to the proper authorities with a memorandum explaining the action. Arrangements for transportation of the inventory from the place of storage to the licensed premises should be left to the taxpayer.

  7. If the seizure is not in an area that has a state, county, or municipal store system, or if the state or county stores are prohibited from accepting returned product, a public sale will be held under regular sale procedures. The PALS should check with local authorities regarding the method of sale to identify any special restrictions.

5.10.3.12  (04-03-2013)
Cash Register Contents

  1. Seizures of cash registers or their contents require either the taxpayer's written consent or a Writ of Entry.

  2. The term "cash register," includes cash register, safe, vault, cash box or any other type of cash receptacle. The contents of a cash register are subject to levy. Since levy action may result in the seizure of assets other than cash or in the seizure of the cash register itself, file an NFTL prior to seizure.

  3. Prior to seizing a cash register consider notifying local law enforcement authorities.

  4. After securing a signed consent or a writ and providing the taxpayer with the Form 668–B, the revenue officer will apply the appropriate warning notice to the cash register:

    1. Form 12913 will be used when the contents are to be immediately removed.

    2. Form 12912 will be used if removal of the contents is to be delayed — it should be affixed so that the cash register cannot be opened without removing, tearing or destroying the seal.

  5. Ask the taxpayer or the person in possession of the property to open the cash register in the presence of the revenue officer and the assisting employee.

  6. If the request is refused, open the cash register provided it can be opened without using force. In most instances this may be done by pressing the "No Sale" key. If it can be opened by the revenue officer without using force, the seal should not be removed, but should be loosened sufficiently to permit opening of the register and access to the contents.

  7. Ask the taxpayer, or person in possession of the register to observe the counting of any money removed from the register.

  8. Issue a Form 809 receipt for the amount of cash seized. Write "Contents of cash register seized" across the top of Form 809.

  9. Only sufficient cash should be removed from the register to satisfy the amount of the levy. The remaining contents of the cash register should not be disturbed, and items in the cash register other than cash should not be seized unless there is insufficient cash to satisfy the levy.

  10. Dispose of any seized credit card drafts (e.g., Visa, MasterCard,) by presenting them for payment to the issuing financial institution with an attached Form 668–A Notice of Levy. When the drafts have been itemized on Form 2433 and are later converted to cash through the use of Form 668–A, they must be accounted for by removing them from the seizure inventory through a release of levy (Form 668–E).

  11. Cash should be inventoried by coin and bill denomination. Checks should be listed individually, specifying the check number, bank name, date of check, and the amount. See IRM 5.10.3.12.1 Checks and Money Orders for additional information regarding checks and money orders.

  12. United States securities and any other assets removed from the cash register should be described in detail on the Form 2433 Notice of Seizure. See IRM 5.10.3.14.1 United States Savings Bonds and 5.10.3.15 United States Marketable Securities for disposition of savings bonds and securities.

  13. Before leaving the premises, the revenue officer will remove the warning notices and seizure tags and prepare the Form 2433.

  14. If the cash register is not voluntarily opened or cannot be opened without using force:

    1. Prepare a notice of seizure describing the property as "cash register (description by number and trade name) and contents thereof" .

    2. If the cash register is movable, it should be removed from the premises, placed in storage, and arrangements made to have it opened.

    3. If the cash register cannot be removed from the premises, advise the taxpayer of the penalties for forcible rescue, dispossession, or attempt to rescue or dispossess any property that has been seized. (U.S. Code, Title 18, Chapter 109, Section 2233 provides for a fine or imprisonment of not more than 5 years or both).

    4. Obtain the services of a locksmith to open the cash register to avoid damage.

  15. The cash register should be opened in the presence of two Service employees. Notify the taxpayer in advance so that he/she may decide whether to be present. The contents of the cash register should be removed and the cash counted. If there is not sufficient cash in the register to liquidate the account, the cash register and any other assets seized that are of sufficient value to warrant sale may be advertised and sold. If any of the seized property is returned, issue a release of levy.

5.10.3.12.1  (01-22-2008)
Checks and Money Orders

  1. If checks or money orders payable to the taxpayer are seized, use the following endorsement: "This check (money order) and the proceeds thereof have been seized under authority of Title 26, United States Code, Section 6331, for application on the unpaid tax liability of (name of the taxpayer), and is herewith deposited to the credit of the Treasurer of the United States, (name of the area director), Area Director of Internal Revenue Service (Area Number)."

  2. This endorsement may be typed or rubber-stamped on the reverse of the check. If a seized check is returned because a personal endorsement is missing, even though the check is endorsed as above, telephone the bank, alert them to the Service's authority, and re-deposit the check.

  3. These checks and money orders will be applied directly to the account. If the check fails to clear the depository, it will be returned with a debit advice to the Advisory Territory Manager for the area specified in the endorsement. Advisory will forward the returned check to the appropriate revenue officer for release (Form 668–E) back to the taxpayer. No returned check penalty will be asserted.

5.10.3.13  (04-03-2013)
Safe Deposit Boxes

  1. Serve a Notice of Levy Form 668–A with a copy of the NFTL attached on an officer of the bank or trust company and request surrender of the contents of the box. The revenue officer will also provide part 4 of Form 668–B to the official as authority to seize the taxpayer's assets. The bank or trust company should then be advised not to permit the box to be opened except in the presence of a revenue officer.

  2. Ordinarily two keys are used to open a safe deposit box: a master key held by the company which owns the box and an individual key in the possession of the person who rents the box. A bank or trust company will not open a safe deposit box without the consent of the lessee of the box unless protected by a court order. Under these circumstances the government must prevent the taxpayer from having access to the box, or it must obtain a court order directing that the box be opened, usually by a locksmith.

  3. At the time that a safe deposit box is secured, Form 12912 Seal for Securing Safe Deposit Boxes will be signed by the revenue officer and affixed over the locks for security while the box remains under seizure.

  4. Form 2433, Notice of Seizure, will be prepared while the revenue officer is still on the premises, or as soon as possible after leaving the premises. The notice, addressed to the bank or trust company, should specify the amount demanded and describe the property as "contents of safe deposit box." The box should be identified as accurately as possible (usually by box number and name of the institution).

  5. Personally deliver Part 2 of Form 2433 to an official of the bank or trust company. Deliver Part 1 to the taxpayer according to the procedures in IRM 5.10.3.20 Notice of Seizure Form 2433 - Delivery.

  6. When the rental period of the safe deposit box expires and is not renewed, a bank or trust company usually has the right to open the box. The revenue officer should attempt to determine if this is the situation in any given case, and if the right exists, use this opportunity to seize the contents of the box.

  7. If the revenue officer is unsuccessful in securing the taxpayer's consent or cooperation in opening the box, a Writ of Entry may then be sought or a suit requested to authorize entry into the safe deposit box (IRM 5.10.3.13.1 Court Order to Open Safe Deposit Box). Securing the taxpayer's consent or cooperation is preferable as it gives the taxpayer every opportunity to comply before resorting to a court order.

  8. When the deposit box is opened at a later date, either voluntarily or involuntarily, and the deposit box contains assets which are seized, a Supplemental Notice of Seizure (see IRM 5.10.3.10.2 Notice of Seizure Form 2433 - Supplemental) will be prepared describing the assets.

  9. When the box is opened, all residue from the seal should be removed by the revenue officer, or the bank official in the revenue officer's presence.

5.10.3.13.1  (01-22-2008)
Court Order to Open a Safe Deposit Box

  1. Occasionally, the procedures outlined in IRM 5.10.3.13 Safe Deposit Boxes will not be satisfactory and immediate action to open the safe deposit box may be necessary. For instance, the statute of limitations may be about to expire, the taxpayer may have disappeared or be in concealment, or the taxpayer or bank officials may refuse cooperation and deny access.

