Purpose: This section provides revenue officers guidance relating to the seizure of assets to collect upon delinquent tax liabilities.

Audience: This section is for Collection employees involved in the seizure of assets.

Policy Owner: Director, Collection Policy.

Program Owner: Collection Policy, Enforcement.

Primary Stakeholders: The primary stakeholders are revenue officers, advisors and Property Appraisal and Liquidation Specialists (PALS).

Program Goals: Provide guidance and procedures on seizure of assets.

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.

After approval has been secured, pre-seizure preparation should be completed and the revenue officer should conduct the seizure. For personal property, coordination with the PALS before, during, and after the seizure is essential to ensure an orderly custody transfer.

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.

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

See IRM 5.10.1.2(3), Overview, regarding the step by step seizure and sale procedure listing on Form 13360, Seizure and Sale Checklist, for use by revenue officers and PALS.

After securing approval for the seizure, the revenue officer must determine when the seizure will be conducted. Coordination with the PALS is required at this point to facilitate personal property custody transfer. The revenue officer must determine how many assisting employees will be needed, how the property will be inventoried, what equipment will be necessary, whether all necessary forms have been prepared, the need for a consent or writ, arrangements required for the transportation and storage of the assets, and whether an armed escort will be required. After receiving approval for the seizure, attempt to contact the PALS to let them know the scheduled seizure date.

Having the appropriate number of employees present for a seizure is critical. Two employees (at least one of whom must be a revenue officer) are required for all seizures. Additional employees may be required depending on many factors, such as the type and quantity of assets, complexity of inventory, degree of cooperation from the taxpayer, landlord/vendor/utility issues, and need for removal and storage of assets

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

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

The assisting IRS employees should be briefed on the background of the case, inventory issues, transportation and storage plans for the assets, potential for conflict, and any other factors relevant to the seizure.

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

If tenant-occupied property is involved in the seizure, the revenue officer will take whatever steps are necessary to ensure that innocent third parties are not financially injured by the seizure action. Also consider the safety and welfare of innocent third parties, livestock, and domestic animals.

If the property to be seized is located on private premises, either the written consent of the rightful occupant 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, to secure the appropriate written consent. The revenue officer should explain that:

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.

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:

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.

As a general rule, the seizure should be made not more than 30 working days from the date of consent. If the seizure must be made more than 30 days later, a new consent should be requested.

Distribute copies/original of the consent as follows:

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

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.

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 IRS. 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.

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.

In cases where exigent circumstances exist, the revenue officer:

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

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. The data sheet may be used to answer any questions from the judge or magistrate.

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.

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.

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:

Generally, writs are in effect for ten days, but a judge or magistrate may limit or increase the time parameters.

For certain cases, it may be advisable to request that the writ allow for multiple entries of the same premises over a period of time. For example, if cash register contents are the only asset to be seized, successive levies on several days may be more efficient than requesting a new writ for each levy. Consult Counsel through Advisory to determine the language required on the affidavit in this context.

To conduct the seizure the revenue officer should proceed to the property location to take possession of the property unless the exception below applies. When a consent or Writ of Entry is required see IRM 5.10.3.8(6). If the taxpayer is present serve Form 668-B, read the statement on the form to the taxpayer or permit the taxpayer to read it. The revenue officer should answer any questions the taxpayer may have regarding the seizure. If the taxpayer is not present see IRM 5.10.3.8(7) regarding contacting the taxpayer. When personal property belonging to the taxpayer is in the custody of a third party see IRM 5.10.3.8(4). For real property in possession of a third party, see IRM 5.10.3.9(6). When unoccupied improved real estate is seized, Form 668-B and Form 2433 delivery to the taxpayer is sufficient to effect the seizure, however warning notices should be attached to the property per IRM 5.10.3.11.1.

Regardless of whether the taxpayer or a third party has custody of the property, Part 3 of Form 668–B must be:

For a business taxpayer (e.g., corporation, LLC) not including a sole proprietor:

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.

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 5.11.2.2.9, Refusing to Comply with a Levy. If the attendant provides the keys, they should be protected in accordance with the guidance outlined in IRM 10.2.15, Minimum Protection Standards (MPS). Storing keys in a safe or locked filing cabinet in a local office will generally provide sufficient protection.

When a consent or Writ of Entry is required, 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 a 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 the third party with Form 668-A at the time of the seizure. Distribute copies of the writ to:

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 5.10.3.9, Notice of Seizure Form 2433 - Delivery.

The seizing revenue officer should consider employee and customer impact when determining when to conduct the seizure. Sometimes a seizure is made and the taxpayer's employees and customers are present. In this situation the revenue officer should:

The seizure should be discontinued if the taxpayer makes:

During or after the seizure, if the taxpayer states that a bankruptcy petition was filed, secure the appropriate bankruptcy petition information and contact Insolvency for additional instructions.

If the taxpayer claims an economic hardship situation, the revenue officer should determine, based on the particular circumstances whether the seizure action should be discontinued. See IRM 5.10.3.10, 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).

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.

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. Discontinue seizure and report the assault to TIGTA (see IRM 5.17.3.6.4.1, Criminal Acts).

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

For an individual taxpayer (including sole proprietor):

If property is owned by and seized from joint owners (e.g., husband and wife), each owner should be served separately. Service may or may not be simultaneous, but each owner should receive a separate Form 668-B, 2433, etc.

If a seizure is made based on a joint liability but there is only one owner, do not provide notice to the non-owner taxpayer.

For a business taxpayer (e.g., corporation, LLC) but not sole proprietor:

When a third party owns or possesses seized property, the Notice of Seizure is required to be delivered as described in (2) and (5) above depending on whether the entity is an individual or a business. The statutory requirements for delivery of the Notice apply to the owner or possessor, not the taxpayer.

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 IRM 5.10.3.9(5)(b) above to mail the documents to the last known address of the taxpayer.

The revenue officer must provide Pub 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 Pub 1660 and Form 2433.

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

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

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.

If personal service is possible but places the revenue officer in a hazardous situation (e.g., taxpayer identified as potentially dangerous), attempt to serve the taxpayer in an IRS office where there is sufficient security or secure an armed escort. If neither of these options are available, consult area counsel through Advisory.

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.

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).

Seizures involving perishable goods require immediate management attention. Local management will provide for an accelerated review process based on the merits of each case.

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 5.10.1.6.2, Collection Appeal Rights). The taxpayer will use Form 9423, Collection Appeals Request, to request a CAP hearing.

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 Criteria, for other situations that qualify for TAS referral).

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 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 (unless the taxpayer prefers to send it to TAS personally).

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.

Prior contact with vendors should have been made so that the vendor is available on the day of the seizure. The revenue officer should coordinate the timing of the vendor’s arrival to prevent unnecessary expenses if the seizure sale is delayed or cancelled. If available, a cell phone should be used to coordinate the timing of the vendor’s arrival so the revenue officer does not have to leave the seizure site. (See IRM 5.10.2.7, for instructions regarding payments to vendors.)

When only real estate is seized, neither padlocking the premises, changing the locks nor accepting keys from the taxpayer or other party is appropriate. Possession of the real property depends on state law, see IRM 5.17.3.7.4.1(3), Delivery of Possession.

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.

If a taxpayer seeks personal items while seizing a vehicle or business premises beforeForm 2433 is delivered, advise the taxpayer that entering the seized property to recover the personal items during the seizure is not permitted. During the seizure process, at the revenue officer’s discretion, the revenue officer and witnessing employee may personally remove the items and give them to the taxpayer. Do not include these items on the Form 2433 as they are not seized property and do not use Form 668–E, Release of Levy, as the items are not seized property. The ICS history may be documented outlining the items given to the taxpayer.

If a taxpayer seeks personal items in a seized vehicle or business premises afterForm 2433 is delivered, 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 5.10.4.16, Actions to Release and Return Property, when the taxpayer refuses to sign Form 668–E.

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.

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.

For services less than or equal to $2,500 see IRM 5.10.2.7.1.

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

For services that exceed $2,500 see IRM 5.10.2.7.2

Prior to incurring any expense, the revenue officer or PALS must ensure that there are sufficient funds available to satisfy the expected expenses.

As soon as possible the revenue officer will prepare Form 2433, Notice of Seizure, in all cases in which property has been seized as shown in Exhibit 5.10.3-1. Form 2433 is a multi-part form with copies for:

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 5.10.3 sections 14 through 22 include additional instructions when any of the following assets are seized:

For real property, the full legal description need not be used. The address (or street location if available), type of structure, approximate size of building, intended usage, and a description of the file location of the most recent deed generally describes the property in sufficient detail.

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

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 5.10.3.21, Firearms, for the procedures to follow when firearms are found in a seized vehicle.

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.

For inventory purposes the detailed description of individual items may be waived for groups of like items reasonably described.

Check the box indicating whether the taxpayer was present at inventory of the seized property. If the taxpayer was not present, provide the reason.

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.

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

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

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.

As soon as possible, determine the potential for redemption or release of any alcoholic beverages. The revenue officer should advise the taxpayer that the taxpayer 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.

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.

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.

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

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.

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

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:

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.

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.

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

Issue a Form 809 receipt for the amount of cash seized from the cash register, see IRM 5.1.2.7.2, Cash Payments. Write "Contents of cash register seized" across the top of Form 809.

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.

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).

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 5.10.3.15.1, Cash, Checks, and Money Orders, for additional information regarding checks and money orders.

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 5.10.3.17.1, United States Savings Bonds, and IRM 5.10.3.18, United States Marketable Securities, for disposition of savings bonds and securities.

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

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

The cash register should be opened in the presence of two IRS 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.

Serve a Form 668–A, Notice of Levy, 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.

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.

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.

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).

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 5.10.3.9, Notice of Seizure (Form 2433 - Delivery).

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.

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 5.10.3.16.1, Court Order to Open a 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.

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 5.10.3.13.2, Notice of Seizure Form 2433 - Supplemental) will be prepared describing the assets.

