Seized or Forfeited Property by the IRS? New Policy to Get Your Property Back

The IRS has established a special procedure for people whose assets were forfeited in relation with structuring to request a return of their forfeited property or funds. The new process follows a change of IRS policy on structuring cases in October 2014 and ongoing discussions with members of Congress.

The IRS began mailing Letter 5862 (6-2016) in June of 2016 to potentially eligible property owners to participate in this initiative.  Since 2014, the IRS has already considered a number of petitions from property owners.  The new mailing is being taken to ensure that eligible property owners in this category are aware of this option.

However, taxpayers must tread lightly; an attempt to have property remitted by a Taxpayer can lead to more trouble and can give the IRS more information which they can use to pursue a criminal investigation. The IRS may learn more about illegalities through the special procedure and so it is important to make sure a petition is in a taxpayer’s best interest.

If the IRS believes that property or funds were seized in violation of structuring laws from legal sources, the IRS will send Letter 5832 to the specific taxpayer via certified mail with return receipt requested. Letter 5832 reads as follows:

• Our records show that you may have had an ownership interest in property that was previously seized and forfeited by the IRS.
• The IRS has revised its policy on the seizure and forfeiture of property associated with violations of the structuring laws. Under this policy, IRS Criminal Investigation (IRC-CI) will no longer pursue the seizure and forfeiture of property associated solely with “legal source” structuring. Because of this change, you may request a return of property through the remission or mitigation of forfeiture process, provided you meet certain conditions and there is no evidence that you engaged in structuring to conceal other criminal activity, such as tax evasion, money laundering, or other crimes.
• If you never filed a petition for remission or mitigation, you can now file a petition. If you previously filed a petition for remission or mitigation, you can renew the petition now. For this administrative review you must:
  • Identify, to the best of your ability, the property seized, the date of seizure, and proof of ownership interest in the property.
  • Describe the facts and circumstances that you believe justify the return of property, to include establishing the source of funds structured.
  • Include copies of documentary evidence, if applicable.
  • Include a signed declaration under penalty of perjury that meets the requirement of 28 United States Code Section 1746.
  • A petition must be filed within 60 days from the receipt of Letter 5832 (6-2016).

According to testimony by Robert Everett Johnson during a hearing before the U.S. House of Representatives Committee on Ways and Means Subcommittee on Oversight, while past structuring forfeitures that would violate current policies likely total around $43 million for the period between 2007 and 2013, the Treasury Forfeiture Fund today contains a far larger amount. At the close of Fiscal Year 2015, the fund had a net position of $6.1 billion.

At Abajian law we can help you get seized property back. Vic is a former IRS Trial Attorney. The Los Angeles attorneys at Abajian Law all have an LL.M. in tax law. If you have questions and concerns about forfeited or seized property, call Abajian Law to see if our firm is right for you.