Purpose: This section provides guidance for collection staff in preparing for the sale of seized assets.

Audience: This section is for Collection employees preparing for the sale of seized assets.

Policy Owner: Director, Collection Policy.

Program Owner: Small Business/Self Employed office of Headquarters Collection Policy.

Primary Stakeholders: The primary stakeholders are Revenue Officers, Advisors and Property Appraisal and Liquidation Specialists (PALS).

Program Goals: Provide guidance and procedures for the preparation of sale of seized assets.

This IRM provides guidance to revenue officers, Property Appraisal and Liquidation Specialists (PALS), and Advisory employees regarding actions taken prior to the sale of seized property.

IRC 6335(e)(1)(A) requires that a minimum bid price be established for seized property offered for sale. The minimum bid price will be determined by the PALS assigned to the sale. The primary purpose of a minimum bid price is to avoid selling the property at substantially less than the forced sale value.

The minimum bid price must be correctly determined to provide for the equitable preservation of the property value; however, Policy Statement 5-35 limits the amount of the minimum bid to the amount necessary to recover the lien interest in the property plus costs.

The PALS must determine by which method the seized property will be sold. This determination must be documented, even when outsourcing the sale to a vendor. Seized property may be sold either by:

Relevant factors should be considered when selecting the method of sale, including:

The use of sealed bid sale provisions may reduce the likelihood of disruption when the potential exists for taxpayer or third party resistance to the sale. Select the method of sale that will maximize the net proceeds.

The seized property may be offered for sale:

Consider offering general use property as both separate items/groups of items and in the aggregate. This may attract more bidders to the sale and increase sale proceeds. For example, when office furniture is being sold, an individual may bid on one file cabinet for home use but not on a group of ten.

The PALS will select the method(s) of sale expected to bring the highest price. The nature of any property being offered for sale should be considered in light of its use with any other property being offered. The decision to offer property as separate items, groups of items, or in the aggregate is often made by the PALS at the sale based on bidder interest.

If the property is offered as both separate items/groups of items and in the aggregate, the property will be sold under the method that produces the highest aggregate amount.

If the property to be sold includes both real and personal property, the real property and the personal property should be grouped separately.

Do not separate items or groups of items encumbered by a single senior lienholder.

The PALS should consider the use of an outside auctioneer if it would increase the sale proceeds (e.g., works of art, jewelry, antiques).

Request the service of an auctioneer by written memorandum and obtain the approval of the PALS group and territory managers. The cost thereof will be charged as an expense of the sale. See IRM 5.10.2.7, Contracting for Services, for procurement authority.

To prevent potential conflict of interest situations, the auctioneer must agree that neither he/she, his/her family members, nor employees or owners of his/her auctioneer company, nor agents of such company will bid on or purchase items at IRS sales conducted by the auctioneer. The above-stated restrictions will be reflected in auctioneer contract solicitations and in written statements to be signed by auctioneers selected under such solicitations. Form 14730, Statement of Agreement with the Restrictions to The IRS Contract for Auctioneering Services, may be used for this purpose.

The PALS will send the signed statement to Advisory. If the PALS requires the services of an auctioneer not currently under contract with the IRS, a memorandum documenting the reason must be submitted to the Chief Procurement Officer.

The PALS should work with the contracting engineer, who will consult with counsel in approving the terms and conditions of the auctioneer's proposed contract.

Although the outside auctioneer will conduct the sale, the presence of the PALS is required in order to begin the auction by reading the legal statement described in IRM 5.10.5.11, Conducting a Public Auction, and, if necessary, to adjourn the sale.

The PALS will develop a written sale plan no later than fourteen (14) calendar days prior to the sale. Depending upon the complexity of the sale, the PALS may consider addressing the following in the sale plan: expenses (storage, moving, and advertising); marketing; tagging lots; signs; open house; bidder registration; security; documents for bidders; contracting an auctioneer; government bid-in decision; cashier responsibilities; runners; spotters; bid tabulation; sale certificates; making change; property removal; cash conversion; and deposit of sale proceeds.

Ordinarily, a Notice of Sale should be issued within 90 days (for personal property) or 180 days (for real property) from the date of the Notice of Seizure. Document any circumstances preventing the issuance of the Notice of Sale within 90 days (for personal property) or 180 days (for real property) in a memorandum to Advisory. Issue the notice as soon as possible thereafter.

