9-114.000
THIRD PARTY
INTERESTS
9-114.100 State and Local Real
Property Taxes in Civil and Criminal Forfeiture Cases
9-114.110 Payment of Interest
and
Penalties on State and Local Real Property Taxes
9-114.200 Waiver of Costs to
Owner
Victims in Remission Cases
In civil and criminal forfeiture cases, the United States
will pay
standard ad valorem property taxes up to the date of entry of an
order of
forfeiture. Payment of taxes upon forfeited properties is
permitted when:
- The properties have not yet been sold, or
- The properties are the subject of pending litigation regarding
payment of
taxes, provided however, that:
- a tax claim was filed with the federal district court
prior to entry
of the order of forfeiture; or
- a valid lien had been recorded among the pertinent land
records
giving the federal district court notice of the tax claim prior to
entry of the
order of forfeiture. See the Criminal Resource
Manual at 2246.
The following policy is meant to ensure consistent
national treatment
of the payment of interest and penalties on state and local taxes
on forfeited
real property:
- The United States will pay interest but not
penalties on overdue
taxes;
- The formula for the rate of interest is set forth in 28 U.S.C.
§ 1961(a);
- Higher rates of interest may be paid where the taxing authority
has incurred
out-of-pocket interest expenses in excess of the rate specified by
§ 28
U.S.C. 1961(a), e.g., where tax certificates have been sold to
private investors;
- United States Attorneys, with the concurrence of Asset
Forfeiture and Money
Laundering Section, Criminal Division, may agree to a higher rate
of interest
provided that such higher rate is not punitive; and
- Interest thereon may only be paid up to the amount realized
from taxes and
the sale of the property.
It is the policy of the Department of Justice to waive the
payment of
certain costs and expenses incident to the seizure and forfeiture
of property
that is being restored through remission to an owner victim of the
underlying
offense when the owner victim is a natural person. This policy
does not apply
to non-owner victims. The costs and expenses subject to waiver are
property
management and case-related expenses incurred in connection with
the forfeiture
and include storage, maintenance, and security costs, as well as
those costs
incurred in connection with the requirement that the government
provide notice
of the action to potential claimants. It is preferable to restore
forfeited
property to owner victims, thus avoiding disposition costs. In the
event
property must be sold to restore property to one or more victim
owners, the costs
of sale will not be waived. Nor should costs be waived where the
petitioner
seeking remission as an owner victim is an agency of a state or the
federal
government. See the Criminal
Resource Manual at
2247.
| October 1997
| USAM Chapter 9-114
|