7 August 2001

See contents of full IRS Handbook of Criminal Investigation: http://cryptome.org/irs-ci/irs-ci.htm

Handbook 9.7
Asset Seizure and Forfeiture


Chapter 11
Abandoned Property

Contents

[9.7] 11.1  (04-30-1998)
OVERVIEW

  1. When executing a seizure warrant or Warrant of Arrest In Rem, assets may be seized that are abandoned by the lawful owner or by an unknown owner. This chapter deals with the issues that arise when Criminal Investigation (CI) possesses these abandoned assets. The following sections are addressed:
    • Abandonment Process
    • Abandonment Procedures Where The Lawful Owner Is Known
    • Abandonment Procedures Where The Lawful Owner Is Unknown
    • Equitable Sharing Of Abandoned Property
    • Tracking Abandoned Property
    • Claims By Unknown Owner Regarding Abandoned Property
    • Disposition Of Abandoned Property
    • Official Use Of Forfeited Property-Abandoned Assets

[9.7] 11.2  (07-11-2000)
ABANDONMENT PROCESS

  1. The abandonment process allows the Service to process property in its possession for which no known owner exists or where the lawful owner will not take possession. This occurs when currency or personal property is seized or comes into the government's possession but cannot be forfeited. Property may be seized as evidence incident to a search warrant. Often the property is no longer needed as evidence, but returning it may not be possible if the owner refuses to take custody or is a fugitive. Another example is personal property and furnishings left in a residence that is forfeited. If the owner will not take custody of the property or cannot be located, abandonment may be the only available option to dispose of the property.
  2. The seized property contractor will not take custody of property unless it is specifically identified within the seizure order. Therefore, the Service is responsible for all other property found with the seized property. Exhibit 9.7.11-1 is a checklist to assist in the abandonment process.
  3. Abandoned assets must be inventoried like any other seized asset, except a separate inventory Form 4052, Personal Effects Inventory and Receipt (Exhibit 9.7.7-9) is used.
  4. After seizing any abandoned currency or personal non-currency property of any value, the special agent will contact the District Asset Forfeiture Coordinator (AFC) to obtain an AFTRAK number from the AFTRAK Unit.
  5. Form 4008, Seized Property Report, and Form 4008S, Supplemental Seized Property Report, will be prepared and forwarded to the District AFC. The related Subject Seizure Investigative Number, or other related number, associated with the abandonment seizure, must be reflected on these forms.
  6. Efforts made to locate the lawful owners or potential claimants must be documented. When the lawful owner or claimant can not be found constructive notice must be given such as in newspaper advertisements.
  7. Storage and maintenance of seized abandoned property will be the same as with any seized asset. These procedures are discussed in Chapter 6, Seizure Planning, and Chapter 8, Storage of Seized Assets in this Handbook (9.7).
  8. A Seized Property File will be maintained for the asset.
  9. If an asset is converted from an abandonment seizure to a forfeiture seizure, updated Forms 4008 and 4008S must be submitted.

[9.7] 11.3  (07-11-2000)
ABANDONMENT PROCEDURES WHERE THE LAWFUL OWNER IS KNOWN

  1. Within ten (10) calendar days following a determination that property is no longer required to be retained as evidence and/or is not being forfeited, the Service will attempt to notify the lawful owner telephonically or in person and advise that the property may be reclaimed. This action will be documented by memorandum.
  2. The lawful owner must be advised that in order to claim the property, a proper claim must be filed within twenty (20) calendar days from this notice and that the property can only be released to the owner or the owner's authorized agent. This contact should be documented by a memorandum to the file.
  3. If the property is not claimed by the lawful owner by the end of the twenty (20) day informal claim period, the Special Agent in Charge (SAC) should send written notification, via registered mail return receipt requested, to the owner's last known address (Exhibit 9.7.11-2), advising the owner that if he fails to claim the property within thirty (30) days of receipt of the notification letter, title to the property will vest in the U.S.
  4. If the property is not claimed after thirty (30) days from receipt of the notification letter, the Director of Field Operations will declare the property "abandoned" by executing Form 9445, Declaration of Abandonment Vesting Title to the U.S. (Exhibit 9.7.11-3). If a claim is filed, see Chapter 9, Claims To Assets Seized For Forfeiture, in this Handbook (9.7).

