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115th Congress }                                          { REPORT Part 1
                        HOUSE OF REPRESENTATIVES
 1st Session   }                                          { 115-286

======================================================================

 
 RESTRAINING EXCESSIVE SEIZURE OF PROPERTY THROUGH THE EXPLOITATION OF 
                    CIVIL ASSET FORFEITURE TOOLS ACT

                                _______
                                

 September 5, 2017.--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. 1843]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Ways and Means, to whom was referred the 
bill (H.R. 1843) 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)................     6
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...........11
VII. EXCHANGES OF LETTERS WITH ADDITIONAL COMMITTEES OF REFERRAL.....14

  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 seizure and 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 ``Restraining Excessive Seizure of Property through the 
Exploitation of Civil Asset Forfeiture Tools Act'' also called 
the ``Clyde-Hirsch-Sowers RESPECT Act,'' H.R. 1843, as reported 
by the Committee on Ways and Means, would limit the Internal 
Revenue Service's 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. It 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 civilly 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 Oversight 
Subcommittee has been investigating the IRS's abuse of its 
civil asset forfeiture authority.
    The Subcommittee found the IRS Criminal Investigation 
Division 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, 
the case 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 case 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. This bill would codify those 
restrictions without an exemption for exceptional 
circumstances. It also would allow asset owners an opportunity 
to contest the IRS's seizure in a court hearing 30 to 60 days 
after the seizure. Further, if an asset owner contests a 
seizure and a court orders that the government give the asset 
owner interest along with the return of the assets, the bill 
would exempt that interest from Federal income tax.

                         C. Legislative History


Background

    H.R. 1843 was introduced on March 30, 2017, and was 
referred to the Committee on Financial Services and the 
Committee on Ways and Means.

Committee action

    The Committee on Ways and Means marked up H.R. 1843, the 
``Restraining Excessive Seizure of Property through the 
Exploitation of Civil Asset Forfeiture Tools Act'' also called 
the ``Clyde-Hirsch-Sowers RESPECT Act,'' on July 13, 2017, 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's 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. 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.\2\
---------------------------------------------------------------------------
    \1\The Bank Secrecy Act, 31 U.S.C. secs. 5311-5332.
    \2\31 U.S.C. sec. 5324(a); 31 U.S.C. sec 5322.
---------------------------------------------------------------------------
    Present law authorizes forfeiture of property involved in 
transactions or attempted transactions\3\ in violation of these 
rules in accordance with the procedures governing civil 
forfeitures in money laundering cases.\4\
---------------------------------------------------------------------------
    \3\31 U.S.C. sec. 5317(c)(2).
    \4\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 Internal Revenue Service 
(``IRS'').\5\ The scope of that delegation of authority was 
expanded subsequently, after enactment of the USA PATRIOT Act 
of 2001,\6\ and includes authority to determine and enforce 
civil penalties.\7\ The IRS administers its delegated authority 
under the BSA through the IRS Small Business/Self-Employed 
Division, with assistance from the IRS Criminal Investigation 
Division (``IRS-CID'').
---------------------------------------------------------------------------
    \5\Treasury Directive 15- (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.
    \6\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. 
    \7\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 related 
criminal action. 31 U.S.C. sec. 5321(b)(2).
---------------------------------------------------------------------------
    If a person prevails in a civil forfeiture proceeding 
involving seizure of currency, the United States is 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.\8\
---------------------------------------------------------------------------
    \8\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-CID issued guidance on how it will conduct seizures 
and forfeitures in its structuring cases.\9\ 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.
---------------------------------------------------------------------------
    \9\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 been informed that persons sometimes 
structure a series of cash transactions, each of which falls 
below $10,000, in order to circumvent the BSA reporting and 
recordkeeping requirements (referred to as ``structuring''). 
Structuring may represent an attempt either to conceal illegal 
cash-generating activities such as the selling of narcotics, or 
to conceal income so as to evade the payment of taxes, for 
example. However, structuring (or attempts to structure) for 
the purpose of evading the BSA reporting and record keeping 
requirements\10\ is subject to both civil and criminal 
penalties.
---------------------------------------------------------------------------
    \10\31 U.S.C. secs. 5313(a), 5324(a).
---------------------------------------------------------------------------
    The Committee has learned of numerous instances in which 
the assets of taxpayers were seized by the IRS in civil asset 
forfeiture actions on the basis of suspected structuring in 
violation of BSA reporting and recordkeeping rules. 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 funds were structured 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

