[House Report 114-730]
[From the U.S. Government Publishing Office]
114th Congress } { Rept. 114-730
HOUSE OF REPRESENTATIVES
2d Session } { Part 1
======================================================================
CLYDE-HIRSCH-SOWERS RESPECT ACT
_______
September 9, 2016.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Brady of Texas, from the Committee on Ways and Means, submitted the
following
R E P O R T
[To accompany H.R. 5523]
[Including cost estimate of the Congressional Budget Office]
The Committee on Ways and Means, to whom was referred the
bill (H.R. 5523) to amend title 31, United States Code, to
prohibit the Internal Revenue Service from carrying out
seizures relating to a structuring transaction unless the
property to be seized derived from an illegal source or the
funds were structured for the purpose of concealing the
violation of another criminal law or regulation, to require
notice and a post-seizure hearing for such seizures, and for
other purposes, having considered the same, report favorably
thereon with an amendment and recommend that the bill as
amended do pass.
CONTENTS
Page
I. SUMMARY AND BACKGROUND............................................3
A. Purpose and Summary................................... 3
B. Background and Need for Legislation................... 3
C. Legislative History................................... 4
II. EXPLANATION OF THE BILL...........................................4
A. Internal Revenue Service Seizure Requirements with
Respect to Structuring Transactions (sec. 2 of the
bill)................................................ 4
B. Exclusion of Interest Received in Action to Recover
Property Seized by the Internal Revenue Service Based
on Structuring Transaction (sec. 3 of the bill and
new sec. 139G of the Code)........................... 7
III.VOTES OF THE COMMITTEE............................................7
IV. BUDGET EFFECTS OF THE BILL........................................7
A. Committee Estimate of Budgetary Effects............... 7
B. Statement Regarding New Budget Authority and Tax
Expenditures Budget Authority........................ 8
C. Cost Estimate Prepared by the Congressional Budget
Office............................................... 8
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE........9
A. Committee Oversight Findings and Recommendations...... 9
B. Statement of General Performance Goals and Objectives. 9
C. Information Relating to Unfunded Mandates............. 9
D. Applicability of House Rule XXI 5(b).................. 9
E. Tax Complexity Analysis............................... 10
F. Congressional Earmarks, Limited Tax Benefits, and
Limited Tariff Benefits.............................. 10
G. Duplication of Federal Programs....................... 10
H. Disclosure of Directed Rule Makings................... 10
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED............10
A. Text of Existing Law Amended or Repealed by the Bill,
as Reported.......................................... 10
B. Changes in Existing Law Proposed by the Bill, as
Reported............................................. 11
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Clyde-Hirsch-Sowers RESPECT Act'' or
the ``Restraining Excessive Seizure of Property through the
Exploitation of Civil Asset Forfeiture Tools Act''.
SEC. 2. INTERNAL REVENUE SERVICE SEIZURE REQUIREMENTS WITH RESPECT TO
STRUCTURING TRANSACTIONS.
Section 5317(c)(2) of title 31, United States Code, is amended--
(1) by striking ``Any property'' and inserting the following:
``(A) In general.--Any property''; and
(2) by adding at the end the following:
``(B) Internal revenue service seizure requirements
with respect to structuring transactions.--
``(i) Property derived from an illegal
source.--Property may only be seized by the
Internal Revenue Service pursuant to
subparagraph (A) by reason of a claimed
violation of section 5324 if the property to be
seized was derived from an illegal source or
the funds were structured for the purpose of
concealing the violation of a criminal law or
regulation other than section 5324.
``(ii) Notice.--Not later than 30 days after
property is seized by the Internal Revenue
Service pursuant to subparagraph (A), the
Internal Revenue Service shall--
``(I) make a good faith effort to
find all persons with an ownership
interest in such property; and
``(II) provide each such person with
a notice of the person's rights under
clause (iv).
``(iii) Extension of notice under certain
circumstances.--The Internal Revenue Service
may apply to a court of competent jurisdiction
for one 30-day extension of the notice
requirement under clause (ii) if the Internal
Revenue Service can establish probable cause of
an imminent threat to national security or
personal safety necessitating such extension.
