Real property may be leased if it is determined that it will be in the possession of the area director over an extended period of time and that the government's interest will best be served by such action. Factors to be considered are:

The initial determination will be made by the Technical Services (Advisory) Group Manager, based upon the circumstances, including any recommendation of the area office involved. The final decision rests with the Technical Services (Advisory) Territory Manager whose approval must be secured before the property is offered since he/she must sign the lease.

If acquired property will be leased and a prospective lessee has been secured, the Technical Services (Advisory) Group Manager should request area counsel to prepare a lease agreement in duplicate. The terms of the lease should generally not be more than a year and should not contain any provision which would prevent selling the property, subject to the lease, at any time a suitable purchaser is found. The lease agreement should specify that payments be made by check or money order made payable to the United States Treasury and sent directly to the Technical Services (Advisory) Group Manager.

The following information should be furnished to area counsel:

Upon receipt of the proposed lease agreement from area counsel, the Technical Services (Advisory) Group Manager will review the lease to see that it conforms to the intent of the parties involved and will forward the original and duplicate to the Technical Services (Advisory) Territory Manager for his or her signature.

After the Technical Services (Advisory) Territory Manager has signed the lease agreement, both copies will be returned to the Technical Services (Advisory) Group Manager who will:

Upon receipt of payments under the lease agreement, Technical Services (Advisory) will note the control card as to date payment is received and prepare and process a memorandum posting document in duplicate in accordance with IRM 5.10.7.2(4), Income From Acquired Property.

If a payment is not received within a reasonable time after the due date, the Technical Services (Advisory) Group Manager should contact the lessee to secure payment. If payment is not received, area counsel should be consulted as to the legal action required.

Regulations provide that offers to bid at least a specified amount may be solicited from prospective bidders before giving a notice of sale of acquired property. Although this procedure is not a statutory requirement, it is desirable since it encourages more sincere bidding and practically ensures that the property will be sold when offered for sale. Ordinarily offers to bid will be the result of solicitation by the PALS or the revenue officer since they will be in the best position to contact prospective bidders. However, in some instances the agreement to bid may be secured by other Service personnel. The agreement to bid should be similar to the example in Exhibit 5.10.7–1.

A deposit to secure performance of the agreement to bid may also be required and ordinarily is desirable. When a deposit is required, it should be the full amount of the offer to bid if the bid is $200 or less. If the amount of the offer to bid is more than $200, the deposit should be 20 percent of the bid or $200, whichever is greater.

If a deposit is required with the agreement to bid, it should be made by a certified, cashier's, or treasurer's check drawn on any bank or trust company incorporated under the laws of the United States or under the laws of any state, territory, or possession of the United States, or by a postal, bank, express, or telegraph money order.

Certificates of Deposit and irrevocable letters of credit are also acceptable if approved in advance by area counsel. However, care should be exercised in accepting and monitoring such instruments because the period of time in which they are negotiable is generally limited.

Upon receipt of a bid deposit, prepare Form 2276, Collateral Deposit Record (IRM Exhibit 5.10.7–2). The remittance and Form 2276 will be submitted to Technical Services (Advisory) for review and safekeeping. Additional information on collaterals can be found in IRM 5.6.1, Collaterals and Security Type Collaterals, and IRM 5.6.2, Collaterals - Maintenance. When completing the form:

Personal property may be sold any time after it is acquired and a notice of sale given (IRM 5.10.7.3.5(2), Notice of Sale). However, sufficient time should be allowed to permit adequate publicity of the sale so that the maximum amount may be obtained for the property at the sale. Ordinarily, the sale of personal property should be held in the area where the property was declared purchased for the United States. If the sale is to be held in another area, the area director should advise the director of the other area.