  2. Under these circumstances Form 2039 Summons should be prepared and served on the taxpayer/box-holder in an attempt to secure information as to the contents of the box. If this action does not accomplish the desired results, a Writ of Entry should be sought or a suit requested to open the safe deposit box (see IRM 5.17.4 Suits by the United States and 5.17.12 Investigation and Reports).

  3. Writ of entry procedures may be used, in many situations, to obtain access to the contents of a safe deposit box. (See IRM 5.10.3.5 Writ Procedures). Contact area counsel through Advisory for advice on whether a writ or suit is appropriate.

  4. When a writ is requested the revenue officer's declaration should state the need to enter the safe deposit box for the purpose of seizing the contents belonging to the taxpayer. After the writ is issued, a copy will be given to both the taxpayer and a representative of the financial institution where the safe deposit box is located.

  5. The following information and documents should be provided in triplicate when a suit is requested:

    • Copies of each notice and demand issued to the taxpayer — if a copy of a notice and demand is unavailable, prepare a statement stating the evidence that exists to prove notice and demand was prepared and issued

    • Copies of all notices of tax lien filed, showing the date, time, and place of filing

    • Copies of Form 688–A Notice of Levy; Form 668-B Levy; and Form 2433 Notice of Seizure

    • Copies of the summons issued and a statement, if known, as to why the summons did not produce desired results

    • A statement as to what is believed will be accomplished by gaining access to the contents of the box.

  6. Jurisdiction and authority of the district court to grant an order to open a safe deposit box is in IRC 7402(a). If a safe deposit box is opened as the result of a court order, the revenue officer will then follow the procedures in IRM 5.10.3.13 Safe Deposit Boxes.

5.10.3.14  (04-03-2013)
United States Treasury Securities

  1. The United States Department of the Treasury issues a variety of marketable and non-marketable securities, most of which are now issued in uncertificated, electronic form. Many prior issues remain outstanding in certificated (paper) form. When considering levy, the form in which the security was issued must be considered.

5.10.3.14.1  (04-03-2013)
United States Savings Bonds

  1. United States Savings Bonds are nonmarketable (nonnegotiable) securities which are nonnegotiable and are payable only to, and may not be transferred by, registered owners during their lifetimes. Savings bonds are generally redeemable at any time after being held for one year. As of January 1, 2012, Series EE and Series I bonds (except for Series I bonds purchased through the Tax Time Program) are no longer sold in certificated form. Series HH bonds (not issued after September 1, 2004) were issued in certificated form. The following instructions are applicable to certificated nonmarketable Treasury Securities.

    Note:

    In addition to savings bonds, Treasury-issued certificates of indebtedness are also nonmarketable.

  2. If certificated savings bonds are levied upon, they should be transmitted to the Advisory Territory Manager, together with a copy of the related levy or notice of levy for subsequent transmittal, over the signature of the territory manager or, at his/her option, the Advisory Territory Manager's signature, to the Bureau of the Public Debt as provided in Exhibit 5.10.3–7.

  3. The Bureau of the Public Debt will forward a check payable to the area director. Balance due accounts should not be credited until the check is received.

  4. If a registered owner or a co-owner wishes to redeem savings bonds and turn over the proceeds to the area director, he/she should sign the request for payment in the presence of an authorized certifying officer and direct that the check be sent to the area director. The revenue officer should request the owner to sign an authorizing power of attorney to the area director in order that the redemption check may be deposited. Standard Form 231 Power of Attorney by Individual for the Collection of Checks Drawn on the Treasurer of the United States should be used for this purpose. The bonds may be submitted to any Federal Reserve Bank or branch thereof or to the Bureau of the Public Debt in Parkersburg, West Virginia.

  5. Savings bonds held electronically may be levied using Form 668-A.

5.10.3.15  (04-03-2013)
United States Marketable Securities

  1. Marketable United States securities are issued in the form of:

    • Treasury bonds

    • Treasury notes

    • Treasury certificates of indebtedness

    • Treasury bills

    • Treasury Inflation-Protected Securities (TIPS)

    Note:

    U.S. marketable securities are now issued in electronic form. The following instructions apply to seizures of these securities that were issued in certificated form.

  2. A key difference in the securities is the length of time before maturity. Bonds are long-term issues, notes are medium-term issues, TIPS are mid-long term issues, and certificates and bills are short-term issues.

  3. Certificated Treasury bonds were issued in either coupon (bearer) or registered form. Coupon bonds are payable to bearer, and title passes by delivery, without endorsement and without notice to the Department of the Treasury. Interest on this type of bond is payable semiannually upon presentation of the coupon, which is attached to the bond, to any recognized bank.

  4. A registered bond is payable to the registered owner, whose name is inscribed on the bond, or to his/her registered assigns, and may be transferred only by an assignment executed by the registered owner or his/her authorized representative. Interest is paid semiannually by a check issued by the Treasury to the owner of record. Certificated notes and bills were issued in coupon (or bearer) form only. Since securities of the coupon (or bearer) form are freely transferable and may be disposed of by any person who comes into possession of the securities, appropriate safeguards are necessary.

  5. The disposition of United States securities, either in coupon or registered form, will depend upon whether the securities are matured (or called) or unmatured. The maturity date is shown on the face of the security and, if callable before maturity, that date is also shown immediately before the maturity date.

5.10.3.15.1  (04-03-2013)
Unmatured Securities

  1. Unmatured coupon type securities will normally be offered for sale as soon as possible under the law, in the same manner as any other seized property. The minimum bid price will be established as prescribed in IRM 5.10.4.8 Establishment of the Minimum Bid. However, if the securities will mature within a relatively short period, they may be held to maturity and disposed of as provided by IRM 5.10.3.15.2 Matured Securities. If securities are declared purchased for the United States as a result of the sale, the procedures in IRM 5.10.7.9 Disposition of Acquired Securities will be followed. Unmatured registered securities will not be offered for sale but a request should be made to the Director, Collection Policy for advice as to the action that may be taken. The request should identify the security, including the maturity date.

  2. If the securities will mature within a relatively short period (e.g., 30 days) they may be held to maturity and disposed of as provided in IRM 5.10.3.15.2 Matured Securities.

5.10.3.15.2  (04-03-2013)
Matured Securities

  1. Matured (or called) securities, or those which will mature within a reasonably short period after seizure, may be reached by Form 668-A Notice of Levy and will not be offered for sale since they are or will shortly become the equivalent of cash redeemable at par value. Thus, if the securities were offered for sale, they could not be expected to sell for an amount in excess of the par value.

  2. Unredeemed matured or called Treasury securities are subject to levy via Form 668-A.

  3. Matured securities in coupon (or bearer) form should be personally delivered or transmitted by registered mail to the nearest Federal Reserve Bank for redemption. A letter (in duplicate) similar to the sample provided in Exhibit 5.10.3–6 should be used to transmit these securities.

  4. Matured or called Treasury bonds in registered form will be transmitted to the Advisory Territory Manager, together with a copy of the related levy and/or notice of levy for subsequent transmittal to the Bureau of the Public Debt. The letter of transmittal (in duplicate) to the Bureau of the Public Debt should be prepared as provided in Exhibit 5.10.3–5.

5.10.3.15.3  (04-03-2013)
Stocks subject to seizure and sale procedures

  1. Taxpayers may have accounts or own stock without certificates. These securities are not represented by certificates but rather are held electronically. Shares of stock that are not represented by certificates are subject to administrative seizure and sale procedures. Do not demand that the brokerage or bank liquidate these shares and send a cash payment; the shares must be seized and sold.

  2. Taxpayers may also have interests that are represented by certificates. The certificates are also subject to administrative seizure and sale procedures. Do not demand that the brokerage or bank liquidate these shares and send a cash payment; the shares must be seized and sold.

    Note:

    Interests in mutual funds (whether certificated or not) are redeemable and subject to the third-party levy provisions in IRM 5.11.6 Notice of Levy in Special Cases

    .