    The Code provides no specific exclusion from gross income 
(or deduction from adjusted gross income) for interest received 
by a successful litigant 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 received from the Federal 
government on wrongly seized property 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. 1843, the ``Restraining Excessive Seizure 
of Property through the Exploitation of Civil Asset Forfeiture 
Tools Act'' also called the ``Clyde-Hirsch-Sowers RESPECT 
Act,'' on July 13, 2017.
    The bill, H.R. 1843, was ordered favorably reported to the 
House of Representatives as amended 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. 1843, as 
reported.
    The bill, as reported, is estimated to reduce Federal 
fiscal year budget receipts by one million dollars for the 
period 2018 through 2027.
    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 21, 2017.
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. 1843, the 
Restraining Excessive Seizure of Property Through the 
Exploitation of Civil Asset Forfeiture Tools Act.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Peter 
Huether and Matthew Pickford.
            Sincerely,
                                             Mark P. Hadley
                                        (For Keith Hall, Director).
    Enclosure.

H.R. 1843--Restraining Excessive Seizure of Property Through the 
        Exploitation of Civil Asset Forfeiture Tools Act

    H.R. 1843 would prohibit the Internal Revenue Service (IRS) 
from seizing money and other property from people in certain 
cases that involve the structuring of financial transactions. 
Current law requires that banks and other financial 
institutions report to the Department of the Treasury any 
transaction of more than $10,000. It is illegal for individuals 
to separate a transaction into multiple pieces, each below 
$10,000, to avoid such reporting, a process known as 
structuring. Violators are subject to both civil and criminal 
penalties. The bill would permit the IRS to seize money and 
other property in structuring cases only when the structuring 
was connected to a crime.
    The bill would also require the IRS to attempt to provide 
notice to property owners within 30 days of a structuring-
related seizure informing them of their rights provided under 
the legislation; such rights would include a return of the 
property under certain new conditions. H.R. 1843 would also 
modify the Internal Revenue Code to exempt from federal income 
tax any interest that the Treasury pays on seized funds that 
are returned. The provisions of H.R. 1843 would be effective on 
the date of enactment.
    The staff of the Joint Committee on Taxation (JCT) 
estimates that enacting the legislation would reduce revenues 
by $1 million over the 2018-2027 period. Further, enacting H.R. 
1843 could decrease the collection of civil and criminal 
penalties. Those fines are revenues. Criminal fines are 
available to be spent without further appropriations. 
Therefore, enacting the legislation could decrease such federal 
revenues and associated direct spending, but CBO expects any 
such decreases would not be significant in any year. Because 
enacting the bill would affect direct spending and revenue, 
pay-as-you-go procedures apply.
    In addition, based on information from the Department of 
Treasury and the IRS, CBO estimates that implementing the 
legislation would have no significant effect on spending 
subject to appropriation over the next five years because most 
provisions would codify existing IRS policy and practice.
    CBO and JCT have determined that the bill contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act.
    The CBO staff contacts for this estimate are Peter Huether 
and Matthew Pickford. The estimate was approved by John 
McClelland, Assistant Director for Tax Analysis, and Theresa 
Gullo, Assistant Director for Budget Analysis.

     V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE


          A. Committee Oversight Findings and Recommendations

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, 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 into 
the description 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(c)(5) of rule XIII of the Rules 
of the House of Representatives, 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 section 6104 of 
title 31, United States Code.

                 H. