When property is seized for forfeiture, there may be several individuals or entities that have claims to the property, including the individual from whom it was seized. This section will discuss the types of requests for the seized property and how to relinquish custody and return seized property. The types of requests include:

Claims filed in an administrative forfeiture action requesting judicial determination are discussed in IRM 9.7.2, Civil Seizure and Forfeiture.

See IRM 1.2.2.10.1, Delegation Order 9-1 (Formerly DO-157, Rev. 7), Seizure and Forfeiture of Personal Property and IRM 1.2.2.10.2, Order Number 9-2 (Formerly DO-158, Rev. 2), Initiate Investigations and Seize and Forfeit Property under the Money Laundering Control Act and Bank Secrecy Acts for the delegated authority relating to IRM 9.7.7, Claims and Petitions.

The Director, Asset Recovery and Investigative Services is responsible for developing, maintaining, and overseeing this IRM and ensuring employee compliance with current policies and procedures.

The Director, Asset Recovery and Investigative Services will:

The Director, Asset Recovery and Investigative Services will review the instructions and guidelines relating to the investigation of tax returns and other IRS documents for procedural, operational, and editorial changes.

The Director, Asset Recovery and Investigative Services will review and oversee their programs as well as ensuring employee compliance with all applicable elements of this IRM.

The table lists the acronyms used throughout this IRM section and their definitions:

18 USC 981, Civil forfeiture.

18 USC 982, Criminal forfeiture.

18 USC 983, General rules for civil forfeiture proceedings.

18 USC 3663A, Mandatory restitution to victims of certain crimes.

28 CFR 8.7, Release before claim.

28 CFR 9.6(f), Special rules for specific petitioners - Judgment creditors.

28 CFR 9.7, Terms and conditions of remission and mitigation.

31 USC 5313, Reports on domestic coins and currency transactions.

31 USC 5324, Structuring transactions to evade reporting requirement prohibited.

IRM 9.7.2, Civil Seizure and Forfeiture.

IRM 9.7.4, Pre-Seizure Planning.

Anyone with an ownership interest in property to be forfeited may assert as a defense that they are an "innocent owner." The requirements for the innocent owner defense are contained in 18 USC 983(d), Innocent Owner Defense.

There are two different innocent owner defenses to forfeiture proceedings. One applies to persons who held their interest in the property while the illegal activity was occurring, and the other applies to persons who acquired their interest in the property after the illegal activity occurred.

A person who had an interest in the property at the time the illegal activity was occurring can establish that they are an innocent owner by showing:

Examples of how an owner may show that they did all that reasonably could be expected may include demonstrating that they:

A person who acquired an interest in the property after the illegal activity occurred can establish that they are an innocent owner by showing that:

A person claiming to be an innocent owner has the burden of proving that they are an innocent owner and must show satisfactory proof of ownership or an ownership interest.

The investigating agent, in coordination with the Asset Forfeiture Coordinator (AFC), will timely investigate the merits of an innocent ownership claim based on the criteria above and report the results of the investigation to the SAC, who will decide whether to authorize the quick release.

If the SAC determines that the person is not an innocent owner, the property will be retained, and the forfeiture action will continue.

If the SAC determines that the person is an innocent owner and authorizes the quick release, an executed Release of Claim and a Form 5914, Release and Receipt of Property, should be obtained from the innocent owner at the time the property is returned. See Exhibit 9.7.7-1, IRS Release of Claim, and , Form 5914 - Release and Receipt of Property.

The basis for any quick release of seized property must be documented in the seizure/forfeiture file. This should include the SACs reasoning for quick release of the property and/or the SACs reasoning for rejecting an innocent owner claim and not releasing the property.

A person cannot file a hardship petition unless they have first filed a claim to the seized property. See IRM 9.7.2.7, Administrative Forfeiture Proceedings, for the process to file a claim.

Directive Number 35 instructs seizing agencies to provide appropriate information regarding the release of seized property (hardship) in the written notice sent to interested parties.