IRC 6335(f) permits the owner of any property seized to request that the seized property be sold within sixty (60) days after such request, or within any longer period specified by the owner. The IRS will comply with such requests unless such compliance would not be in the best interest of the United States.

Taxpayers are required to submit IRC 6335(f) requests in writing to the manager of the PALS responsible for the sale. The manager will send a written response to the taxpayer within thirty (30) days after receipt.

The Notice of Sale must contain the following items:

If the seized property is to be sold at public auction, Form 2434, Public Auction Sale, will be prepared as indicated in Exhibit 5.10.4-1.

If the seized property is to be sold at public sale under sealed bids, Form 2434–A, Notice of Sealed Bid Sale, will be prepared as indicated in Exhibit 5.10.4-2.

If the owner has his/her usual place of abode or place of business within the territory where the seizure was made, the original Notice of Sale must be personally delivered to the owner of the property (or the possessor of the property for personal property) or left at his/her usual place of abode or place of business by affixing the notice, enclosed in an envelope, on the door if the owner is not available. If the owner is unavailable, ensure that the location is an actual place of business or abode; do not rely solely on the last known postal address to make this determination.

Because of the large geographic areas that a PALS may cover, any revenue officer who has not taken any collection actions at any time against the taxpayer whose assets have been seized may deliver the Notice of Sale. This will generally occur when the sole purpose of the PALS travel would be to deliver the Notice of Sale to the taxpayer's place of abode or business, and no other sale related actions are needed. The revenue officer will deliver the documents according to IRM procedures and advise the PALS of the delivery. An RO who has taken any collection actions at any time against the taxpayer whose assets have been seized may not be involved in the preparation of the Notice of Sale and may not discuss any aspects of the sale with the taxpayer while delivering the Notice of Sale. Any such revenue officer should advise the taxpayer to contact the PALS if there are any questions. All revenue officers (including an RO who has taken any collection actions at any time against the taxpayer whose assets have been seized) can discuss alternative methods of resolution with the taxpayer during this contact.

The notice will be sent by both certified mail, return receipt requested, and regular mail to the owner's last known address (place of abode or business) if both of the following situations exist:

If real property is being offered for sale, a reasonable effort should be made to deliver the notice personally in order to inform the taxpayer of the right to redeem the property at any time prior to sale or within 180 days of the sale. See IRM 5.10.4.13, Redemption of Property Prior to SaleandIRM 5.10.6.8, Redemption of Real Property After Sale.

If real property was seized and the taxpayer is not the owner of record (i.e., real property subject to a recorded NFTL was sold by the taxpayer), the original Notice of Sale should be furnished to the owner of record and a copy delivered to the taxpayer.

A copy of the Notice of Sale must be provided by regular mail to all interests of record (joint owners, senior and junior lien-holders, nominees, transferees, judgment creditors (regardless of whether they have perfected a lien interest), etc.) to the address reflected on Form 2434-B and also to a more current address if known. This includes any encumbrances identified in an updated records check completed after the seizure. Form 2434-B must be updated to reflect the date this action was taken.

Retain a copy of the Notice of Sale in the PALS case file. Send copies to the seizing revenue officer and Advisory within 10 workdays after the notice was issued.

In cases in which collection is in jeopardy and a levy is made without regard to the 10-day period provided in IRC 6331(a), a public notice of sale of the property seized should not be given within the 10-day period unless IRC 6336 (relating to perishable goods) is applicable.

The notice will be published in a newspaper published or generally circulated within the county in which the seizure was made. A single newspaper insertion appearing not less than 10 days but not more than 40 days prior to the date of sale meets the statutory publication requirement. In calculating this time period, the day of notice should be excluded and the day of the sale counted. (For example, if notice is published on March 1, sale can be held on or after March 11. The sale must be scheduled for no later than April 10.) Insertions of the advertisement for additional days may be desirable and, when feasible, should run for several days leading up to the date of sale.

In addition to the statutory publication, consider additional classified or spot advertisements to attract bidders. In all cases post the sale to the PALS web site.