``(iv) Post-seizure hearing.--If a person
with a property interest in property seized
pursuant to subparagraph (A) by the Internal
Revenue Service requests a hearing by a court
of competent jurisdiction within 30 days after
the date on which notice is provided under
subclause (ii), such property shall be returned
unless the court holds an adversarial hearing
and finds within 30 days of such request (or
such longer period as the court may provide,
but only on request of an interested party)
that there is probable cause to believe that
there is a violation of section 5324 involving
such property and probable cause to believe
that the property to be seized was derived from
an illegal source or the funds were structured
for the purpose of concealing the violation of
a criminal law or regulation other than section
5324.''.
SEC. 3. EXCLUSION OF INTEREST RECEIVED IN ACTION TO RECOVER PROPERTY
SEIZED BY THE INTERNAL REVENUE SERVICE BASED ON
STRUCTURING TRANSACTION.
(a) In General.--Part III of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 is amended by inserting before section
140 the following new section:
``SEC. 139G. INTEREST RECEIVED IN ACTION TO RECOVER PROPERTY SEIZED BY
THE INTERNAL REVENUE SERVICE BASED ON STRUCTURING
TRANSACTION.
``Gross income shall not include any interest received from the
Federal Government in connection with an action to recover property
seized by the Internal Revenue Service pursuant to section 5317(c)(2)
of title 31, United States Code, by reason of a claimed violation of
section 5324 of such title.''.
(b) Clerical Amendment.--The table of sections for part III of
subchapter B of chapter 1 of such Code is amended by inserting before
the item relating to section 140 the following new item:
``Sec. 139G. Interest received in action to recover property seized by
the Internal Revenue Service based on structuring transaction.''.
(c) Effective Date.--The amendments made by this section shall apply
to interest received on or after the date of the enactment of this Act.
I. SUMMARY AND BACKGROUND
A. Purpose and Summary
The ``Clyde-Hirsch-Sowers RESPECT Act,'' H.R. 5523, as
reported by the Committee on Ways and Means, would limit the
Internal Revenue Service's (IRS) civil asset forfeiture
authority. To seize funds the IRS believes to have been
structured to avoid Bank Secrecy Act reporting requirements,
the IRS would have to show probable cause that those funds were
derived from an illegal source or connected to other criminal
activity. H.R. 5523 also would provide procedural protections,
including a prompt post-seizure hearing for people whose assets
the IRS has seized. If a court determines the government should
return funds and interest to a person whose funds were seized
by the IRS based on allegations of structuring, the bill would
exempt the interest from Federal income tax.
B. Background and Need for Legislation
Current law allows the Federal government, including the
IRS, to use civil procedures to seize assets the government
believes are involved in illegal activity without ever having
to prove that the owners of the assets actually were engaged in
criminal activity. For almost two years, the Ways and Means
Subcommittee on Oversight has been investigating the IRS' abuse
of its civil asset forfeiture authority.
The Subcommittee found IRS Criminal Investigation (IRS CI)
was seizing funds that appeared to have been used in
transactions ``structured'' to be under $10,000 to avoid Bank
Secrecy Act reporting requirements. Numerous small business
owners had legitimate reasons for keeping their transactions
under $10,000, including insurance policies that only protected
cash-on-hand up to $10,000 and bank tellers who told the small
business owners to keep their deposits under $10,000 to reduce
paperwork. When business owners tried to get their money back,
their cases would be sent to the Department of Justice (DOJ);
frequently, DOJ attorneys would hold the funds long enough that
the business owners felt compelled to settle the cases and give
up a portion of the funds to get the remainder returned to
them.
The IRS changed its policy in October 2014 to restrict
civil asset forfeitures based on allegations of structuring to
only seize assets involved in other criminal activity, except
in exceptional circumstances. H.R. 5523 would codify those
restrictions without an exemption for exceptional
circumstances. It also would allow asset owners an opportunity
to contest the IRS' seizure in a court hearing 30 to 60 days
after the seizure. Further, if an asset owner contests a
seizure and the court orders that the government return assets
and interest to the the asset owner, the bill would exempt that
interest from Federal income tax.