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.

The United States Department of the Treasury issues (i.e. creates) a variety of marketable and non-marketable securities, most of which are now issued (i.e. created) in uncertificated, electronic form. Many prior issuances remain outstanding in certificated (paper) form. The form in which the security was issued must be considered. See https://www.treasurydirect.gov/instit/marketables/marketables.htm for more additional details.

Marketable United States securities are issued in the form of:

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.

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.

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.

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.

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.

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.

A letter (in duplicate) similar to Letter 5745, United States Patent Office Form 2433 Recordation Request, 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.

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 668-B on the Patent Office.

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.

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:

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).

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:

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

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.

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.

If firearms for personal use are unexpectedly encountered during a seizure, contact Criminal Investigation (CI) or TIGTA immediately so they can respond to the seizure location to advise the revenue officer of the appropriate action and provide protection for the revenue officer. Do not list these items on Form 2433 unless they are actually being seized.

If firearms are seized, contact CI for assistance in making a determination as to whether the arms are contraband or subject to forfeiture under the Gun Control Act of 1968 or by virtue of state or local law. This action should be taken prior to any disposition of the seized arms. See IRM 5.10.4.16, Actions to Release and Return Property, for the procedures to release property when another government agency becomes involved. If the taxpayer is a convicted felon, do not release the firearms to the taxpayer. Contact area counsel, CI, and ATF for guidance on the appropriate disposition of the property.

After all the required actions pertaining to the seizure of firearms have been taken and the seizure is executed, transfer custody of the property to the PALS. The PALS may either conduct the sale or outsource the sale to an ATF-licensed auctioneer. If the PALS conducts the sale, he or she must use an authorized dealer to conduct any required background checks and prepare sale paperwork required by law. The PALS will issue a Form 2435, Certificate of Sale of Seized Property, once the authorized dealer has completed the required actions and verified the purchaser meets the legal requirements to purchase, own, or possess a firearm.

Before seizing property housing a United States Postal Service facility:

The IRS must seize virtual currency when levies are unsuccessful.

Once the private key information is secured by the revenue officer and the revenue officer serves the taxpayer Form 668-B, the third-party vendor needs to complete the sweep as soon as possible so that the virtual currency is no longer accessible to the taxpayer. If the taxpayer refuses to provide the private key or it cannot be obtained, the RO cannot complete the seizure. Without the private key, the IRS cannot take possession of the virtual currency.

If the revenue officer comes across virtual currency while completing the seizure of another asset, the revenue officer should ask the taxpayer to provide the private key information. Once that information is received, the revenue officer should contact PALS immediately to let them know they found virtual currency while conducting another seizure. The revenue officer would then take the steps described in IRM 5.10.1.5.3.11, Equity Determination - Virtual Currency, and IRM 5.10.1.13.10, Virtual Currency, (i.e. contact third-party vendor, estimate expenses, etc.). If there are net proceeds, and seizure of the virtual currency wouldn’t otherwise be prohibited, the revenue officer will add the virtual currency to Form 2433, Notice of Seizure, for the current seizure or provide a supplemental Form 2433, if applicable.

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 5.10.3.13.1, Notice of Seizure Form 2433 - Multiple Forms, for 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.

Upon request for a seizure serial number or upon receipt in the group of the opening seizure documents, Advisory will open an NFOI on ICS within seven calendar days. The opening date will be the date of the seizure. Form 13361 should be initiated when the opening documents are received.

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. When a PALS/RO misses a specific deadline, follow-up action should be initiated no later than ten (10) calendar days after the missed deadline.

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.

Document 12474, Seizure File Folder Tabs, will be used by Advisory employees when assembling seizure file folders. The employee should assemble the case file in a neat fashion and it should contain all required documents.

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:

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.

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.

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

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

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

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

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

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

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.

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

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 5.10.3.3, General). Transfer custody of seized property as quickly and efficiently as possible to minimize expenses. Upon receipt of the revenue officer's documents listed in IRM 5.10.3.9.2(4), the PALS group manager will create an OI and assign the case to a PALS to complete and/or coordinate all actions pertaining to the sale of seized property. The revenue officer will document the case history with any reasons for delay in transferring custody of seized assets to the PALS per IRM 5.10.3.26(7) & (8).

The PALS Group Manager (GM) will review the documents listed in IRM 5.10.3.9.2 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:

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:

Any revenue officer who has taken any collection actions at any time against the taxpayer whose assets have been seized may not be involved in any of the aspects of a sale under IRC 6335 including:

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:

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

If the taxpayer indicates that the property will be redeemed (IRM 5.10.4.13, 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 5.10.4.14, Conditions for Release of Seized Property) then custody of the property should not be transferred.

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

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.

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.

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, Request for Terminal Action, 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, Reviewer’s Report - Technical Services Advisory, 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 group manager (GM) for routing back to the RO. The PALS GM will send a copy of the returned receipt Form 3210, Document Transmittal, and informational Form 5942 to Advisory for association with the seizure and sale file.

The GM'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.