Letter 5746, Instructions to the Publisher - Notice of Salemay be used to provide advertising instructions to the publisher. To meet the statutory notice content requirements, refer to Letter 5746, Instructions to the Publisher. The instructions to publisher, regardless of the format used, must be provided to Advisory within 5 days of requesting the advertisement as part of the interim sale documents. The advertisement will generally be set solid, without paragraphing, and without any display in the heading. Display advertising may be ordered, with the concurrence of the manager, when it is determined to be necessary. Retain a copy of all print and internet advertisements in the seizure file. For radio or television ads, retain a copy of the text provided to the advertiser.

In addition to the statutory publication, the notice of the sale may also be:

The statute provides that if there is no newspaper published or generally circulated in the county, the notice will be posted at the post office nearest the place where the seizure is made and in not less than two other public places, such as libraries, public notice boards at city and township halls and county public buildings.

Any expenses incurred during the mailing process may be charged to the taxpayer's account as an expense of sale (TC 360). Such expenses may include:

A supplemental insertion of the Notice of Sale may be placed in a newspaper to publicly advertise property omitted from the original Notice of Sale. However, the property included in the supplemental Notice of Sale is subject to the time limitations described in IRM 5.10.4.8.1, Notice of Sale - Date and Place of Sale. Therefore, the sale must be adjourned for all of the property to be sold at the same time, if the original date of sale is fewer than 10 days from the date of the supplemental notice. See IRM 5.10.5.6, Adjournment Procedures, concerning the procedures for adjourning a sale.

Though sales for multiple taxpayers may be held concurrently, the legally required advertisement must be separate for each taxpayer.

For jeopardy seizures, IRC 7429 provides that the taxpayer may request the IRS to review a jeopardy levy or assessment. The IRS must then determine whether under the circumstances:

Such requests will be coordinated with the Examination office that made the assessment. The sale of seized property will generally be suspended during this administrative review process.

IRC 6863(b) and the regulations thereunder provide that any property seized for the collection of a jeopardy assessment of income, estate, or gift tax may not be sold:

IRC 6863(b)(3)(B) and the regulations thereunder provides the following exceptions under which the property may be sold:

If it is determined that the expenses will reduce the net proceeds as indicated above, the revenue officer will make a written report stating the grounds for this determination and submit it through channels for approval by the area director (unless authority to make such determinations has been re-delegated). The original of the report will be retained in a permanent file maintained by Advisory.

A petition can be filed with the Tax Court for review of the IRS's decision to sell the property under the exceptions above. This review can be commenced upon motion by either the taxpayer or the IRS. Therefore, prior to initiating a sale under IRC 6863(b)(3), consult area counsel. Except in emergency situations where an immediate sale is necessary, the IRS should initiate the review process and file a motion with the Tax Court for pre-approval of a sale before the sale is scheduled.

The restrictions in IRC 6863 apply only to the sale of property and do not prohibit seizure of any type of property or rights to property of the taxpayer. However, before property is seized, a determination should be made as to whether the mere filing of a Notice of Federal Tax Lien (NFTL) would provide adequate protection during the suspended period. If the NFTL will not fully protect the Government's interest, the property may be seized and maintained under seizure until it can be lawfully sold or returned to the taxpayer.

The intent of IRC 6863 is to prevent irreparable damage to taxpayers by forced sale of their property before a determination is made as to their actual tax liabilities. The Code does not prohibit levies at any time during the suspended period on such assets as accounts receivable, bank accounts, salaries, fees, etc. The application of the proceeds of such levies to the taxpayers' accounts will not cause irreparable damage since the full value of the assets are normally reducible to their cash equivalent by the taxpayers without financial loss to them (see IRM 5.17.3.4.6, Jeopardy and Termination Cases).

Property seized pursuant to assessments made under IRC 6851 or IRC 6852 (Termination Assessments) are subject to the same stay of sale provisions stipulated in IRC 6863(b)(3) for property seized pursuant to a jeopardy assessment. The procedures described above regarding exceptions to the restrictions on sale for jeopardy seizures are also applicable to termination assessments.

Per IRC 6502(a), tax may be collected by levy as long as the levy was made prior to expiration of the collection statute. When property has been seized, the date the levy is considered made is the date the Form 668-B, Levy, is given. See IRM 5.10.3.9, Notice of Seizure (Form 2433 - Delivery).