  3. Campus Compliance Services sometimes receives certificates in response to levies. Since they are unable to properly dispose of these negotiable certificates, the negotiable certificates will be transmitted to the appropriate collection area for disposition.

  4. Within thirty (30) days of notification of a hold placed on certificates or receipt of certificates from a third party or Campus Compliance Services, the revenue officer who receives the certificates must decide whether to release the levy and return the certificates, if applicable, or prepare and forward the seizure approval package. The case file will be documented to reflect the background levy action. Exceptions to this 30 day time frame include situations when the current value of the stock cannot be ascertained and the time frame would then start once the value of the stock is known. The reason for any delay must be documented in the case history.

    Note:

    The certificates should be secured with the same precautions as seized property (IRM 5.10.3.7.1 Controlling Seized Property Stored in IRS Offices).

  5. The seizure will be treated as a third party in possession of the asset seizure. The following table describes when the Form 668-B Levy and Form 2433 Notice of Seizure should be prepared and issued for stock certificate seizures:

    If Then
    The bank or brokerage firm sends only notification that the certificates have been placed on hold as a result of the Form 668-A Levy The Form 668-B Levy must be prepared and issued to both the taxpayer and the bank or brokerage firm. Upon receipt of the actual certificate, the Form 2433 Notice of Seizure must be prepared and issued to both the taxpayer and the bank or brokerage firm.
    The bank or brokerage firm sends the certificates as a result of the Form 668-A Levy The Form 668-B Levy and Form 2433 Notice of Seizure should be prepared and issued to both the taxpayer and the bank or brokerage firm.
    If the stock is held electronically, The Form 668-B Levy and Form 2433 Notice of Seizure should be prepared and issued to both the taxpayer and the bank or brokerage firm.

  6. Revenue officers are not required to generate a courtesy seizure for stock certificates when the bank or brokerage firm is located outside of their collection territory. The Form 668-B Levy and Form 2433 Notice of Seizure may be mailed to the possessor of the certificates. The revenue officer must deliver the Form 668-B and Form 2433 to the taxpayer in accordance with IRM 5.10.3.20 Notice of Seizure Form 2433- Delivery.

5.10.3.15.4  (10-01-2004)
Securities and Negotiable Instruments Seized Directly From the Taxpayer

  1. When certificated securities are received directly from the taxpayer, the issuing agent is not aware that the securities have been seized. In order to prevent the taxpayer from contacting the issuing agent to have the stocks re-issued so they can be sold by the taxpayer, send Part 2 of Form 2433 to the issuing agent.

  2. A letter should accompany Form 2433 advising that the stocks have been seized and should not be re-issued until the seizure and sale is resolved.

  3. A copy of the Notice of Sale may be sent to the issuing agent as well.

5.10.3.15.5  (11-22-2013)
"Letter" Stock and "Restricted" Securities

  1. Securities offered through the mail or through interstate commerce, according to the Securities Act of 1933, unless exempted by that Act, must be registered with the Securities Exchange Commission (SEC). A registration statement requires an issuer of securities to disclose certain information to protect the public.

  2. Restricted stocks may or may not be identified by a statement stamped somewhere on the certificate to the effect that the stock has not been registered under the Securities Act.

  3. On September 3, 1997 the SEC issued a No-Action Letter that allows the Service to sell seized restricted securities at IRC 6335 sales. In the past the Service was unable to sell seized restricted securities because of the constraints imposed on the resale of such securities by the Securities Act of 1933.

  4. Prior to seizure of these securities, revenue officers should consult with the PALS and Advisory for further guidance on the appropriateness of the sale. If appropriate, counsel advice can be obtained for specific procedures. The Service may sell restricted securities by public sale under the provisions of IRC 6335, subject to the restrictions outlined below.

  5. The restricted securities of any one issuer may be sold to only one purchaser as a block.

  6. All publicly available financial and other information concerning any issuer that the Service may by law provide to the purchaser, other than returns or return information made confidential under IRC section 6103, will be made available to any prospective purchaser.

  7. Sales will be made only to purchasers who are financially sophisticated and can afford the risk of investment.

  8. Each purchaser of restricted securities will be required to represent that the restricted securities are being acquired for the purchaser’s own account and not with a view to the sale or distribution thereof, and that the restricted securities will not be resold unless pursuant to an effective registration statement under the Act or under a valid exemption from such registration.

  9. The purchaser of the restricted securities at the tax sale would be required to acknowledge and represent to the Service (or the Service shall certify it if it is the purchaser) in writing to the effect that:

    1. The purchaser (either alone or with such purchaser’s attorneys, accountants, or other advisors) possesses the requisite business and investment knowledge and experience to effectively evaluate the potential risks and merits of the investment.

    2. The purchaser has sufficient financial ability and net worth to bear the economic risk of the investment.

    3. The purchaser is aware of the fact that the restricted securities have not been registered under the Act or applicable state securities law.

    4. The restricted securities are being acquired as an investment for the purchaser’s own account and not with a view to the sale or distribution thereof.

    5. The restricted securities will not be resold unless they are registered under the Act and applicable state securities laws or there exist valid exemptions from such registration requirements.

    6. Certificates evidencing the restricted securities to be received by the purchaser will bear a legend to the effect that such securities represented thereby are not registered under the Act or under any state securities laws and may not be resold or transferred without registration under the Act and applicable state securities laws or the availability of valid exemptions from such registration requirements.

5.10.3.16  (01-22-2008)
Patents and Pending Applications for Patents

  1. A patent is a grant made by the government to an inventor, his or her assignee, or heirs, conveying and securing to the person the right to exclude others from making, using, or selling the invention for a term of, generally, 20 years. Because of the exclusive nature, the patent may have value.

  2. The law provides for the recordation of applications and issued patents in the Patent Office. Certain non-tax liens against patents may be filed with that office. However, NFTLs cannot be filed for recordation with the Patent Office because they are ex parte legal documents. Part 2, Form 2433 Notice of Seizure should be sent to the Patent Office to be placed in the taxpayer's file so that the IRS can be notified of any action to be taken on the patent.

  3. A letter (in duplicate) similar to the example provided in Exhibit 5.10.3–7 should be used to transmit Part 2 of Form 2433 to the Patent Office. In addition, a recording fee should be enclosed in the transmittal letter. Since the recording fee is subject to change, contact the Recording Officer at the Patent Office by phone for information regarding the appropriate recording amount, to whom the money order should be made payable, and to request any necessary documents, such as the Recordation Form Cover Sheet. Secure a money order for the appropriate recording amount, mail it with the transmittal letter and Part 2 of Form 2433, and debit the recording fee to the taxpayer's account through a TC 360.

  4. Issued patents are subject to normal seizure and sale procedures, including delivery of Part 1 of Form 2433 and Part 3 of Form 668-B to the taxpayer, except as stated in this subsection. Since title to the patent can be passed without possession of such documents, actual physical seizure of the letters of patent is not essential if they are not readily available. However, the Notice of Seizure and the Notice of Sale should clearly identify the patent, including identifying the patent by number. The certificate may be presented by the purchaser to the Patent Office for recordation. Do not serve Form 668-A or Form 688-B on the Patent Office.

  5. A pending application for patent should not be seized because the application may be rejected by the Patent Office or may be abandoned by the applicant. However, suit may be recommended to institute a lien foreclosure and to request the appointment of a receiver. A court appointed receiver will be entitled to prosecute a pending application or seek to have an abandoned application reinstated.