The information required in a notice letter includes:

A claimant seeking immediate release of seized property must submit a hardship petition in writing.

A claimant is entitled to immediate release of seized property if they establish that the following requirements are met:

If the claimant fails to establish any of the requirements listed above, the hardship petition must be denied.

Certain property may not be released to a claimant through a hardship petition, including:

A hardship petition requesting seized property that falls within any of the categories listed in (4) above must be denied.

The AFC is responsible for recording the date a hardship petitioner requests a release of property and the date the agency received the request.

The investigating agent, in coordination with the AFC, will timely investigate the merits of a hardship petition and will report the results of the investigation by memorandum to the SAC. This will enable the seized property to be returned within 15 days of receipt of the hardship petition in the event the hardship petition is granted.

The SAC has delegated authority to grant or deny a hardship petition.

As some US Attorney's Offices (USAO) may want to be involved in the hardship petition process, the AFC may facilitate coordination between USAO and Criminal Investigation (CI) as directed by the SAC.

If the SAC grants a hardship petition, the seized property must be released within 15 days of the SAC’s decision and/or receiving the hardship petition, whenever warranted.

The AFC will work closely with the seized property contractor to achieve return of the seized property within 15 days of the SAC’s decision and/or receiving the hardship petition, whenever warranted.

The statute, 18 USC 983(f), does not authorize the seizing agency to take specific protective action to ensure the value of seized property released pursuant to a hardship petition. A general release should be used to protect the government from certain liabilities and inform the petitioner that the seizing agency reserves the right to retake possession of the property if it is used in violation of federal law. The release is contained in Exhibit 9.7.7-3, Agreement for the Release of Seized Property.

The signature of the claimant or party to whom the seized property will be released should be obtained on the release. The claimant's refusal to sign the release is not a basis for denying the hardship petition. A claimant that refuses to sign a release should be provided a copy to document that they were made aware of the contents of the release.

The AFC should notify and/or consult with the Assistant U.S. Attorney (AUSA) responsible for the forfeiture prior to the release of seized property when a hardship petition is granted.

If a hardship petition is denied, a letter stating the statutory basis for the denial will be prepared by the AFC for the signature of the SAC and sent to the claimant. Exhibit 9.7.7-7, Petitioner Denial Letter. The denial letter does not need to include specific reasons for the denial, although such specific information should be well documented in the seizure/forfeiture file. The denial letter will be sufficient if it states the general statutory basis for the denial and explains the other relief available to the petitioner.

The AFC should notify and/or consult with the AUSA responsible for the forfeiture of the decision on a hardship petition prior to sending a denial letter.

An individual or entity with an ownership interest in the property seized for forfeiture may contest the forfeiture by filing a claim, filing a petition for remission or mitigation, or both. The filing of a petition does not waive or suspend any time limits for filing a claim requesting a judicial determination of the forfeiture.

When a petition for remission or mitigation of forfeiture is filed in an administrative or civil judicial forfeiture action, the forfeiture process, including the publication of the notice of seizure, will continue as scheduled. However, once the property is forfeited, it shall not be placed into official use, sold, or otherwise disposed of according to law until final action is taken on the petition.

When an interested party in an administrative forfeiture action has filed a claim requesting a judicial determination of the forfeiture, and another interested party has filed a petition for remission or mitigation, the investigation related to the petition will be terminated and the further processing of the petition handled by USAO. The petition and associated evidence will be included in the referral of the claim from the SAC to USAO. Occasionally, the USAO requests a recommendation from CI regarding the petition. If requested, the SAC will provide the recommendation. See IRM 9.7.2, Civil Seizure and Forfeiture.

There is no prescribed format for a petition for remission or mitigation. The written notice sent to interested parties in an administrative forfeiture action includes the procedure to request relief through the petition process and advises that:

Petitions for remission or mitigation in an administrative forfeiture action should be addressed to the SAC of the field office responsible for the forfeiture. Petitions in civil judicial or criminal forfeiture proceedings should be addressed to the Attorney General and submitted to the U.S. Attorney for the judicial district where the forfeiture proceedings are brought.