When the collection statute will expire after the Form 668-B, Levy, is given but before the property can be sold, it may be necessary for the revenue officer to refile the NFTL (see IRM 5.12.8 , Notice of Lien Refiling) in order to protect the government's claim against the seized asset(s) and to allow the government to collect the tax therefrom after expiration of the collection statute. Both the revenue officer and PALS need to be aware of any imminent statute cases. Consult area counsel when this situation arises. If the collection statute is imminent and the assets were seized before the collection statute expired, the revenue officer should request input of transaction code (TC) 520, closing code 80 through Advisory with an effective date prior to the pre-seizure CSED to allow for application of the proceeds from the seizure. Once the proceeds are posted, the revenue officer should request input of TC 521.

In these cases, the IRS must use Form 668-F, Notice of Federal Tax Lien Refile, to refile the NFTL with specific language that limits the effect of the refiling to specifically described assets. A statement similar to the following should be entered on Form 668-F: "This refiling of Notice of Federal Tax Lien is limited to the following specific asset(s) and is not intended to affect any other assets of the taxpayer: Asset Description - ."

The NFTL should be filed within the last thirty days of the refile period (IRM 5.12.8.3, Refiling Period) in order to prevent any potential confusion over the effect of the original NFTL on all other assets of the taxpayer.

If periods other than those for which the refiling is necessary are contained on the original NFTL, the refiled notice should only contain the periods for which the refiling is necessary.

Form 668-F is not self-releasing. Advisory will prepare and file Form 668-Z, Certificate of Release of Federal Tax Lien (IRM 5.12.8.8, Release of Refiled NFTL), once the asset has been disposed of and any applicable redemption period has expired.

Any person whose property has been seized can redeem the property at any time before the PALS makes final acceptance of the highest bid at the sale.

In order to redeem property prior to sale, the taxpayer must pay both:

Payments to redeem property prior to sale must be by cash, certified or cashier's check or money order made payable to the United States Treasury.

The taxpayer may redeem the property from either the revenue officer or the PALS. Expenses incurred by both the revenue officer and PALS must be included in the amount required to redeem the property. See IRM 5.10.1.5.3.5, Equity Determination - Expenses of Sale (Disclosure Issues), for expenses that must be paid. The revenue officer and PALS must coordinate the release of the property in the most efficient manner possible. If custody of the property has already been transferred to the PALS and because of logistical issues the PALS is not able to release the property, part 5 of Form 2433 should be faxed to the revenue officer, who will initial and date the custody block of Form 2433 documenting acceptance of custody.

IRM 5.10.4.16, Actions to Release and Return Property, contains the instructions for documenting the release of levy, returning the property to the taxpayer, payment of expenses, and application of proceeds when property is released or redeemed prior to sale.

Release and return of seized property is authorized under a number of conditions.

If the revenue officer or PALS becomes aware of the need for release and return of the property, such release and return should be made as soon as possible. Questions should be referred to Advisory.

IRC 6343(a) provides for release of levy upon all, or part of, seized property or rights to property under any of the following circumstances:

Immediate release and return of property is required if it is learned that the seizure was prohibited by any of the following situations:

Release and return of property must also be made if so directed by:

IRC 6343(d)(2) authorizes the IRS, in its discretion, to return levied upon property where it determines that (A) the levy was premature or otherwise not in accordance with the IRS’s administrative procedures, (B) the taxpayer has entered into an installment agreement to satisfy the tax liability for which the levy was made, unless the agreement provides otherwise, (C) the return of such property will facilitate the collection of the tax liability, or (D) with the consent of the taxpayer or the National Taxpayer Advocate, the return of such property would be in the best interests of the taxpayer and the United States. Under the Treasury Regulations, if the IRS makes a seizure in violation of the law, it is in the best interests of the United States and the taxpayer to return the property to the taxpayer. Treas. Reg. 301.6343-3(d).

The provisions for seizure release under IRC 6343(d) apply to returning property to the taxpayer, except there is no allowance for payment of interest.

Release and return of property should also be made if new information is discovered about the status of real property being used as a residence that would render the seizure improper, or if the seizure is determined to be wrongful or improper, or if other justification is discovered.