C. Legislative History
Background
H.R. 5523 was introduced on June 16, 2016, and was referred
to the Committee on Ways and Means, and in addition to the
Committee on Financial Services.
Committee action
The Committee on Ways and Means marked up H.R. 5523, the
``Clyde-Hirsch-Sowers RESPECT Act,'' on July 7, 2016, and
ordered the bill, as amended, favorably reported (with a quorum
being present).
Committee hearings
The Ways and Means Oversight Subcommittee held two hearings
on the IRS' civil asset forfeiture authority during the 114th
Congress. On February 11, 2015, the Subcommittee held a hearing
entitled Protecting Small Businesses from IRS Abuse. On May 25,
2016, the Subcommittee held a hearing entitled Protecting Small
Businesses from IRS Abuse, Part II.
II. EXPLANATION OF THE BILL
A. Internal Revenue Service Seizure Requirements with Respect to
Structuring Transactions (sec. 2 of the bill)
PRESENT LAW
The Bank Secrecy Act (BSA) mandates a reporting and
recordkeeping system that assists Federal law enforcement and
regulatory agencies in the detection, monitoring, and tracing
of certain monetary transactions.\1\ The reporting requirements
are imposed on individuals, financial institutions, and non-
financial trades and businesses relative to monetary
transactions and banking relationships. The requirements
include reporting currency transactions exceeding $10,000.
---------------------------------------------------------------------------
\1\31 U.S.C. secs. 5311-5332.
---------------------------------------------------------------------------
To circumvent these reporting requirements, persons
sometimes structure cash transactions to fall below the $10,000
reporting threshold (referred to as ``structuring''). In other
words, instead of conducting a single transaction in currency
in an amount that would require a report to be filed or record
made by a financial institution, an individual conducts a
series of currency transactions, willfully keeping each
individual transaction at an amount below applicable thresholds
to evade reporting or recording. Structuring can be used to
conceal illegal cash-generating activities, such as the selling
of narcotics, and to conceal income earned legally in order to
evade the payment of taxes. Structuring (or attempts to
structure) for the purpose of evading the reporting and record-
keeping requirements\2\ is subject to both civil and criminal
penalties.\3\
---------------------------------------------------------------------------
\2\31 U.S.C. secs. 5313(a), 5324(a).
\3\A person who willfully violates the law is subject to a fine of
not more than $250,000, or imprisonment for not more than five years,
or both. 31 U.S.C. sec. 5324(a); 31 U.S.C. sec. 5322.
---------------------------------------------------------------------------
Current law authorizes forfeiture of property involved in
transactions or attempted transactions\4\ in violation of these
rules in accordance with the procedures governing civil
forfeitures in money laundering cases.\5\
---------------------------------------------------------------------------
\4\31 U.S.C. sec. 5317(c)(2).
\5\See 18 U.S.C. sec. 981.
---------------------------------------------------------------------------
The Secretary of the Treasury has delegated responsibility
for implementing and enforcing the BSA to the Director,
Financial Crimes Enforcement (FinCEN), who in turn re-delegated
responsibility for civil compliance with the law to various
Federal agencies including the IRS.\6\ The scope of that
delegation of authority was expanded subsequently, after
enactment of the USA PATRIOT Act of 2001,\7\ and includes
authority to determine and enforce civil penalties.\8\ The IRS
administers its delegated authority under the BSA through the
IRS Small Business/Self-Employed Division, with assistance from
IRS CI.
---------------------------------------------------------------------------
\6\Treasury Directive 15-41 (December 1, 1992). At the time of the
initial delegation, FinCEN was an entity created by regulatory action,
but has since been explicitly authorized by statute. 31 U.S.C. sec.
310.
\7\Treasury Order 180-01, https://www.treasury.gov/about/role-of-
treasury/orders-directives/Pages/to180-01.aspx, delegating authority to
FinCEN. For a discussion of the relationship between FinCEN and the
agencies to which it re-delegated authority, see, Office of Inspector
General, ``TERRORIST FINANCING/MONEY LAUNDERING: Responsibility for
Bank Secrecy Act Is Spread Across Many Organizations,'' OIG-08-030
(April 9, 2008), available at https://www.treasury.gov/about/
organizational-structure/ig/Documents/oig08030.pdf.