Real property acquired under the provisions of IRC 6335(e) may be sold after the period of redemption expires and a public notice of sale has been given (IRM 5.10.7.3.5(2), Notice of Sale). The notice must have been given not less than 20 days before holding the sale. Ordinarily, when real property is involved, the taxpayer or other persons with an interest in the property, or a person on their behalf, have a right to redeem the property within the prescribed period. In some instances, such as in the case of real property acquired by forfeiture, the right to redeem may not exist. When real property is acquired by an action other than a sale under provisions of IRC 6335(e), consult area counsel to determine whether redemption rights exist.

When real property is redeemed under 28 USC 2410 or IRC 7425, the PALS should arrange to sell it as soon as possible after proper notice of sale is given and the terms of agreements to bid permit. The property may not be sold less than 20 days after notice is given.

Ordinarily, the place of sale of real property should be within the county where the property is situated. However, if it is believed that a substantially higher price may be obtained, the area director or Technical Services (Advisory) Territory Manager may authorize the sale to be held outside such county. If this move causes the sale to be held in another area office, the area director should be notified by the approving official in the area where the property is situated.

Regulations provide that the employee conducting the sale may adjourn the sale if an adjournment will best serve the interest of the United States. However, if the sale is adjourned for more than 30 days in the aggregate, a new notice of sale is required.

When a sale is to be adjourned for any purpose, the employee conducting the sale should appear at the time and place originally established for the sale and make a public announcement of the adjournment and, if possible, inform those present of the new date and time of sale.

Acquired property may be sold either by public auction or by sealed bids. The method used will depend upon the facts and circumstances surrounding the property, such as type of property, location, condition of property, etc. The method selected should be the one which is expected to produce the maximum amount for the property.

Acquired property may be sold, if divisible, in parcels or piecemeal, or it may be combined with other acquired property and offered for sale. There are no restrictions relative to the grouping of the property for sale. It may be offered as separate items, as groups of items, in the aggregate, or both as separate items (or in groups) and in the aggregate. If the property is to be offered in groups, the groups should be segregated on the notice of sale.

Regulations require that a notice of sale be publicly given. The notice of sale should be prepared as appropriate:

If residential real property is being sold, the notice of sale should also contain a statement that the property is being sold on an open occupancy basis or nondiscriminatory basis. The notice of sale should be reproduced in a manner that will provide sufficient copies to satisfy the needs of the particular sale. For real property, the notice of sale must be published in a newspaper published or generally circulated within the county where the property is situated. If there is no newspaper published or circulated within the county, the notice will be posted at the post office nearest the place of sale and in at least two other public places. For personal property, newspaper advertising may also be authorized but is not required. A copy of the notice of sale should also be retained by the PALS for submitting with the report of sale. A copy will be forwarded to Technical Services (Advisory).

Other methods of giving public notice of sale and of advertising, such as radio or television spot announcements, posting on the Treasury Web Site (Internet), and trade journal advertising, may be used, in addition to those required by regulations, when it is believed that wider or more specialized advertising coverage will enhance the possibility of obtaining a higher price for the property. If commercial advertising is used, the procedures prescribed in IRM 5.10.4.12.1, Commercial Advertising of Sale, should be followed.

The procedures prescribed in IRM 5.10.5.5, Condition of Title and of Property, are also applicable when acquired property is being sold.

Because Form 2434–B , Notice of Encumbrances Against and Interests in Property Offered for Sale, is normally used for sales of seized assets, the following changes should be made when conducting a sale of acquired property:

At the time and place set for the sale, the employee conducting the sale should call the prospective bidders to order and read the authority for the sale and the conditions under which the property will be offered. The statement provided in Exhibit 5.10.7–7 should be used, but it may be altered as necessary to fit the conditions of a particular sale.

After reading the statement as to the terms and conditions of the sale, the employee conducting the sale will open the bidding. If an agreement to bid has been secured and a deposit has been required, if a higher opening bid is not received, the property should be offered for sale at the amount of the offer. If a bid is not received equal to at least the amount of the offer, the sale should be adjourned and the property again offered for sale at a later date. At the conclusion of the bidding, the property will be declared sold to the highest acceptable bidder, unless it is determined that the best interest of the Government will be served by an adjournment of the sale (IRM 5.10.7.3.3, Adjournment of Sale).