[9.7] 11.4  (07-11-2000)
ABANDONMENT PROCEDURES WHERE THE LAWFUL OWNER IS UNKNOWN

  1. If the lawful owner of the property is unknown, the AFC and/or special agent must initiate abandonment proceedings against the property pursuant to Federal Statutes and Regulations (See 40 U.S.C. Sections 304g and 484(m) and 41, C.F.R., 101-48 General Services Administration (GSA)).
  2. If the property's value is $100 or less and the lawful owner is unknown, the property may be declared summarily "abandoned" by the Director of Field Operations in the district where the action was initiated. If the district decides to retain the property for official use, the property will be processed for inventory purposes as outlined in Chapter 10 of this Handbook (9.7), following vesting of title.
  3. If the property is valued over $100 and the lawful owner is unknown, the district will place a newspaper advertisement as outlined below.

[9.7] 11.4.1  (07-11-2000)
Newspaper Advertisements

  1. The district will place a newspaper advertisement in a publication of general circulation within the federal judicial district where the property was recovered.
  2. The advertisements should appear once a week for three consecutive weeks and will contain the following information:
    1. Property description including model and/or serial number(s). (Currency serial numbers are omitted from newspaper
      advertisements.)
    2. The name of the person from whom the property was seized and the exact location or specific address where it was seized or recovered. If the property was recovered from a conveyance, i.e., a vessel, vehicle or airplane, a complete description of the conveyance must be included.
    3. The address of the field office that has physical custody of the property.
    4. A statement advising anyone who desires to file a claim for the property as lawful owner must do so before the expiration of the thirty (30) day claim period stated in the advertisement.
    5. A complete mailing address for the field office where the claim for the property should be filed, and where additional information concerning the property may be obtained.
  3. If no claim is made for the property upon expiration of the advertised thirty (30) day claim period, the Director of Field Operations will declare the property "abandoned" by executing Form 9445, Declaration of Abandonment Vesting Title to the U.S., (Exhibit 9.7.11-3) thereby formally vesting title with the U.S. If a claim is filed, see Chapter 9, Claims To Assets Seized For Forfeiture, in this Handbook (9.7).

[9.7] 11.5  (07-11-2000)
EQUITABLE SHARING OF ABANDONED PROPERTY

  1. Abandoned or unclaimed property cannot be shared with other law enforcement agencies.
  2. The forfeiture of abandoned or unclaimed property should be considered pursuant to 18 U.S.C. Sections 981 or 982 when equitable sharing with other law enforcement agencies is an issue. However, other law enforcement agencies can apply for the property through GSA regulations (See 41 C.F.R. 101-48).

[9.7] 11.6  (04-30-1998)
TRACKING ABANDONED PROPERTY

  1. In order to account for all abandoned property, the SAC will maintain a seizure file by fiscal year of all such actions containing the following information:
    1. Investigative File Name.
    2. Investigative Number.
    3. AFTRAK Number.
    4. Date of Seizure.
    5. Place of Seizure.
    6. Date of Notice.
    7. Date of Advertisement.
    8. Date of any Claim.
    9. Date of Declaration of Abandonment.

[9.7] 11.7  (07-11-2000)
CLAIMS FOR ABANDONED PROPERTY

  1. The Service must advise a claimant that submission of a proper claim in the form of a sworn statement is required and that includes the following information:
    1. A full description of the property, including model and serial number(s), if known.
    2. A statement describing the vested interest in the property, e.g., claimant is lawful owner, mortgagee, etc., supported by a Bill of Sale, Mortgage, or other acceptable documentation.
  2. Claims for abandoned property will be processed by the AFC and/or special agent in the same manner as a Petition for Remission or Mitigation of Forfeiture. CI shall review claims for completeness. The supervisory special agent (SSA) will be given a copy of the claim to ensure an investigation to verify the merits of the claim is conducted within 45 days of receipt. The results will also contain the SAC's recommendation whether to grant or deny the claim, and will be transmitted in a petition investigation format through District Counsel to Assistant Chief Counsel (Criminal Tax) for review and advice. The original package will then be transmitted to the Chief, CI for a final determination, regardless of the property's value.
  3. If the Chief, CI grants the claim, the Director of Field Operations will provide the claimant with written notification of such by certified mail, return receipt requested. The notification should include any conditions or procedures regarding the release of the property to the claimant, including the execution of a Release of Claim (Exhibit 9.7.6-29).
  4. If the claim is denied, the Director of Field Operations will provide the claimant with written notification of the decision with the reasons for denial. The claimant has ten (10) days from the receipt of the denial notice to submit a request for reconsideration to the Chief, CI. The request must include only new or additional facts not previously considered. Only one such request will be honored.
  5. Should a claim be filed prior to vesting of the title in the U.S., the basis for granting or denying the claim will be based on a claimant's proof of a valid, good faith interest in the property.
  6. Should a claim be filed after the vesting of title in the U. S., the basis for granting or denying the claim will be the claimant's proof of a valid, good faith interest in the property, and the additional requirement that the claimant demonstrate he did not have actual or constructive notice of the abandonment proceedings.
  7. Constructive notice is presumed from the advertisement of the property in a newspaper having general circulation within the judicial district where the property was recovered, unless the claimant can clearly establish that he was not in a position to receive constructive notice, e.g., he was out of the country. It is recommended that the district document its efforts to identify and locate possible owners or claimants to support its reliance upon constructive notice.
  8. A lawful owner may file a claim for the property at any time within three years from the date title vested in the U.S. The claim process described above will apply. If such a claim is granted, title will revert to the lawful owner who will be reimbursed in accordance with the provisions set forth in the Federal Regulations (See Title 41, C.F.R., 101-48.102-4, or Title 41, C.F.R., 101-48.305-1).
  9. If the district desires to retain abandoned or unclaimed property for official use following abandonment proceedings, the request will be processed like any asset put into official use. See Chapter 10, Disposition of Forfeited Property, in this Handbook (9.7).

[9.7] 11.8  (07-11-2000)
DISPOSITION OF ABANDONED PROPERTY

  1. Property which is forfeited through abandonment procedures may be disposed of as noted in Chapter 10, Section 10.12, in this Handbook (9.7).

[9.7] 11.9  (07-11-2000)
OFFICIAL USE OF FORFEITED PROPERTY-
ABANDONED ASSETS

  1. Same as in Chapter 10, Section 10.7 of this Handbook (9.7).
Exhibit [9.7] 11-1  (04-30-1998)
Abandonment Checklist
>
ABANDONMENT CHECKLIST
(Prepared by the AFC/CTI)
INITIAL REPORTING
[ ] Completed Form 4008. Minimum requirements include:
    § CIMIS and AFTRAK#;
    § estimated/appraised value
    § date property was recovered
    § location from which property recovered;
    § name and address(es) of person(s) from whom property was recovered/registered;
    § name/address/telephone # of agent recovering property;
    § name and address(es) for person(s) incarcerated requiring notice (if applicable).
[ ] Facts and circumstances surrounding recovered property.
[ ] Copies of expenses incurred in recovering, appraising, storing, and maintaining the property (if applicable).
FOLLOW-UP REPORTING
[ ] Copies of REGISTERED RETURN RECEIPT notification letters to person(s) from whom property was recovered and/or registered.
[ ] Copy of the following:
    returned letter envelope, or;
    domestic return receipt, if service was accepted.
[ ] Copy of newspaper advertisement as it appears or collectively following the last run.
[ ] Statement of whether or not a claim has been filed for the property following expiration of the thirty (30) day claim period. For further information on processing claims, see Handbook 9.7, Chapter 11.
Exhibit [9.7] 11-2  (07-11-2000)
Letter to Known Owner To Claim Property
>
INTERNAL REVENUE SERVICE DEPARTMENT OF THE TREASURY
Director, Field Operations
Criminal Investigation
Person to Contact:
(Name of Receiver) Joe Smurf, Special Agent
(Address of Receiver) Telephone Number:
(City, State, Zip) (xxx) 123-4567
Refer Reply To:
CI:x:xxx
"AFTRAK #"
Date:
(enter todays date)
Dear Party(s) in Interest:
On (Date of Seizure), the Internal Revenue Service seized the property described as follows from the address of (at whose address the seizure took place) (Describe Property).
You are hereby advised that you have thirty (30) days from the date postmarked on this letter to file a claim for the above-described property. If a claim is not filed by that date, title will vest in the United States.
This property may be claimed by you or your authorized representative by contacting (Name of Case Agent) located at (Address of Field Office or Resident Agency), telephone (XXX) XXX-XXXX.
The property will be released to you or your authorized agent upon the completion of an IRS Release of Claim and Form 5914, Release and Receipt of Property.
Sincerely,
(Name)
Special Agent in Charge
(To be sent REGISTERED RETURN RECEIPT)

Exhibit [9.7] 11-3  (04-30-1998)
Sample Declaration of Abandonment Vesting Title To The U.S.

Internal Revenue Manual  

Hndbk. 9.7 Chap. 11 Abandoned Property

  (07-11-2000)

05/02/2001 14:30:05 EST