\8\A penalty may be assessed before the end of the six-year period
beginning on the date of the transaction with respect to which the
penalty is assessed. 31 U.S.C. sec. 5321(b)(1). A civil action for
collection may be commenced within two years of the later of the date
of assessment and the date a judgment becomes final in any a related
criminal action. 31 U.S.C. sec. 5321(b)(2).
---------------------------------------------------------------------------
If a person whose property was subject to forfeiture
prevails in a civil forfeiture proceeding involving seizure of
currency, the United States may be liable for reasonable
attorney fees and other litigation costs reasonably incurred by
the claimant; post-judgment interest; and interest actually
paid to the United States from the date of seizure or arrest of
the property that resulted from the investment of the property
in an interest-bearing account or instrument as well as imputed
interest for the period for which no interest was paid.\9\
---------------------------------------------------------------------------
\9\28 U.S.C. sec. 2465(b)(1). The imputed interest that may be paid
under that section is the amount that such currency, instruments, or
proceeds would have earned at the rate applicable to the 30-day
Treasury Bill, for any period for which no interest was paid (not
including any period when the property reasonably was in use as
evidence in an official proceeding or in conducting scientific tests
for the purpose of collecting evidence), commencing 15 days after the
property was seized by a Federal law enforcement agency, or was turned
over to a Federal law enforcement agency by a State or local law
enforcement agency.
---------------------------------------------------------------------------
Prior to October 2014, the IRS provided partial relief in
structuring cases involving a first offense, a legitimate
funding source, and no criminal conviction. The IRS procedures
also required its criminal investigation division to consider
additional mitigating or aggravating factors. On October 17,
2014, IRS CI issued guidance on how it will conduct seizures
and forfeitures in its structuring cases.\10\ Pursuant to this
guidance, the IRS will not pursue seizure and forfeiture of
funds associated only with so-called ``legal source''
structuring unless: (1) there are exceptional circumstances
justifying the seizure and forfeiture and (2) the case is
approved by the Director of Field Operations.
---------------------------------------------------------------------------
\10\Memorandum for Special Agents in Charge Criminal Investigation,
October 17, 2014, available at http://ij.org/wp-content/uploads/2015/
07/IJ068495.pdf; Written Testimony of John A. Koskinen and Richard
Weber, House Committee on Ways and Means Subcommittee on Oversight on
``Financial Transaction Structuring,'' May 25, 2016, available at
https://www.irs.gov/uac/newsroom/written-testimony-of-john-a-koskinen-
and-richard-weber-before-the-house-committee-on-ways-and-means-
subcommittee-on-oversight-on-financial-transaction-structuring-may-25-
2016; New IRS Special Procedure to Allow Property Owners to Request
Return of Property, Funds in Specific Structuring Cases, June 16, 2016,
available at https://www.irs.gov/uac/newsroom/new-irs-special-
procedure-to-allow-property-owners-to-request-return-of-property-funds-
in-specific-structuring-cases; Letter to Chairman Roskam and Ranking
Member Lewis summarizing planned actions, June 10, 2016, available at
http://waysandmeans.house.gov/wp-content/uploads/2016/06/6.9-Roskam-
Lewis-Response-Letter-and-Enclosure.pdf.
---------------------------------------------------------------------------
REASONS FOR CHANGE
The Committee has learned of numerous instances in which
the assets of hardworking taxpayers were seized by the IRS in
civil asset forfeiture actions on the basis of suspected
violations of the structuring rules. Accordingly, the Committee
believes it is necessary to limit the authority of the IRS by
requiring that the IRS show probable cause that funds subject
to forfeiture for structuring were derived from an illegal
source or connected to other criminal activity before the IRS
can seize funds. The Committee also believes it is necessary to
implement new procedural protections for persons whose assets
the IRS has seized in such forfeiture actions, including a
post-seizure hearing.