The property may also be released if:

As described in IRM 5.10.3.10, Management Review Process and Taxpayer Appeal Rights, when the taxpayer requests the return of seized property in writing and the property is tangible personal property essential in carrying on a trade or business, the request must be expedited. The territory manager is responsible for reviewing such requests and determining if conditions requiring release under IRC 6343 are present, and, in particular, whether the levy has created an economic hardship by preventing the taxpayer from carrying on the trade or business. As provided by CFR 301.6343-1, the taxpayer must submit this request at least six days prior to sale, and include:

The results of the review must be provided to the taxpayer by the earlier of ten business days after receipt of the completed request or prior to sale. If necessary, the sale should be delayed (if the public notice of sale has not been published) or adjourned to provide the taxpayer with the required response. See IRM 5.10.5.6, Adjournment Procedures.

Any person or other entity claiming an interest in or a lien on seized property, other than the person against whom the tax is assessed on which the levy arose, may submit a claim for return of wrongfully seized property (see IRM 5.17.3.6.6.3, Wrongful Levy). A seizure is considered wrongful if any of the following circumstances exist:

IRC 6343(b) provides for return of property not belonging to the taxpayer that has been wrongfully seized. When a person alleges that there has been a wrongful seizure, and the property has not yet been sold, it may be returned to the rightful owner at any time prior to sale to a third party. If property was declared purchased for the United States and has not been resold, it may be returned to its rightful owner.

If there is a question over ownership, advise the third party to submit a written request, signed under the penalties of perjury, addressed to the area director and directed to the attention of the Advisory territory manager for the area office in which the seizure was made.

The written request must contain all of the following items:

The revenue officer or PALS must:

The third party may also choose to file a suit under IRC 7426(a) without first filing a claim. However, if they are also seeking damages under IRC 7426(h), they must have exhausted all administrative remedies prior to filing suit.

If the property to be returned involves cash (or cash equivalent) of $10,000 or more, the matter will be referred to Examination and Criminal Investigation.

If it is determined that the property should be released to the third party making the wrongful levy claim, follow the procedures in IRM 5.10.4.16, Actions to Release and Return Property. If Form 668–E, Release of Levy, is used to release the property, modify the second printed line on the form by deleting "belonging to the above named taxpayer."

If the claim is disallowed, Advisory should notify the claimant in writing as soon as possible of the reason for disallowing the claim and of the right to bring suit against the government. (See IRM 5.17.3.6.6.3, Wrongful Levy). If the claim is disallowed because it was not made within nine months from the date of the levy, send the claimant Letter 3973, Wrongful Levy Claim Rejection - Untimely Claim, via certified mail. If the claim is disallowed because it does not meet one of the requirements detailed in IRM 5.10.4.15, Release of Wrongful Seizures for Property Not Yet Sold, send the claimant Letter 3974, Wrongful Levy Claim Rejection Letter, signed by the appropriate delegated official, via certified mail. Disallowance of the claim may be appealed through the Collection Appeals Program (CAP).

IRM 5.10.6.15, Wrongful Seizure - Payment of Claims After Sale, contains the procedures for when a wrongful levy claim is received after the property has been sold.

Two forms may be used to release seized property:

Release and return of seized property may only be made to:

The property description of the released property should be taken from Form 2433, while all of the other information required to complete the release should be taken from Form 668-B. If Form 2433 was not prepared prior to the release, describe the property in sufficient detail to identify it.

Form 668-E or Part 4 of Form 2433 should be given and seized property should be released at the place where the property was stored. At the time of release, two IRS employees should be present to witness the return of the property. A witness is not required when unimproved real estate is being released.

When necessary, the revenue officer or PALS may release the property accompanied by a local, state or federal law enforcement officer who should sign Form 2433, Parts 3 and 4 or Form 668-E. The revenue officer or PALS must document the case history describing the circumstances leading to the use of the non-IRS witness and include a complete identification of the witnessing law enforcement officer (i.e., name, organization, address, badge number).

The revenue officer or PALS should remove all seizure warning notices from the property at the time the release of levy is given.

When a decision is reached to release and return seized property that has been stored pending sale, notify the storage facility operator or landlord immediately. Document the notification in writing and indicate that the IRS has no further obligation for storage or rental fees subsequent to the date of release, other than fees for which the IRS is already obligated.

As a general rule when property is released or redeemed prior to sale, arrange for direct payment of any seizure expenses by the taxpayer. This will minimize expense processing. If the taxpayer is to pay any storage or rental fees due for the time prior to release, the revenue officer or PALS should document the terms in writing. The revenue officer or PALS should secure a copy of the receipt for payment to forward to the field budget officer to avoid double payment to the vendor and confirm that the expense was paid.