The written notice sent to interested parties in an administrative forfeiture action advises that a petition for remission or mitigation must be filed within 35 days of the mailing of the letter.

Petitions for remission or mitigation should be reviewed and can be considered any time after written notice is sent to interested parties, after the property is forfeited and until the forfeited property is placed into official use, sold, or otherwise disposed of according to law, except in cases involving petitions to restore the proceeds.

A petitioner seeking remission of civilly forfeited property, must establish:

The petitioner has the burden of proving that they are an innocent owner by the preponderance of the evidence.

Mitigation may be granted to a party not involved in the commission of the offense underlying the forfeiture where:

Mitigation may be granted to a party involved in the commission of the offense underlying the forfeiture where certain mitigating factors exist, including, but not limited to the:

Mitigation may take the form of a monetary condition or the imposition of other conditions relating to the continued use of the property or the return of the property, in addition to the imposition of any other costs that would be chargeable as a condition to remission. This monetary condition is considered as an item of cost payable by the petitioner and shall be deposited into the Treasury Forfeiture Fund as an amount realized from forfeiture.

A general creditor is one whose claim or debt is not secured by a specific right to obtain satisfaction against the particular property subject to forfeiture. Unsecured general creditors are not entitled to remission or mitigation since they are unable to directly trace their ownership interest to identifiable assets in the forfeiture pool. The petitioner may have grounds that entitles them to bring a suit against the violator on the debt but will have no specific interest in the property subject to forfeiture. Trade creditors, who have breach of contract actions against the violator or former employees with claims for employee benefits, have no standing to file petitions for the same reason. The situation is different if the creditor has reduced their claim to a judgment and obtained a judgment lien against specific assets.

A judgment creditor is one who has obtained a judgment against a debtor/violator but has not yet received full satisfaction of the judgment. A judgment creditor may qualify as a lienholder entitled to remission if it meets certain conditions. For more information regarding judgment creditors, see 28 CFR 9.6(f), Special rules for specific petitioners - Judgment creditors.

In an administrative forfeiture action, once a petition for remission or mitigation has been filed, the agency that seized the property is responsible for investigating the merits of the petition and submitting a report on the investigation to the deciding official. In a judicial forfeiture action, the AUSA must submit the petition, with any requested report of the investigation by the seizing agency and their recommendation, to the Department of Justice Money Laundering and Asset Recovery Sections (MLARS) for a final determination.

The Deputy Director, Global Operations Policy & Support (GO) is the designated CI official authorized to grant or deny a petition for remission or mitigation of forfeiture of property seized under 18 USC 981, in an administrative forfeiture action. Any CI Executive also has the authority to grant or deny petitions.

Where the petition for remission or mitigation alleges facts not previously considered or that are unsupported, it may be necessary to investigate these issues before the merits of the petition can be evaluated. The investigation of a petition filed in an administrative forfeiture action will be completed within 30 days of receipt. If a petition refers to the existence of evidence that was not included with the petition, the petitioner will be allowed a reasonable period of time (such as 10 days) to submit the evidence. The investigation of a petition must be thorough, accurate, and conclusive to support the actions taken by the Deputy Director, GO. An inordinate amount of time and effort should not be expended addressing irrelevant claims.

The petitioner's cooperation in an investigation of a petition for remission or mitigation is paramount. A petitioner should be advised that failure to cooperate or to provide requested information or documents and submit to interviews might result in denial of the petition.

A report of the investigation of a petition for remission or mitigation, with the field office recommendation to grant or deny the petition prepared in the form of a memorandum, will be forwarded from the SAC to the Division Counsel/Associate Chief Counsel (hereinafter referred to as Division Counsel) through the field Criminal Tax (CT) attorney. The SAC will ensure that all issues presented within the petition have been addressed in the report. The petition (evidence submitted by the petitioner, evidence supporting the recommendation by the field office, and any other relevant documentation that will assist Division Counsel in reviewing the petition) should be included with the report.

