What is a Civil Asset Forfeiture: How Government Seizes Property

The Civil Asset Forfeiture and Asset Seizure Rules Explained

The Civil Asset Forfeiture and Asset Seizure Rules 

Oftentimes, United States Government will go to great lengths in order to ensure that IRS domestic and international tax compliance rules are followed and maintained –– especially in the world of international tax and offshore compliance. Two of the most common types of enforcement actions against US Taxpayers who may owe money are a Property Lien or a Bank Levy. Before either a Levy can be issued against the taxpayer, they will usually receive several rounds of nasty notices and letters from the US government telling them what’s going to happen if the taxpayer does not resolve their issue either by making payment or entering into an agreement. A more intense action the US government can take when there are issues of something is referred to as a Civil Asset Forfeiture and Seizure. Let’s review the basics of the civil asset forfeiture and seizure rules as provided in the asset forfeiture Policy Manual:

• • • Why the DOJ pursue asset seizures;

    • Scope of assets covered; and

    • What you can do if assets were seized

Civil Asset Forfeiture and Asset Seizure

Civil asset forfeitures and seizures are not fair and can put US persons at a severe disadvantage financially (which is the Government’s goal). While the Government may couch their actions in other rhetoric, at the end of the day, they want your asset — and for you to lose the ability to utilize it. While sometimes it may be warranted, oftentimes it is not — and amounts to overkill. Here are some of the key (introductory) provisions of the Policy Manual:

Guidelines for Planning for Seizure and Restraint

The Department of Justice (Department) Asset Forfeiture Program (Program) encompasses the seizure and forfeiture of assets that represent the proceeds of, or were used to facilitate, federal crimes. The Program has four primary goals:

• • • Punish and deter criminal activity by depriving criminals of property used in or acquired through illegal activities.

    • Promote and enhance cooperation among federal, state, local, tribal, and foreign law enforcement agencies.

    • Recover assets that may be used to compensate victims when authorized under federal law.

    • Ensure that the Program is administered professionally, lawfully, and in a manner consistent with sound public policy

Scope of Assets Covered by Guidelines

These guidelines cover all assets considered for federal forfeiture.

• • • The degree and nature of planning for seizure or restraint will vary depending upon the circumstances and complexity of each case. In order for the USMS to best assist USAOs and seizing agencies in a thorough, efficient, and effective manner, the USAO or seizing agency must involve the USMS in the investigation as soon as it identifies assets that likely will be seized for forfeiture.

    • Formal seizure planning should occur well before the filing of a civil forfeiture complaint or the return of an indictment containing forfeiture allegations. Specifically, formal seizure planning requires a detailed discussion of all potential issues affecting the seizure, custody, and disposal arrangements specific to each asset identified for forfeiture. This discussion may occur in person, by telephone, or electronically, and may be ongoing depending on the nature of the asset and stage of the forfeiture proceeding. These seizure planning discussions are mandatory for assets in any of the categories listed below:

    • residential or commercial real property and vacant land;

    • businesses and other complex assets;

    • large quantities of assets involving potential inventory and storage or security problems (e.g. multiple vehicles from several locales or districts, drug paraphernalia to be seized from multiple locations on the same day, or the inventory of operating businesses such as jewelry stores);

    • assets that create difficult or unusual problems (e.g. animals, perishable items, chemicals and pharmaceuticals, leasehold agreements, intellectual property, cryptocurrency and valuable art and antiques); and assets located in foreign countries.

Petitions for Remission and Mitigation

• • • Once assets have been forfeited, the authority to distribute them to owners, lienholders, or victims rests solely with the Attorney General. See 18 U.S.C. § 981(d) (civil forfeitures); 21 U.S.C. § 853(i)(1) (pertaining to controlled substances violations) incorporated by reference in 18 U.S.C. § 982(b)(1) (criminal forfeiture); 21 U.S.C. § 881 (controlled substances violations); see also 28 C.F.R. Part 9. Congress granted complete discretion to the Attorney General to remit or mitigate forfeitures as an “act of grace,” and no judicial review of remission decisions is available.

    • See United States v. 1957 Buick Roadmaster, 167 F. Supp. 597, 601 (E.D. Mich. 1958). The federal regulations at 28 C.F.R. Part 9 govern the remission of administrative, civil or criminal forfeiture.

    • The Attorney General delegated the authority to decide petitions for remission in judicial cases to the Chief of the Money Laundering and Asset Recovery Section (MLARS). See 28 C.F.R. § 9.1(b)(2).

    • In administrative forfeitures, the authority to decide petitions for remission or mitigation rests with the seizing agency. See 19 C.F.R. §§ 171.11–171.14 and 172.2; 26 C.F.R. Part 403.35–403.45; 28 C.F.R. § 9.1(b)(1).

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Golding & Golding specializes exclusively in international tax, and specifically IRS offshore disclosure. 

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