If expenses are incurred and not paid directly to the vendor, the cost must be debited to the taxpayer's account via input of TC 360. If no proceeds were received for the release, the expenses will be collected through normal means. If payments were received for the release or redemption, the expenses will be debited with a TC 360 and paid simultaneously with the application of the payments by posting the corresponding credit with TC 694. The RO or PALS will prepare Form 2436R (See IRM 5.10.4.17,Seized Property Release/Redemption Report) to request input of TC 360 and/or a TC 694.

All payments received for the release or redemption of seized property must be submitted with Form 2433, Part 7B- Remittance Processor to the Ogden Submission Processing Center and not on Form 795. Do not post release/redemption payments to the balance due accounts on ICS. The module balances will be automatically updated after the Form 2436R is processed. Submit the documents on Form 3210 (with the seizure number included) to the following address:

Provide Part 4 of Form 2433 or Part 2 of Form 668-E to the taxpayer or the person from whom the property was seized. If the taxpayer or the person from whom the property was seized cannot be located, mail the appropriate part to the last known address by certified mail, return receipt requested. Forward Part 3 of Form 2433 or Part 1 of Form 668-E to Advisory for inclusion in the seizure case file.

Generally, seized property should not be released and returned until the recipient signs the "Receipt for Property Returned" on the reverse of Form 668-E or parts 3 and 4 of Form 2433. If the taxpayer or the person from whom the property was seized cannot be located or refuses to sign the release, the property may nevertheless be released. The revenue officer or PALS should note the reason for failure to secure the acknowledged receipt in the "Signature of Recipient" space.

If the taxpayer or person from whom the property was seized cannot be located to take possession of the released or redeemed property, contact area counsel and the field budget officer through Advisory for advice on the disposition of the property.

The revenue officer or PALS will indicate disposition of the property by checking the appropriate blocks on Form 2433 and entering the dollar amount received (if any) on Parts 5 and 7B. Advisory will enter the corresponding information on the related Part 6 in its files. When property is released or redeemed, after properly posting the expenses and credits using Form 2436R, the only required actions are:

When individual items are released back to the taxpayer after the original Form 4585 has been delivered to the taxpayer, revise the minimum bid to reflect the loss of the value of the assets released. The taxpayer will not be allowed additional appeal rights if the fair market value of the remaining assets is not being changed (IRM 5.10.4.3.8, Revised Minimum Bid Form - No Opportunity to Protest). Document the case history with the fair market value of the assets released and the total fair market value of the remaining assets. Use the new fair market value in the preparation of the revised Form 4585. The same percentage reductions used in determining the original minimum bid should ordinarily be used in determining the new minimum bid. Enter an explanation in item 8 of Form 4585, and mark out the information that explains the appeal rights on the reverse of the form. The revised form can be hand delivered to the taxpayer or sent by regular mail. Personal delivery to the taxpayer at the time the release documents are provided is optimal so that the reasons for the revised minimum bid can be explained.

When another government agency becomes involved after a seizure, prepare a release of levy before any property is released or turned over to that agency. Consult area counsel, through Advisory, before any action is taken to turn over the property.

The employee releasing the property must update the ICS seizure and sale application when the property is released or redeemed.

The employee releasing the seizure will prepare Form 2436R, Seized Property Release/Redemption Report, when either of the following conditions exist :

Complete the Form 2436R and send it to Advisory within 10 calendar days of the receipt of payment from the taxpayer.

The form should be completed after all receipts and vouchers for expenses have been reviewed. Ensure all expenses are debited against the balance due accounts through a TC 360.

Document expense information as follows:

Verify the balance due on IDRS to ensure the proper posting of release/redemption payments prior to completing item 5, "Application of Payments" .

Enter the seizure number in the upper right portion of Form 2436R.

After signing the Form 2436R, retain Part 4 with the ICS paper file, and send parts 1,2, and 3 to Advisory. In addition to Form 2436R, send copies of all receipts, vouchers, and other related documentation for expenses of the seizure.

All payments received for the release or redemption of seized property must be submitted with Form 2433, Part 7B- to the Remittance Processor at the Ogden Submission Processing Center and should not be submitted on Form 795. The module balances will be automatically updated after the Form 2436R is processed. Post-seizure payments that are not anticipated to result in release or redemption may be processed normally.