  6. Information concerning the ownership and identification of issued patents may be secured by writing to the Commissioner of Patents, Attention: Solicitor of Patents, Washington, D.C. 20231. Information on pending applications for patents may also be obtained from that office. However, since details of pending applications for patents are not of public record, the request, on official area director letterhead, must specify that information necessary to file a lien foreclosure is sought for official business purposes in connection with the collection of a named taxpayer's assessed tax liability. The Patent Office should be requested to furnish the following information with respect to a pending application:

    • The patent application number

    • Date of the application

    • Name and address of any party other than the taxpayer who has an interest in the application

5.10.3.17  (04-03-2013)
Controlled Substances

  1. As soon as possible after seizure and inventory, all controlled substances (i.e., narcotics, stimulants, depressants, tranquilizers, and hallucinogenic drugs) should be separated from the other assets and placed in a location to ensure proper safeguarding and reduce the possibility of theft or commingling the controlled substances with other drugs, or selling them to an unauthorized person. Most commercial containers of controlled substances can be identified by the letter "C" and a Roman numeral (I, II, Ill, IV, V) imprinted in the upper right corner of the label. Older commercial containers may have, in lieu of the "C" and the Roman numeral, one of the following symbols printed on the label: "A" , "B" , "X" , or "M" (all narcotics) or "CRx" (non-narcotics).

  2. The taxpayer, the revenue officer making the seizure, or the PALS must also request the Regional Director of Drug Enforcement Administration (DEA) in the region in which the taxpayer is located for authority and instructions to dispose of such substance. The request should be made as follows:

    1. If the taxpayer is a registrant required to make reports pursuant to 21 CFR Part 1304, he/she shall list the controlled substance or substances which he/she desires to dispose of on the "b" subpart of the report normally filed by him/her, and submit three copies of that subpart to the Regional Director of DEA in his/her region.

    2. If the taxpayer is a registrant not required to make reports pursuant to 21 CFR Part 1304, he/she shall list the controlled substance or substances which he/she desires to dispose of on DEA Form 41, and submit three copies of that form to the appropriate Regional Director.

    3. If the taxpayer is not a registrant, he/she shall submit to the Regional Director a letter stating: The name and address of the taxpayer; the name and quantity of each controlled substance to be disposed of; how the taxpayer obtained the substance, if known; and the name, address, and registration number, if known, of the person who possessed the controlled substances prior to the taxpayer, if known.

  3. Once the request is received by DEA, the Regional Director shall authorize the disposition of the controlled substances in one of the following ways:

    • By transfer to person registered under the Federal Controlled Substances Act and authorized to possess such substance

    • By delivery to an agent of DEA or to the nearest office of DEA

    • By destruction in the presence of an agent of DEA or other authorized person

    • By such other means as the Regional Director may determine to assure that the substance does not become available to unauthorized persons

  4. The controlled substances must be disposed of in accordance with the instruction of the Regional Director of the DEA. It is possible in certain cases that the regional director will not permit sale to another person.

  5. Ask the taxpayer to notify the revenue officer or PALS if preliminary arrangements to sell the controlled substances are made. The arrangements should provide that the proceeds will be paid directly to the revenue officer or PALS for credit to the tax liability. If the revenue officer or PALS approves the arrangements, he or she will release the property involved and ask the taxpayer to sign a completed Form 668–E Release of Levy covering these items.

  6. If a public sale is held, offer the controlled substances only as a separate item and not in the aggregate with any of the other property. The controlled substances should be listed as a separate item on the Notice of Sale. The notice should also state that the controlled substances will be sold only to persons or organizations registered under the Federal Controlled Substances Act . In addition, the notice should state that the purchaser must present a completed (in triplicate) preaddressed DEA Form 222c (Federal Order Form) for all controlled substances listed on Schedules I and II of the Controlled Substances Act and a valid DEA registration number.

  7. Copy 1 and Copy 2 of DEA Form 222c should be given to the PALS and Copy 3 retained by the purchaser. The PALS shall attach the original to Form 2436 Seized Property Sale Report and will mail Copy 2 to the nearest Regional Office of the DEA. A Certificate of Sale will be issued to the purchaser.

  8. In the event that no authorized person offers the minimum price determined for the controlled substances, the controlled substances should be declared purchased for the United States. If the controlled substances are not sold when offered for resale as prescribed in IRM 5.10.7 Acquired Property and Property Redeemed by the United States the drugs should be delivered to the nearest Regional Office of the DEA for disposal. See 21 CFR 1307.21. The PALS should secure a receipt for the controlled substances from the DEA and attach it to the memorandum report of disposition of acquired property.

  9. A qualified purchaser must be registered with a valid DEA registration number (or, in the case of certain government officials, exempted from registration) by the DEA at the location where he/she will receive the controlled substances being purchased and in all the schedules of the controlled substances being purchased (e.g., Schedule II narcotics, Schedule II non-narcotics, Schedule Ill narcotics, Schedule Ill non-narcotics, Schedule IV or Schedule V).

5.10.3.18  (04-03-2013)
Contacting Advisory for Seizure Numbers

  1. As soon as possible after seizure, the revenue officer should submit the seizure data to Advisory by fax or by telephone. Do not request a seizure number until after the seizure has been made. Advisory will then assign a seizure number(s) to be used on all documents related to the seizure. A suffix of "CS" will be used to identify courtesy seizures made for another territory or area. One Advisory office in each field collection area should be responsible for assigning seizure serial numbers and should maintain a permanent Seizure Log for all seizures conducted within the area. The format for the seizure numbers will be as follows: 08–01–01–001A (two digit fiscal year — two digit Field Collection Area number — two digit Advisory group number — three digit sequential number with alpha sequence if needed). The Advisory group number should be the number for the Advisory group that is controlling the seizure file. See IRM 5.10.3.10.1 Notice of Seizure Form 2433 - Multiple Formsfor information on the use of multiple seizure numbers and/or alpha suffixes. After the seizure number has been secured, enter the appropriate seizure information into the ICS seizure and sale application.

    Note:

    Enter the seizure number exactly as it was assigned by Advisory, including the hyphens, into the appropriate field in the ICS seizure and sale application. For cases with no alpha suffix or a single letter suffix, enter one or two hyphens to the right of the seizure number for any unused spaces to completely fill this field.

  2. Revenue officers must send all seizure and sale related documents to Advisory within 5 workdays after the related action. Because the PALS are usually conducting the sales outside of their local offices, their sale related documents should be sent to Advisory within 10 workdays of the related action. If there will be a delay, the revenue officer or PALS should submit a memorandum through their manager to the Advisory group manager explaining the delay and providing the anticipated date of submission.

  3. Advisory will review each document upon receipt. Form 13361 Post-Seizure Review Checksheet must be used by Advisory when completing the post-seizure review. The checksheet contains a list of the necessary forms and actions when a seizure has been conducted. The completed review sheet must be included in the seizure case file maintained in Advisory.

  4. In order to clarify and provide for consistency in the post-seizure review process, Advisory's review of post-seizure items will include the following:

    • Proper approval secured (per IRM 5.10.2-1 Asset Type and Approving Official)

    • IDRS research prior to seizure (per IRM 5.10.1.3.1 Verifying the Liability)

    • Consent/Writ secured when required (per IRM 5.10.2.14 Consent or Writ Determination)

    • Form 668B delivery to taxpayer meets legal sufficiency

    • Form 2433 delivery to taxpayer/owner meets legal sufficiency (per IRM 5.10.3.20 Notice of Seizure Form 2433 - Delivery)

    • Pub 1660 provided with Form 2433

    • Not a prohibited seizure (per IRM 5.10.1.2 List of Prohibited Seizures)

    • NFTL filed on all modules

    • Letter 1058 sent for all modules on Form 668B


    In addition to the above, Advisory will also ensure that all statutory requirements related to the action have been satisfied.

  5. Upon request for a seizure serial number or upon receipt of the opening seizure documents, Advisory will establish an "Open Seizure" file. The opening date will be the date of the seizure. Form 13361 should be initiated when the opening documents are received.

  6. For courtesy seizures, the initiating revenue officer will inform the initiating office's Advisory, by memorandum, that the seizure was conducted. This is for information purposes only.

5.10.3.19  (04-03-2013)
Seizure Log

  1. The Seizure Log is to provide consistency in the seizure control information.

  2. Only one "official" Seizure Log will be maintained for each Field Collection Area by the corresponding Advisory Territory.