If the property is offered for sale by more than one method, the employee assisting in the sale will prepare a tabulation of the high bids received. Form 4425, Public Sale Bid Tabulation, or similar form, may be used for this purpose. It is not necessary that a record be maintained of bids as they are tendered during the progression of the tentative high bids. The sale should be recessed at the conclusion of the bidding for a period long enough to tabulate the tentative high bids received. After completing a verification of this tabulation, the name of the successful bidder or bidders should be announced. The records pertaining to the tentative high bids received will be retained and submitted by the employee conducting the sale with the report of the proceedings as stated in IRM 5.10.7.8, Report of Disposition — Other Than Sale of Redeemed Property.

When property is offered for sale by more than one method, it may be desirable to secure payment from the tentative high bidder(s) pending the outcome of the bidding by the other method of sale. In these cases, the procedures in IRM 5.10.5.10, Property Offered for Sale by More Than One Method, should be followed.

Regulations under IRC 7505 and 7506 provide that acquired property may also be sold by sealed bids. If the property was not redeemed by the United States, the procedures prescribed in IRM 5.10.5.11, Sealed Bid Sale - General, will be followed except that:

For property that was redeemed by the United States, the procedures prescribed in IRM 5.10.5.11, Sealed Bid Sale - General, will be followed except that:

Instructions in IRM 5.10.4.10.3, Notice of Sale - Terms of Payment, are applicable.

A Form 809 receipt will not be issued to the purchaser upon full payment of the purchase price if personal property is sold. Instead, a Certificate of Sale will be issued. See IRM 5.10.7.5.7, Certificate of Sale — Personal Property.

If deferment of the full purchase price is permitted or if real property is sold and the payments are made by cash, the employee will issue a Form 809 receipt for the cash payments. Parts 1, 2, and 3 of the Form 809 receipt should be marked in the upper right corner above the receipt number "Full (or partial, if applicable) Payment—Sale of Acquired Property. " The only entries that should be made are the taxpayer's name and the amount of the payment. Part 2 should be given to the purchaser and Parts 1 and 3, stapled together in reverse order, should be submitted via Form 3210, Document Transmittal, as provided in IRM 5.10.7.8, Report of Disposition — Other Than Sale of Redeemed Property.

If a deposit is required with the agreement to bid and the depositor fails to bid the amount specified in the agreement and the property is not sold for as much as the agreed amount, the amount of the deposit may be retained by the Service as damages.

If payment in full is required upon acceptance of the bid and is not paid, or if deferred payment is permitted and is not paid within the prescribed period, the sale may be declared to be null and void and the property may again be advertised and sold as provided in these instructions. In this event, the new purchaser will receive the property or rights to property free and clear of any claim or right of the former defaulting purchaser. The amount paid upon the bid price may be retained by the United States pending determination of actual damages. Area counsel may be consulted, if necessary, to determine whether legal action is appropriate.

In case of retained damages under either 5.10.7.5.5(1) or (2) above not related to property redeemed under IRC 7425, the employee who conducted the sale will prepare a memorandum in triplicate entitled " Retained Deposit Funds" and state thereon the:

The employee conducting the sale will forward all copies of the memorandum through their manager to the Technical Services (Advisory) Group Manager to submit to Accounting Control/Services.

In case of retained damages under 5.10.7.5.5(1) or (2) above related to property redeemed under IRC 7425, the employee will report any default situation described above by memorandum, in quadruplicate, entitled "Default in Agreement to Bid" or "Default in Payment of Bid Price," as applicable. The memorandum will identify the redemption sale and will include the following information:

All copies of the memorandum will then be forwarded through the group manager and the Technical Services (Advisory) Territory Manager for distribution to the Technical Services (Advisory) Area Manager, Management & Finance Field Office, and area counsel. The fourth copy will be retained in Technical Services (Advisory).