There are no specific time limits established by statute or case law for ruling on a petition for remission or mitigation. However, CI has established guidelines for processing petitions to prevent unreasonable or undue delay.

The SAC will forward the report of the investigation of a petition for remission or mitigation and the field office recommendation to grant or deny the petition to the Division Counsel, through the field CT attorney, within 30 days of receipt of the petition whenever possible.

The field CT attorney will review and forward to the Division Counsel the report of the investigation of a petition for remission or mitigation, the Law and Fact Memorandum previously prepared in the administrative forfeiture action, and any additional information, if applicable, within 15 days of receipt from CI.

The Division Counsel, after reviewing the report of the investigation of a petition for remission or mitigation and making any contacts with the investigating agent, AFC, or field CT attorney, as necessary for additional information, will prepare and submit the following to the Deputy Director, GO, within 60 days of receipt from the field CT attorney:

The Deputy Director, GO, will review the factual situation and the recommendation of the Division Counsel in making the decision whether to grant or deny a petition for remission or mitigation. No hearing will be held.

The Deputy Director, GO, will forward the decision to grant or deny the petition for remission or mitigation to the SAC for implementation, using the memorandum and letter drafted by the Division Counsel, if in agreement, or by original documents if the decision of the Deputy Director, GO, differs from that recommended by the Division Counsel.

If the Deputy Director, GO, grants the petition for remission or mitigation, a decision letter from the SAC will be sent to the petitioner and/or the petitioner's attorney by certified mail, return receipt requested. The letter to the petitioner will be prepared by, or with assistance, from the Division Counsel.

A model first offense warning letter for violations of 31 USC 5313(a), Reports on domestic coins and currency transactions, and 31 USC 5324(a), Domestic coin and currency transactions involving financial institutions, is found in , First Offense Warning Letter. The warning letter should also be included in correspondence to the petitioner.

Costs incurred in the forfeiture that were incident to the forfeiture, sale, or other disposition of the property shall be deducted from the amount available for remission or mitigation. The Deputy Director, GO, has the discretion to waive the costs.

For detailed information on the terms and conditions of remission and mitigation for owners and lien holders, see 28 CFR 9.7, Terms and conditions of remission and mitigation.

If the Deputy Director, GO, denies the petition for remission or mitigation, a decision letter from the SAC will be sent to the petitioner and/or the petitioner's attorney by certified mail, return receipt requested. The letter to the petitioner, prepared by or with assistance from the Division Counsel, will advise the petitioner of the reasons for denial. The letter will also advise the petitioner of the right to appeal the decision of the Deputy Director, GO, by submitting a request for reconsideration of the denial.

A request for reconsideration of the denial of a petition for remission or mitigation will be considered if:

The same official that ruled on the original petition for remission or mitigation will not decide a request for reconsideration. A valid request for reconsideration will be decided by the CI, Deputy Chief. The new information or evidence in the request for reconsideration of the denial of a petition for remission or mitigation will be investigated and the recommendation to grant or deny the request will be forwarded from the SAC to the Director, GO, Attn: Director, ARIS. The request may be referred to the Division Counsel if the Director, GO believes that any new evidence submitted by the petitioner warrants a review of the Division Counsel's position.

Only one request for reconsideration of a denial of a petition will be considered.

A petition for restoration of the proceeds from the sale of forfeited property, or for the appraised value of forfeited property when the forfeited property has been retained by or transferred to a government agency for official use, may be submitted by an owner or lienholder in cases in which the petitioner:

A petition for restoration of the proceeds must be submitted within 90 days of the date the property is sold or otherwise disposed of.

A petition for restoration of the proceeds will be investigated and processed in the same manner as a petition for remission or mitigation.