  3. A separate Seizure Log will be maintained for each fiscal year.

  4. Seizure Logs should be accurate and updated timely as actions occur on a seizure.

  5. Seizure Logs will be maintained in accordance with the instructions listed in the table below.

    Header Content
    Seizure Number xx-xx-xx-xxx Digits 1&2- Last two digits of fiscal year, Digits 3&4- The two digit Field Collection Area 01- North Atlantic 02- Central 03- South Atlantic 04- Midwest 05- Gulf States 06- Western 07- California 15- International, Digits 5&6- Group number of Advisory Group controlling the seizure, Digits 78&9 - Sequential seizure number.
    Alpha Suffix (if applicable) A, B, C,.... Suffix for multiple Forms 2433, Notice of Seizure of a single (IRM 5.10.3.10.1), and/or CS, for courtesy seizure (IRM 5.10.3.18)
    Taxpayer Name Taxpayer name on Form 668B
    Taxpayer TIN Taxpayer Identification Number on Form 668B
    Grade of Bal Due Case Grade of underlying Bal Due assignment
    RO Name Name of RO conducting the seizure
    RO ICS Number RO ICS (TSIGN) Number
    Date of Seizure Date RO conducts the seizure
    Date Seizure Number Issued Date Advisory issues seizure number and opens the ICS 162 module
    Property Type PR-Personal Residence, OR- Other Real Property, VE- Vehicle, CR- Cash Register Contents, OE- Office Equipment and Furniture, ME- Machinery and Equipment,IN- Inventory, SD- Safe Deposit Box Contents, OB- Other Business Property, OP- Other Personal Property
    Perishable Goods Document if perishable goods sale- Y for Yes and N for No
    How Asset Disposed Document how the asset was disposed- Redeemed prior to sale, Released, Bid-in by the Government, or Sold
    Date of Sale (Sealed Bid or Auction) Record the date the RO/PALS conducted the sale (sealed bid or auction). If there is no sale, then record n/a
    Date of Asset Disposition This date directly coincides with the disposition of the asset. Where there are multiple asset dispositions, use the date of the latest one. The proper date to use should be as follows:
    • Redemption of Property Prior to Sale- Document the date the Form 668E Release of Levy or Form 2433 Notice of SeizureParts 3&4 Release of Seizure is signed by either the RO or the PALS

    • Release of Seizure- Document the date the Form 668E Release of Levy or Form 2433 Notice of Seizure Parts 3&4 Release of Seizure is signed by either the RO or the PALS

    • Bid-in by the Government- Document the date Form 2435 Certificate of Sale is signed by the PALS declaring the asset purchased by the United States

    • Sold- Document the date the Form 2435 Certificate of Sale is signed by the RO (Perishable Goods Sale only) or the PALS declaring the asset sold and the full purchase price has been received

    Date Final Paperwork Received from RO or PALS Date on which all required closing documents are received from the RO and/or PALS
    Date ICS 162 Module Closed Date the ICS 162 Module used by Advisory is closed

5.10.3.20  (04-03-2013)
Notice of Seizure Form 2433 — Delivery

  1. The owner is entitled to Notice of Seizure at the earliest possible time after the seizure. See Exhibit 5.10.3–5 for information on the appropriate distribution of the parts.

  2. For individual taxpayers:

    1. If the owner has his/her usual place of abode or place of business in the territory where the seizure was made, the Notice of Seizure is required to be delivered personally or left at that individual's usual place of abode or business by affixing the notice, enclosed in an envelope, on the door if that individual is not available

    2. If the owner has no dwelling or place of business within the territory where the seizure was conducted and cannot be readily located, send the notices by both certified mail, return receipt requested, and regular mail to the owner's last known address.

      Note:

      Delivery to the POA alone does not constitute proper service since attempted personal delivery to the owner is required under IRC 6335(a). For example, you seize a vehicle from an individual taxpayer in the parking lot of a mall where the taxpayer is at work and manages a store. You personally deliver the Notice of Seizure to the taxpayer at the place of business. This meets legal sufficiency for delivery of the seizure paperwork.

  3. For business taxpayers (e.g., corporations, LLCs, sole proprietors):

    1. Deliver the notice personally to a principal of the business, or leave it at the place of business in a sealed envelope addressed to the business, with an employee or by affixing the notice to the door of the business.

    2. If the owner of the seized property has no place of business in the territory where the seizure was made and the owner cannot be readily located, send the notices by both certified mail, return receipt requested, and regular mail to the owner's last known address.

    Note:

    Affixing the notice at the business principal's place of residence without personal delivery to the principal does not meet legal sufficiency for service of seizure and sale paperwork.

    Example:

    You secure a Writ of Entry and seize both the real and personal property of a corporation in your territory. The following day, you and the PALS complete a thorough inventory for use on the supplemental Notice of Seizure. The business principal lives in town and as a courtesy you attempt to personally deliver the notice to the principal's residence (place of abode). The principal is not home so you affix a copy of the notice in a sealed envelope at the residence. As the taxpayer now no longer has a "usual place of business" , and you were unable to personally serve a principal of the business, you must mail the seizure documents to the last known address of the business by both certified and regular mail.

  4. If a third party owner of seized property, or the possessor of seized personal property, has his or her usual place of abode or place of business in the territory where the seizure was made, the Notice of Seizure is required to be delivered as described in (2) and (3) above depending on whether the ownership entity is an individual or a business.

    Note:

    A third party is deemed to have possession if they exercise physical control over an item. The fact that an entity retains some authority over transfer of the asset (e.g., state or local liquor license issuers) does not imply possession.

  5. Note: the terms "place of abode" and "place of business" are usually apparent, but circumstances may arise where this is unclear. If the taxpayer or owner is incarcerated, for example, they may not maintain a residence outside the prison. If personal service is not possible and the facts are unclear as to whether the prisoner maintains a residence, check with area counsel through your local Advisory office for guidance. If a business taxpayer is no longer operating (possibly as a result of the seizure), they no longer have a "place of business" in the territory. Do not rely solely on the last known postal address to identify the usual "place of business" for delivery of seizure and sale documents. If a location appears to be vacant or unoccupied and a principal of the business cannot be served personally, use the exception in 5.10.3.20(3)(b) above to mail the documents to the last known address of the taxpayer.

  6. The revenue officer must provide Publication 1660 Collection Appeal Rights to the taxpayer with Form 2433 to ensure the taxpayer is aware of the 10 business day limitation on appealing the seizure action. Document how the taxpayer received Publication 1660 and Form 2433.

  7. A copy of Form 2433 must be provided to all senior lienholders who were identified during the public records search.

    Note:

    This includes governmental third parties such as local taxing authorities, States with sales or employment tax liens, etc.

  8. Deliver supplemental seizure notices in the same manner as the original.

  9. Although IRC 6335 does not require delivery of seizure notices to an authorized representative, the RO will send a courtesy copy to representatives holding a valid power of attorney.

5.10.3.20.1  (07-03-2009)
Form 2433 — Additional Documentation and Distribution

  1. After delivering parts 1 and 2 of Form 2433, the revenue officer will make the following additional entries on Parts 5, 6, 7, and 8 as shown in Exhibit 5.10.3–4:

    • Enter the assigned seizure serial number in the appropriate spaces (Item 9)

    • Enter the total of all estimated expenses of the seizure and sale in the space provided (Item 10) on parts 5 through 7

    • Enter the inventory value opposite each unit (item or group) of seized property and total (Item 11) on parts 5 through 7

    • Enter the taxpayer's estimated equity (Item 14) on Parts 5 through 7 - The estimated equity should reflect the FMV less any senior encumbrances. If the estimated equity exceeds the taxpayer's liability, the liability should be shown as the estimated equity.