EXPLANATION OF PROVISION
In cases in which a civil asset forfeiture is conducted by
the IRS on the basis of a suspected structuring violation,
either the property to be seized must be derived from an
illegal source or the structuring must be done for the purpose
of concealing a violation of a criminal law or regulation other
than structuring.
The provision establishes post-seizure notice and review
procedures for IRS seizures based on suspected structuring
violations. The IRS must, within 30 days, make a good-faith
effort to find the owner of the property seized and inform him
or her of certain post-seizure hearing rights provided under
the provision. This 30-day notice requirement may be extended
if the IRS can establish probable cause of an imminent threat
to national security or personal safety. If a notice recipient
requests a court hearing within 30 days of the notice, the
property is required to be returned unless the court finds that
there is probable cause to believe that the property to be
seized was derived from an illegal source or the funds were
structured for the purpose of concealing the violation of a
criminal law or regulation other than the structuring
provisions of the BSA.
EFFECTIVE DATE
The provision is effective on the date of enactment.
B. Exclusion of Interest Received in Action to Recover Property Seized
by the Internal Revenue Service Based on Structuring Transaction (sec.
3 of the bill and new sec. 139G of the Code)
PRESENT LAW
Nothing in the BSA or the administrative guidance issued by
the IRS affects the Federal tax treatment of the interest that
may be paid to the successful litigant in civil asset
forfeiture proceedings. The Code provides no specific exclusion
from gross income (or deduction from adjusted gross income) for
amounts received pursuant to an action to recover property
seized by the IRS pursuant to the BSA. Accordingly, the
interest received is includable in gross income, under section
61.
REASONS FOR CHANGE
The Committee believes interest on wrongly seized funds
should be exempt from income tax if a court determines the
Government must return the funds and interest accrued to the
victim of IRS abuse.
EXPLANATION OF PROVISION
The provision amends the Code to exclude from gross income
any interest received from the Federal Government in connection
with an action to recover property seized by the IRS pursuant
to a claimed violation of the structuring provisions of the
BSA.
EFFECTIVE DATE
The provision applies to interest received on or after the
date of enactment.
III. VOTES OF THE COMMITTEE
In compliance with the Rules of the House of
Representatives, the following statement is made concerning the
vote of the Committee on Ways and Means during the markup
consideration of H.R. 5523, the ``Clyde-Hirsch-Sowers RESPECT
Act,'' on July 7, 2016.
The Chairman's amendment in the nature of a substitute was
adopted by a voice vote (with a quorum being present).
The bill, H.R. 5523, as amended, was ordered favorably
reported to the House of Representatives by a voice vote (with
a quorum being present).
IV. BUDGET EFFECTS OF THE BILL
A. Committee Estimate of Budgetary Effects
In compliance with clause 3(d) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the effects on the budget of the bill, H.R. 5523, as
reported.
The bill, as reported, is estimated to have the following
effect on Federal budget receipts for fiscal years 2017-2026:
The proposal is estimated to reduce Federal fiscal year budget
receipts by less than $500,000 for the period 2017 through
2026.
Pursuant to clause 8 of rule XIII of the Rules of the House
of Representatives, the following statement is made by the
Joint Committee on Taxation with respect to the provisions of
the bill amending the Internal Revenue Code of 1986: The gross
budgetary effect (before incorporating macroeconomic effects)
in any fiscal year is less than 0.25 percent of the current
projected gross domestic product of the United States for that
fiscal year; therefore, the bill is not ``major legislation''
for purposes of requiring that the estimate include the
budgetary effects of changes in economic output, employment,
capital stock and other macroeconomic variables.
B. Statement Regarding New Budget Authority and Tax Expenditures Budget
Authority
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee states that the
bill involves no new or increased budget authority. The
Committee further states that the revenue-reducing tax
provision involves a new tax expenditure. See Part IV.A.,
above.
C. Cost Estimate Prepared by the Congressional Budget Office
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, requiring a cost estimate
prepared by the CBO, the following statement by CBO is
provided.
U.S. Congress,
Congressional Budget Office,
Washington, DC, July 13, 2016.