Advisory will review Form 2436R upon receipt, and enter the appropriate information onto Form 6670, Seizure Disposition Report. If no corrections are needed, Parts 2 and 3 will be transmitted immediately to Accounting Control/Services for application of the payments. Part 1 will be maintained in the seizure file. Advisory will be responsible for following up on the application of the payments from the Form 2436R and should contact the Revenue Accounting Control System (RACS) unit to resolve any misapplied funds. It is extremely important that all expenses be debited with a TC 360 and the applicable TC 694 credit be posted to the account so that all payments from the seizure are applied according to IRC 6342(a).

In all cases that result in the full payment of the taxpayer's liability and/or an underlying federal tax lien, including any expenses which may have been incurred as a result of the seizure, the RO assigned to the case will issue a manual release of NFTL via Form 13794, Request for Release or Partial Release of Federal Tax Lien, according to the procedures which are currently in place for issuance of such releases. Per IRM 5.12.3.4, Certificate of Release, such requests may be faxed or sent by secure email to Centralized Lien Organization (CLO). Highlight “immediate release” at the top of the request. This action should be initiated as soon as it is determined that the liability and/or underlying federal tax lien and all expenses of the seizure are satisfied. As a general rule, when property is released or redeemed prior to sale, arrangements should be made for direct payment of any seizure expenses by the taxpayer. If expenses are incurred and not paid directly to the vendor, the cost must be debited to the taxpayer’s account via input of Transaction Code (TC) 360. Payments made to redeem property prior to sale must be by cash, certified or cashier’s check or money order made payable to the United States Treasury.

See IRM 5.10.1.7, Perishable Goods Criteria, Definitions, and Examples, and IRM 5.10.1.8, Perishable Goods Pre-Seizure Development, for criteria and pre-seizure development procedures for perishable goods. When perishable goods are seized, the revenue officer must document why IRC 6336 is applicable in the case history. A copy of the report submitted with the approval request will become a part of the file forwarded with the closing documents.

In order to preserve equity and maximize sale proceeds in these expedited sales, it is important for PALS to consider marketing before the seizure has been conducted. It is equally important that no identifying information be disclosed during this marketing, for example:

Pre-sale marketing efforts should provide only a general description of the property and approximate location of the sale.

If the taxpayer can be readily located, a written notice of the appraised value of the property will be issued to him/her. The asset valuation notice (See Exhibit 5.10.4-3, Perishable Goods Asset Valuation Notice) must state that if the appraised value of the property is not paid within the time specified in the notice (or an acceptable bond for such amount is not furnished within that time), the property will be sold. The PALS group manager must approve the asset valuation notice. A diligent effort will be made to personally deliver the notice of the appraised value to the taxpayer. However, the fact that the taxpayer cannot be located does not prohibit sale of the property under IRC 6336. At the time of delivery, explain the terms of the perishable goods sale to the taxpayer, and allow an opportunity to redeem the property at the appraised value. If circumstances require immediate action, the taxpayer may be verbally notified of the appraised value. This will be confirmed in writing prior to the sale.

Before selling property under IRC 6336 that was seized based on a jeopardy assessment or termination assessment, secure the concurrence of area counsel.

Circumstances may arise where a non-perishable asset seizure must be reclassified as a perishable goods seizure. In this case, the revenue officer or PALS must prepare a memorandum describing why such reclassification is necessary. The memorandum must request that the Director of Field Collection approve both the:

Prior to conducting a sale, make arrangements to deposit any cash or certified funds that may be received at the sale. Deposit proceeds into a Treasury General Account (TGA) using OTCnet. The manner in which sale proceeds are handled must always be fully documented in the case file history. See IRM 5.10.5.21, Securing and Depositing Sale Proceeds, for actions to take after the sale.

In the event the PALS has certified funds and is unable to make a deposit using OTCnet, refer to IRM 5.10.6.3, Submitting Bank Deposit Information or Certified Funds from Sale of Seized Property, for submitting to Ogden Submission Processing using overnight traceable mail.

Any unusual arrangements, such as using an armed escort from Criminal Investigation to transport significant amounts of cash, should be discussed with the PALS manager prior to the sale.