9-114.100
State and Local Real Property
Taxes in Civil and Criminal Forfeiture 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.
9-114.110
Payment of Interest and Penalties
on State and Local Real Property Taxes
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.
9-114.200
Waiver of Costs to Owner
Victims in Remission Cases
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. See also
the Criminal Resource Manual at 2290
("Guidelines and Procedures for Restoration of Forfeited Property
to Crime Victims via Restitution in lieu of Remission").
[updated December 2002]
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