  2. When multiple property types are listed on one or more Forms 2433, the revenue officer must determine the estimated value and taxpayer equity for each property type. This must be done whether the property types are encumbered individually or together. Determine which of the designated property types best describes the seized asset(s) and assign a value to each property type. Subtract any known encumbrances from the total estimated value of that type of property whether it is one or multiple items of that particular type of property. If the property types are encumbered together, the encumbrance must be allocated for each property type. The property types should be listed as follows:

    PR Personal Residence
    OR Other Real Property (any other real property, individual or business, that is not a personal residence)
    VE Vehicles
    LI Licenses
    CR Cash Register Contents
    OE Office Equipment/Furniture
    ME Machinery and Equipment
    IN Inventory
    SD Safe Deposit Box
    OB Other Business Property
    OP Other Personal Property

  3. The purpose of establishing the value of seized property is to comply with the United States Code, which requires a monetary accounting control of seized property by all government agencies and to set a base for establishing the minimum bid.

  4. When Form 2433 is issued before a full inventory is completed, the inventory value of the items specifically described will be shown. The inventory value for the property described as "general" will be shown as "unknown" . The actual inventory values must be included on the "Supplemental" Form 2433.

  5. When safe deposit boxes or cash registers are seized and sealed for contents only and will not be opened until a later date, enter "Unknown" on Form 2433 opposite the description of the safe deposit box or cash register. A second Form 2433 should be completed at the time the box or register is opened, and marked supplemental. The serial number of the original Form 2433 should be used for the supplemental form. See IRM 5.10.3.12 Cash Register Contents and IRM 5.10.3.13 Safe Deposit Boxes for additional instructions.

  6. Enter the location of the property in the space provided on Form 2433, Parts 5 and 6. For real property, show the complete street address with city, state, and zip code if available. For personal property, show the address where property is stored, including a company/vendor name, contact name, and telephone number. IRM 5.10.3.7.1, Controlling Seized Property Stored in IRS Offices for additional information regarding completion of part 6 for this situation.

  7. The revenue officer conducting the seizure, as well as the accompanying Service employee, will sign Form 2433.

5.10.3.20.2  (04-03-2013)
Disposition of Notice of Seizure and Opening Documents for the Seizure

  1. After taking the above actions, the revenue officer will:

    • Retain Parts 3, 4, 5, 7B, and 8A pending disposition of the property (these parts will be transmitted to the PALS group manager if custody is transferred)

    • Retain Part 6 if assets are stored in an IRS office.

    • Transmit the opening documents through the group manager to Advisory within 5 workdays after the seizure

  2. The opening seizure documents include:

    • Form 13719 Pre-Seizure Checklist and Approval Request

    • Form 668–B (and 668-A if applicable)

    • Parts 6, 7A, and 8B, of Form 2433

    • Copy of the Writ or Consent as appropriate

    • Copy of the current deed for real property

    • Preliminary copy of Form 2434-B

    Note:

    Send only a copy of Part 6 if property is stored in an IRS office.

  3. Advisory will retain Part 6 in the "Open Seizure" file and will forward part 7A to Accounting Control/Services for establishment of the necessary accounting controls.

5.10.3.21  (04-03-2013)
Property that is Tampered With, Rescued, or Stolen

  1. If seized property is tampered with, rescued, or stolen:

    • Discuss the facts with the territory manager and document the case history

    • Notify Criminal Investigation as soon as possible

    • Prepare a detailed written report of the incident and include a copy in the case file

    • Submit the report through the group manager to the territory manager for transmittal to the Special Agent in Charge

    • Report losses of property under seizure to the director of the compliance center where the accounting control is maintained

  2. As a general rule, taxpayers are not entitled to receive any credit for the value of their property which has been stolen after the property was seized and prior to its sale by IRS.

5.10.3.22  (04-03-2013)
Transfer of Custody to PALS

  1. The revenue officer will transfer custody of the property to the PALS group manager once the following actions are completed:

    • The seizure is made

    • The assets are secured

    • A detailed inventory is completed

    • Form 2433 is delivered with Publication 1660

  2. Prior to conducting the seizure, the revenue officer will coordinate the timing of the seizure with the PALS, so that transfer of custody of the seized assets can be made in a timely manner (see IRM 5.10.3.2 General). Upon receipt of the revenue officer's documents listed in IRM 5.10.3.22(6), the PALS group manager will create an OI and assign the case to a PALS to complete all actions pertaining to the sale of seized property. Transfer custody of seized property as quickly and efficiently as possible to minimize expenses. Except as noted below in IRM 5.10.3.22(8), the transfer of custody will occur when the PALS receives the case assignment. The revenue officer will document the case history with any reasons for delay in transferring custody of seized assets to the PALS. The revenue officer may not be involved in any of the aspects of a sale under IRC 6335 including:

    • Preparation and delivery of the minimum bid

    • Preparation of the notice of sale

      Note:

      In some cases the revenue officer may deliver the Notice of Sale to the taxpayer (IRM 5.10.4.13 Delivery of Notice of Sale).

    • Advertising

    • Conducting the sale (IRM 5.10.5.1(3) General)

  3. There will be situations when the transfer of custody should be delayed. Delays of transfer may take place if there are challenges to the seizure, such as:

    • A request for release and return of seized property

    • A wrongful levy claim

    • Litigation

    • Bankruptcy

  4. A delay in transfer of custody may also be appropriate if the property consists of evidence held pending a criminal trial.

  5. If the taxpayer indicates that the property will be redeemed (IRM 5.10.4.2, Redemption of Property Prior to Sale) within a short time period and the revenue officer reasonably believes that the taxpayer will take the action, or if one of the conditions for release is present (IRM 5.10.4.3, Conditions for Release of Seized Property) then custody of the property should not be transferred.

  6. Send the following documents, if applicable, via overnight mail to the PALS Group Manager:

    1. Writ of Entry or Consent

    2. Forms 668-B and 668-A as applicable

    3. Undistributed parts of Form 2433

      Note:

      The revenue officer must keep a copy of Form 2433 Part 8A. Part 8A will be used by the revenue officer if they receive payments from the taxpayer and the seized property is released or redeemed prior to sale. See IRM 5.10.4.5, Actions to Release and Return Property.

    4. Form 2434-B (If prepared in Word, the revenue officer should email the PALS Group Manager so it can be updated)

    5. Verification of encumbrances

    6. Copy of deed if real property seized

    7. Copies of all expense documents incurred in the seizure including storage information

    8. Copy of Notice of Federal Tax Lien (Automated Lien System (ALS) copies are acceptable)

      Note:

      The revenue officer will complete the Property is Stored section of parts 5 and 6 of Form 2433 to include the vendor's point of contact name and phone number. For property stored in an IRS office, complete parts 5 & 6 of Form 2433.

  7. In addition, any items the revenue officer may have secured that will be relevant to the sale should be forwarded to the PALS Group Manager. Items may include copies of state tax liens, UCCs, deeds, plat or tax maps, etc.

  8. The PALS Group Manager (GM) will review the file upon receipt for completeness and assign the sale to a PALS on ICS. The PALS Group Manager will forward the file to the PALS to sign for transfer of custody on parts 5 and 6 of Form 2433. The following table indicates when the PALS will sign parts 5 and 6 of Form 2433 to acknowledge transfer of custody:

    If the seized property is: Then:
    Real Estate immediately sign for transfer of custody.
    Personal property as soon as possible, but no more than 30 days, for transfer of custody upon verification of the inventory.
    Intangible property verify required actions to notice third parties were completed and as soon as possible, but no more than 30 days, sign for transfer of custody.

    Note:

    To facilitate and expedite the transfer of custody for large lot or business inventory seizures, the revenue officer should coordinate with the PALS for a completion of a thorough inventory. If the PALS is unable to assist with the inventory on the day of seizure, the revenue officer should prepare a short Form 2433 and arrange for the PALS to assist with the completion of a thorough inventory on a Supplemental Form 2433. See IRM 5.10.3.10 Notice of Seizure Form 2433-Supplemental.