In order to minimize the chance of loss being incurred by the Service, the Technical Services (Advisory) Territory Manager will, by memorandum, inform the Management and Support Field Office when any of the following situations occur:

At the conclusion of the sale, remittances submitted in connection with unsuccessful sealed bids will be returned to the bidder unless the bidder defaulted in payment of the bid price.

In no event will any remittance received with an unsuccessful bid be deposited as internal revenue collections or in the deposit fund account, nor will unsuccessful bidders be required to submit an application for a refund. Remittances will be returned to unsuccessful bidders if they are present at the sale. Otherwise, the remittances will be returned by certified mail. In either case, complete the applicable items of the "Return of Remittance to Unsuccessful Bidder" section of the related Form 2593 or Form 2593–A.

Technical Services (Advisory) is responsible for returning deposits submitted with agreements to bid if, after the sale, the individual who submitted the deposit was not the successful bidder.

As soon as possible after receipt of the full purchase price, the employee conducting the sale will:

Regulations under IRC 7506 provide that, upon payment in full of the purchase price, the delegated official will issue a deed to the purchaser. Authority to sign deeds is contained in SB/SE Delegation Order 5.1.

The deed will be prepared in duplicate by Technical Services (Advisory) and forwarded to area counsel for approval. A standard format for such deeds can be pre-arranged with area counsel. Once the deed is ready, Technical Services (Advisory) will:

For redeemed property, expenses of sale, including the cost of advertising, are to be deducted from the excess over the amount required to reimburse the revolving fund before application to the taxpayer's liability. However, if there is no sale, the taxpayer's account will not be debited (See IRM 5.12.5.5.6, Application of Funds From Sale).

If Form 2435 was not previously prepared, a certificate of sale to the United States should be prepared in duplicate in accordance with Exhibit 5.10.7–9 (P–342). The Certificate of Sale and the securities will be forwarded to the Technical Services (Advisory) Group Manager, who will prepare four copies of a transmittal letter following the form in Exhibit 5.10.7–10.

The Technical Services (Advisory) Group Manager will send the following information in one package, by registered mail or by special messenger, to the Bureau of Public Debt:

The forms listed above must list the securities and have a visible seal.

Technical Services (Advisory) will retain a copy of the transmittal letter and duplicate Certificate of Sale with the related case file, and will forward a copy of the transmittal letter to Accounting Control/Services.

The Bureau of Public Debt, Debt Accounting Branch will liquidate the securities in accordance with established Department of the Treasury procedures. Inquiries can be made at (304)480–5161.

Upon the sale, the Debt Accounting Branch will fax a copy of the liquidation letter to the IRS listing:

The proceeds of sale will be deposited for credit of the Campus director for the IRS Location Code using the Fedwire Deposit System.

Efforts should be made to locate a prospective purchaser. The stock may be sold through regular sale procedures for acquired property.

If the stock cannot be disposed of through sale, area counsel should be consulted to determine whether any legal action, by the United States, as owner of the stock interest of the taxpayer, would be appropriate under the law.

Acquired notes will be forwarded to Technical Services (Advisory) for determination of the action that is appropriate. The Technical Services (Advisory) Group Manager will determine whether a sale is necessary, or whether the provisions of the instrument are such that demand for payment can be made upon a person obligated thereunder within a reasonable time after acquisition. In making this determination, area counsel should be consulted if there is any question as to the legality of the instrument or of the proposed action.

If it is determined that demand for payment will be made, the Technical Services (Advisory) Group Manager will prepare a letter to the person obligated to make payment on the note informing him/her that the note was acquired by the United States through a sale under IRC 6335 and that further payments on the note are to be made to the United States Treasury.

If it is determined that the note should be offered for sale rather than demand for payment made from the person obligated, the Technical Services (Advisory) Group Manager will request the appropriate area office to attempt to dispose of the note by public sale.