Hon. Kevin Brady,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 5523, the Clyde-
Hirsch-Sowers RESPECT Act.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Matthew
Pickford.
Sincerely,
Keith Hall.
Enclosure.
H.R. 5523--Clyde-Hirsch-Sowers RESPECT Act
Current law requires that banks and other financial
institutions report to the Treasury any financial transaction
that involves more than $10,000 in cash. People who circumvent
that requirement by conducting a series of smaller transactions
instead of a single transaction are subject to both civil and
criminal penalties. H.R. 5523 would prohibit the Internal
Revenue Service (IRS) from seizing money from people who
circumvent those reporting requirements unless the agency
proves that the money was connected to a crime. In addition,
the bill would exempt from federal income tax any interest that
the Treasury pays on seized funds that are returned.
Based on information from the Department of Treasury and
the IRS, CBO estimates that implementing the legislation would
have no significant administrative cost over the next five
years because most provisions would codify existing IRS policy
and practice. The staff of the Joint Committee on Taxation
(JCT) estimate that enacting the bill would decrease revenues
by a negligible amount over the 2017-2026 period; therefore,
pay-as-you-go procedures apply. Enacting H.R. 5523 would not
affect direct spending.
CBO estimates that enacting H.R. 5523 would not increase
net direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2027.
CBO and JCT have determined that H.R. 5523 contains no
intergovernmental or private-sector mandates as defined in the
Unfunded Mandates Reform Act.
The CBO staff contact for this estimate is Matthew
Pickford. The estimate was approved by H. Samuel Papenfuss,
Deputy Assistant Director for Budget Analysis.
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE
A. Committee Oversight Findings and Recommendations
With respect to clause 3(c)(1) of rule XIII of the Rules of
the House of Representatives (relating to oversight findings),
the Committee advises that the findings and recommendations of
the Committee, based on oversight activities under clause
2(b)(1) of rule X of the Rules of the House of Representatives,
are incorporated in the descriptive portions of this report.
B. Statement of General Performance Goals and Objectives
With respect to clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
bill contains no measure that authorizes funding, so no
statement of general performance goals and objectives for which
any measure authorizes funding is required.
C. Information Relating to Unfunded Mandates
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
The Committee has determined that the bill does not contain
Federal mandates on the private sector. The Committee has
determined that the bill does not impose a Federal
intergovernmental mandate on State, local, or tribal
governments.
D. Applicability of House Rule XXI 5(b)
Rule XXI 5(b) of the Rules of the House of Representatives
provides, in part, that ``A bill or joint resolution,
amendment, or conference report carrying a Federal income tax
rate increase may not be considered as passed or agreed to
unless so determined by a vote of not less than three-fifths of
the Members voting, a quorum being present.'' The Committee has
carefully reviewed the bill, and states that the bill does not
involve any Federal income tax rate increases within the
meaning of the rule.
E. Tax Complexity Analysis
Section 4022(b) of the Internal Revenue Service
Restructuring and Reform Act of 1998 (``IRS Reform Act'')
requires the staff of the Joint Committee on Taxation (in
consultation with the Internal Revenue Service and the Treasury
Department) to provide a tax complexity analysis. The
complexity analysis is required for all legislation reported by
the Senate Committee on Finance, the House Committee on Ways
and Means, or any committee of conference if the legislation
includes a provision that directly or indirectly amends the
Internal Revenue Code of 1986 and has widespread applicability
to individuals or small businesses.
Pursuant to clause 3(h)(1) of rule XIII of the Rules of the
House of Representatives, the staff of the Joint Committee on
Taxation has determined that a complexity analysis is not
required under section 4022(b) of the IRS Reform Act because
the bill contains no provisions that amend the Internal Revenue
Code of 1986 and that have ``widespread applicability'' to
individuals or small businesses, within the meaning of the
rule.
F. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the bill and states that the provisions of
the bill do not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits within the meaning of the
rule.