  9. Because of the nature and amount of property involved, it may be necessary for both employees to meet at the site where the seized property is located. The PALS should sign and date parts 5 and 6 of Form 2433 under the property location block when custody is transferred and send a copy of part 5 of Form 2433 to the revenue officer and seizure advisor. The revenue officer should also retain copies of all documents for the balance due case file. These documents include:

    • Form 2433, Parts 7B and 8A

    • Form 668-B

    • Form 2434-B

    • Writ of Entry or Consent (if applicable)

    • Copy of Deed to Real Property

    • Any other relevant information, such as title searches, verification of encumbrances, and copies of expense documents

  10. If the PALS is not located close to the storage site, the revenue officer should also maintain a key to the locked property. If the property is not stored with a commercial vendor, the revenue officer should conduct periodic inspections. Do not enter the property unless there is an emergency or the property is released or redeemed. If the PALS has already taken custody of the assets and the revenue officer will be releasing the property, the revenue officer will initial and date the storage block on part 5 of Form 2433 indicating they are taking custody of the assets. This part should then be sent to the PALS for inclusion in the file. Any entries made into the storage site by either the PALS or the revenue officer should be documented in the case history.

  11. Form 13360 Seizure and Sale Checklist is a two-part checklist that must be used by revenue officers and PALS when conducting a seizure and sale. Part 1 will be completed by the revenue officer and part 2 will be completed by the PALS after custody of the asset is transferred. The checklist contains a step by step listing of seizure and sale procedures with the appropriate IRM citations. Employees should review the applicable IRM references when taking the action and completing the checklist so that all current required guidelines are followed during the seizure and sale. The completed checklist will be submitted with the closing documents by the revenue officer and PALS and will be included in the seizure case file maintained in Advisory.

    Note:

    The Form 13360 Seizure and Sale Checklist should be completed by PALS even when there is no sale.

  12. The revenue officer should remain in contact with the taxpayer in order to resolve the case and determine whether the property should be released. If there are no further anticipated collection actions, consult with the group manager to decide whether to close the bal due case. Consider potential pre-sale activity (e.g., NFTL re-filing, delivery of the Notice of Sale, etc.) that may become necessary prior to disposition of the bal due. In some instances, creation of an OI may become necessary if the bal due case is closed prior to sale. If the RO has closed the balance due case and release of the seizure becomes necessary, the PALS may release the seizure. When the balance due file is closed, the case file must be transmitted to Advisory for association with the seizure file (IRM 5.10.6.13 Revenue Officer Transfer of Closed Case Files to Advisory and Advisory Record Retention). If the case is reported as CNC prior to sale, the RO must ensure that the case closing letter is not sent pending sale.

5.10.3.23  (04-03-2013)
Transfer of Custody of Assets Back to the Field

  1. After the transfer of custody of assets to the PALS, circumstances may change requiring additional case development before the PALS can bring assets to sale. In these situations, transfer of custody of assets back to the revenue officer may be appropriate.

  2. When a PALS determines the need to transfer custody of assets back to a revenue officer, discuss the case with and secure concurrence from the PALS GM. Document the total expenses to date in the case history. If the PALS has already paid for seizure expenses, they should prepare the Form 4844 requesting input of TC 360 to debit the expenses to the taxpayer's account. Forward copies of Form 4844 and invoices to Advisory to associate with the seizure file. The PALS GM should prepare an informational Form 5942 to describe the necessary actions required before the case can move toward sale and close the PALS OI. The PALS GM should send the Form 5942 and the case file to the Collection Territory Manager (TM) for routing back to the collection group. The PALS GM will send a copy of the returned receipt Form 3210 and informational Form 5942 to Advisory for association with the seizure and sale file.

  3. The TM's signature on the Form 3210 acknowledges transfer of custody of the case and assets back to the field. If the field no longer has an open ICS case on the taxpayer, the revenue officer GM will open an OI on ICS for control purposes.

Exhibit 5.10.3-1 
Form 10404, Consent to Enter Private Premises Reference: 5.10.3.3

P–576 (9–78)
CONSENT TO ENTER PRIVATE PREMISES
 The Constitution of the United States guarantees a right to be secure from unreasonable searches of person, house, papers, and effects.
 Having full knowledge of the above guaranteed rights, I, __, consent to entry into premises located at __, by Internal Revenue Service employees for the purpose of seizure, inventory, removing property, if required, and sale of property belonging to __, to collect and satisfy the delinquent tax, interest and penalty liability.
 My signing this consent to entry is not to be construed as an admission by me of the tax liability being collected.
   
  ___________
   (A) Signature and Address of Owner or Rightful Occupant
  ___________
   (B) Title of Corporate Officer Signing Consent
  Date:_________
____________  
Revenue Officer
(Signature, Name and Address)
 

Exhibit 5.10.3-2 
Declaration of Revenue Officer Reference: 5.10.3.5

 
IN THE UNITED STATES DISTRICT COURT FOR THE
__DISTRICT OF__
IN THE MATTER OF THE TAX )  
INDEBTEDNESS OF )  
      )  
      )  
      )  
      ) Misc. No.
      )  
DECLARATION OF REVENUE OFFICER
CITY OF _______)ss,:    
STATE OF _______)    
I, [name of revenue officer], declare:
  1. I am a revenue officer employed in the Small Business/Self-Employed Division of the Internal Revenue Service, Department of the Treasury. As a revenue officer, I have the duty and authority to collect federal taxes by seizure and sale under the provisions of section 6331 of the Internal Revenue Code (IRC), 26 U.S.C.
  2. Assessments of tax, penalty and interest for the following periods have been made against (insert taxpayer's name, address SSN or EIN) on the dates and in the amounts set forth below:
  Form Tax Period Assessment Date Amount Due
  3. The assessments set forth above were made pursuant to IRC sections 6201 and 6203, and pursuant to IRC section 6303, the first notice and demand for payment was given to the taxpayer prior to or on the date that is 60 days after the date upon which each amount was assessed, as set forth above.
  4. The said taxpayer has neglected or refused to pay the full amount of the tax assessed within 10 days after such notice and demand and this neglect or refusal continues.
  5. There is now due, owing and unpaid with respect to such tax, penalty and interest a total amount of $ .
  6. By reason of the assessment, a lien has arisen on all property and rights to property of said taxpayer as prescribed by IRC sections 6321 and 6322.
  7. By reason of the taxpayer's neglect and failure to pay such tax within 10 days after notice and demand, a levy may be made on all property and rights to property belonging to the taxpayer or to which the federal tax lien attaches.
  8. A notice of intention to levy, as required by IRC section 6331(d), was provided to the taxpayer by (method) on (date).
  9. A collection due process notice as required by IRC section 6330 was provided to the taxpayer by (method) on (date).
  (If applicable, discuss the results of any CDP hearing requests. If no CDP notice was given, explain why not.)
  10. et seq. (Discuss in a narrative statement in numbered paragraphs the taxpayer's form of business, the taxpayer's interest in and the address of the premises, general description of the business, general description of the assets located within the premises, and lien filing information. The revenue officer should explain how he/she knows the above information. If the revenue officer has requested permission to enter the premises that are the subject of his/her application and declaration, for purposes of levying on property therein under section 6331 of the Code, and he/she has been refused entry or has been unable to contact anyone with authority to permit him/her to enter the premises, he/she should so state. The narrative statement should be accurate as to the facts of the case. Extraneous information and subjective opinions should be avoided.)
Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury that the foregoing is true and correct. Executed on _______day of _________.
_______ Revenue officer signature
_______Revenue officer name