G. Duplication of Federal Programs
In compliance with Sec. 3(g)(2) of H. Res. 5 (114th
Congress), the Committee states that no provision of the bill
establishes or reauthorizes: (1) a program of the Federal
Government known to be duplicative of another Federal program,
(2) a program included in any report from the Government
Accountability Office to Congress pursuant to section 21 of
Public Law 111-139, or (3) a program related to a program
identified in the most recent Catalog of Federal Domestic
Assistance, published pursuant to the Federal Program
Information Act (Public Law 95-220, as amended by Public Law
98-169).
H. Disclosure of Directed Rule Makings
In compliance with Sec. 3(i) of H. Res. 5 (114th Congress),
the following statement is made concerning directed rule
makings: The Committee estimates that the bill requires no
directed rule makings within the meaning of such section.
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
A. Text of Existing Law Amended or Repealed by the Bill, as Reported
In compliance with clause 3(e)(1)(A) of rule XIII of the
Rules of the House of Representatives, the text of each section
proposed to be amended or repealed by the bill, as reported, is
shown below:
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e)(1)(A) of rule XIII of the
Rules of the House of Representatives, the text of each section
proposed to be amended or repealed by the bill, as reported, is
shown below:
TITLE 31, UNITED STATES CODE
* * * * * * *
SUBTITLE IV--MONEY
* * * * * * *
CHAPTER 53--MONETARY TRANSACTIONS
* * * * * * *
SUBCHAPTER II--RECORDS AND REPORTS ON MONETARY INSTRUMENTS TRANSACTIONS
* * * * * * *
Sec. 5317. Search and forfeiture of monetary instruments
(a) The Secretary of the Treasury may apply to a court of
competent jurisdiction for a search warrant when the Secretary
reasonably believes a monetary instrument is being transported
and a report on the instrument under section 5316 of this title
has not been filed or contains a material omission or
misstatement. The Secretary shall include a statement of
information in support of the warrant. On a showing of probable
cause, the court may issue a search warrant for a designated
person or a designated or described place or physical object.
This subsection does not affect the authority of the Secretary
under another law.
(b) Searches at Border.--For purposes of ensuring compliance
with the requirements of section 5316, a customs officer may
stop and search, at the border and without a search warrant,
any vehicle, vessel, aircraft, or other conveyance, any
envelope or other container, and any person entering or
departing from the United States.
(c) Forfeiture.--
(1) Criminal forfeiture.--
(A) In general.--The court in imposing
sentence for any violation of section 5313,
5316, or 5324 of this title, or any conspiracy
to commit such violation, shall order the
defendant to forfeit all property, real or
personal, involved in the offense and any
property traceable thereto.
(B) Procedure.--Forfeitures under this
paragraph shall be governed by the procedures
established in section 413 of the Controlled
Substances Act.
(2) Civil forfeiture.--Any property involved in a
violation of section 5313, 5316, or 5324 of this title,
or any conspiracy to commit any such violation, and any
property traceable to any such violation or conspiracy,
may be seized and forfeited to the United States in
accordance with the procedures governing civil
forfeitures in money laundering cases pursuant to
section 981(a)(1)(A) of title 18, United States Code.
* * * * * * *
B. Changes in Existing Law Proposed by the Bill, as Reported
In compliance with clause 3(e)(1)(B) of rule XIII of the
Rules of the House of Representatives, changes in existing law
proposed by the bill, as reported, are shown as follows
(existing law proposed to be omitted is enclosed in black
brackets, new matter is printed in italics, existing law in
which no change is proposed is shown in roman):
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e)(1)(B) of rule XIII of the
Rules of the House of Representatives, changes in existing law
made by the bill, as reported, are shown as follows (existing
law proposed to be omitted is enclosed in black brackets and
existing law in which no change is proposed is shown in roman):
TITLE 31, UNITED STATES CODE
* * * * * * *
SUBTITLE IV--MONEY
* * * * * * *
CHAPTER 53--MONETARY TRANSACTIONS
* * * * * * *
SUBCHAPTER II--RECORDS AND REPORTS ON MONETARY INSTRUMENTS TRANSACTIONS
* * * * * * *
Sec. 5317. Search and forfeiture of monetary instruments
(a) The Secretary of the Treasury may apply to a court of
competent jurisdiction for a search warrant when the Secretary
reasonably believes a monetary instrument is being transported
and a report on the instrument under section 5316 of this title
has not been filed or contains a material omission or
misstatement. The Secretary shall include a statement of
information in support of the warrant. On a showing of probable
cause, the court may issue a search warrant for a designated
person or a designated or described place or physical object.
This subsection does not affect the authority of the Secretary
under another law.
(b) Searches at Border.--For purposes of ensuring compliance
with the requirements of section 5316, a customs officer may
stop and search, at the border and without a search warrant,
any vehicle, vessel, aircraft, or other conveyance, any
envelope or other container, and any person entering or
departing from the United States.
(c) Forfeiture.--
(1) Criminal forfeiture.--
(A) In general.--The court in imposing
sentence for any violation of section 5313,
5316, or 5324 of this title, or any conspiracy
to commit such violation, shall order the
defendant to forfeit all property, real or
personal, involved in the offense and any
property traceable thereto.
(B) Procedure.--Forfeitures under this
paragraph shall be governed by the procedures
established in section 413 of the Controlled
Substances Act.
(2) Civil forfeiture.--[Any property]
(A) In general._Any property involved in a
violation of section 5313, 5316, or 5324 of
this title, or any conspiracy to commit any
such violation, and any property traceable to
any such violation or conspiracy, may be seized
and forfeited to the United States in
accordance with the procedures governing civil
forfeitures in money laundering cases pursuant
to section 981(a)(1)(A) of title 18, United
States Code.
(B) Internal revenue service seizure
requirements with respect to structuring
transactions.--
(i) Property derived from an illegal
source.--Property may only be seized by
the Internal Revenue Service pursuant
to subparagraph (A) by reason of a
claimed violation of section 5324 if
the property to be seized was derived
from an illegal source or the funds
were structured for the purpose of
concealing the violation of a criminal
law or regulation other than section
5324.
(ii) Notice.--Not later than 30 days
after property is seized by the
Internal Revenue Service pursuant to
subparagraph (A), the Internal Revenue
Service shall--
(I) make a good faith effort
to find all persons with an
ownership interest in such
property; and
(II) provide each such person
with a notice of the person's
rights under clause (iv).
(iii) Extension of notice under
certain circumstances.--The Internal
Revenue Service may apply to a court of
competent jurisdiction for one 30-day
extension of the notice requirement
under clause (ii) if the Internal
Revenue Service can establish probable
cause of an imminent threat to national
security or personal safety
necessitating such extension.
(iv) Post-seizure hearing.--If a
person with a property interest in
property seized pursuant to
subparagraph (A) by the Internal
Revenue Service requests a hearing by a
court of competent jurisdiction within
30 days after the date on which notice
is provided under subclause (ii), such
property shall be returned unless the
court holds an adversarial hearing and
finds within 30 days of such request
(or such longer period as the court may
provide, but only on request of an
interested party) that there is
probable cause to believe that there is
a violation of section 5324 involving
such property and probable cause to
believe that the property to be seized
was derived from an illegal source or
the funds were structured for the
purpose of concealing the violation of
a criminal law or regulation other than
section 5324.
* * * * * * *
----------
INTERNAL REVENUE CODE OF 1986
* * * * * * *
Subtitle A--Income Taxes
* * * * * * *
CHAPTER 1--NORMAL TAXES AND SURTAXES
* * * * * * *
Subchapter B--Computation of Taxable Income
* * * * * * *
PART III--ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME
* * * * * * *
Sec. 139G. Interest received in action to recover property seized by the
Internal Revenue Service based on structuring transaction.
* * * * * * *
SEC. 139G. INTEREST RECEIVED IN ACTION TO RECOVER PROPERTY SEIZED BY
THE INTERNAL REVENUE SERVICE BASED ON STRUCTURING
TRANSACTION.
Gross income shall not include any interest received from the
Federal Government in connection with an action to recover
property seized by the Internal Revenue Service pursuant to
section 5317(c)(2) of title 31, United States Code, by reason
of a claimed violation of section 5324 of such title.
* * * * * * *
[all]