Exhibit 5.10.3-3 
P–584, Data Sheet Reference: 5.10.3.5

DATA SHEET P–584 (7–77)
Revenue officer's name:
Revenue officer's area office and address:
Taxpayer's name: Taxpayer's social security or employer identification number:
Taxpayer's address:
Business address (if different):
General description of kind of business (corporation, partnership, sole proprietorship, etc.)
Who owns premises to be entered (does taxpayer own, rent, lease, etc.):
Description of business activity:
Kind of tax:
Period:  
Assessed amount:  
Date assessed:  
Current tax balance:  
Statutory additions:  
Date of 1st notice:  
Date of final notice:  
Date of lien filed:  
Where filed:  
Actions taken to collect liability (contacts):
Person entitled to occupy premises has refused consent to entry on ___
  (DATE)
General description of property to be seized:
How does the revenue officer know the above information (own knowledge, taxpayer gave information, third party information, revenue officer inspected the premises, public documents)

Exhibit 5.10.3-4 
Form 2433, Notice of Seizure Reference: 5.10.3.10

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Form 2433    
Instructions    
       
(Parts 1 and 2)—    
  1. If seizure of: Address to:
    Safe deposit box Bank or trust company
    Personal property from taxpayer Taxpayer
    Personal property from possessor Possessor
    Real property, T/P owner of record Taxpayer
    Real property, T/P not owner of record Owner of record
  2. Taxpayer's name and address
  3. Taxpayer's total amount due for the tax modules listed on Form 668-B Notice of Levy. This amount should include all accruals and match the Total Amount Due on Form 668-B. Any differences in amounts should be documented in the ICS history.
  4. Legal description of real property (and the address or street location, if available), or
  5. Detailed description of property
  6. After completing 4 or 5, rule out unused space as shown
  7. If necessary, continue description on additional sheets identified by seizure number and signed by revenue officer
  8. Signature and address of revenue officer and assisting employee; date
Form 2433 (Parts 5 through 8)  
  9. Serial number, see IRM 5.10.3.9.1 for numbering of Forms 2433
  10. Estimated expenses of seizure and sale
  11. Enter the estimated value opposite each item; enter the total in the "Total" block; see IRM 5.10.3.20.1
  12. Personal property - enter address at which property is stored, including contact name and phone number; Real property - show address of the real property. The PALS will sign and date part 5 when custody of the asset(s) is transferred. If the asset is stored in an IRS office, select the box designated "yes" .
  13. Enter manner of disposition of property and amount; property is redeemed when full amount of levy (including expenses) is satisfied; property is released if partial payment is received
  14. Taxpayer's estimated equity (FMV less senior encumbrances - if the estimated equity exceeds the taxpayer's liability, the liability should be shown as the estimated equity)
       
• Parts 3 and 4, releases of levy, can be addressed to the party from whom the assets were seized, the taxpayer, or the owner, as appropriate.
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Distribution of Form 2433
Part Number Distribution
1 For taxpayer
2 Personal property — for person in possession of property if property is seized from someone other than the taxpayer
  Real property — for owner of record (if not the taxpayer)
3 To Advisory for inclusion in seizure file after seizure is closed
4 For person to whom property is released
5 Balance Due file
6 Original to Advisory for control and filing with seizure and sales records unless property is stored in an IRS office. If stored in an IRS office, a copy is sent to Advisory and the original is retained by the employee with custody of the asset until disposition of the asset.
7A To Advisory for processing to Accounting Control/Services to establish accounting control for inventory value of seized property. Part 7A should be forwarded in every case for control purposes and audit trail. If redemption or release is anticipated within 5 working days, part 7A need not be completed at time of seizure. If not redeemed or released within 5 days, complete and process part 7A.
7B To Advisory for forwarding to Accounting Control/Services after property disposition.
8A With proceeds of sale to submission processing to be deposited in the Deposit Fund Account. If no sale or if only cash or checks are seized, so annotate part 8A and forward to Advisory to be made part of the seizure file.
8B To Advisory for completion of seizure activity report
Special Situations
Cash Register Contents Parts 6, 7 and 8—Annotate with legend "cash register contents" and forward to Advisory.
Safe Deposit Boxes Part 1—To taxpayer
  Part 2—To official of bank or trust company
  Parts 6, 7, and 8—Annotate original notice of seizure with the following: "contents of safe deposit box."
All other parts should be processed as shown in the beginning of this exhibit.

Exhibit 5.10.3-5 
Letter P–336, Transmittal of Non-Marketable Securities to Bureau of Public Debt Reference: 5.10.3.14 and 5.10.3.15

(Because of the limited need, a form will not be provided by Headquarters for this purpose.)
   
(AREA DIRECTOR'S LETTERHEAD)
   
Bureau of the Public Debt
Department of the Treasury
POB 7015
Parkersburg, West Virginia 26106
Date:____
   
To Whom It May Concern:  
The United States securities described below were seized under levy to satisfy internal revenue taxes due the United States from (taxpayer's name) in the amount of $ ______.
Kind ofSecurity Series Serial Number Denomination Issue Date Form ofRegistration
           
The securities are presented for redemption so that the proceeds may be applied to the tax indebtedness of the taxpayer.
  Sincerely yours,


   
  Advisory Territory Manager

Exhibit 5.10.3-6 
Letter P–337, Transmittal of Matured Securities to Federal Reserve Bank Reference 5.10.3.15

(Because of the limited need, a form will not be provided by Headquarters for this purpose.)
  (AREA DIRECTOR'S LETTERHEAD)  
     
REGISTERED MAIL  
(Name and address
of Federal Reserve Bank
 
     
To Whom It May Concern:  
The matured United States securities described below, issued in bearer form, were seized under levy to satisfy internal revenue taxes due the United States from (taxpayer's name and address).
Kind of Security Series Denomination Issue Date Maturity (or Called) Date
         
The securities are presented for redemption so that the proceeds may be applied to the tax indebtedness of the taxpayer. Please send a check payable to "United States Treasury," and the copy of this letter, to the address below. Thank you for your cooperation.
   
  Sincerely yours,
   
  Advisory Territory Manager
Enclosure: Copy of this letter  
Mailing Address:  

Exhibit 5.10.3-7 
Letter P–415, Transmittal of Form 2433 to Patent Office Reference 5.10.3.16

(Because of limited need, a form will not be provided by Headquarters for this purpose.)
    (USE APPROPRIATE LETTERHEAD)
  Commissioner of Patents
  Washington, D.C. 20231
  ATTN: Assignment Division
To Whom It May Concern:  
Please record the enclosed Part 2 of Form 2433 regarding:  
Patent Number—  
Date—  
Inventor—  
Invention Title—  
The recording fee of $________ is enclosed. Thank you for your assistance in this matter.
   
  Sincerely,
   
  Property Appraisal and Liquidation Specialist

Exhibit 5.10.3-8 
Taxpayer/Responsible Officer's Acknowledgment of Opportunity to Download Computer Information Reference 5.10.3.7.4

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Exhibit 5.10.3-9 
Form 2433 - Estimated Equity Reference 5.10.3.19

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In this example, there is a balance of $720 remaining on the loan recorded on the vehicle and a balance of $800 remaining on the financing statement recorded on the inventory and equipment.

The first step is to determine the percentage of the encumbrance that is applicable to each property type. Since the vehicle is encumbered separately, the total encumbrance of $720 is deducted from the FMV for an estimated equity amount of $2,800.

Since the other assets are covered by the same encumbrance, you must first determine what percentage each of the two property types contributes toward the combined fair market value of $2,950 for the two property types:

Office Equipment 1950/2950 = .66 (66%)
Inventory 1000/2950 = .34 (34%)

The next step is to multiply these percentages by the total encumbrance to determine the amount of the encumbrance applicable to each property type:

Office Equipment 800 x .66 = $528
Inventory 800 x .34 = $272

The final step is to deduct the encumbrance from the fair market value in order to determine the estimated equity for each property type:

Office Equipment 1950 - 528 = $1,422
Inventory 1000 - 272 = $728

The estimated equity of all three property types would then be added together for a total taxpayer's estimated equity of $4,950.


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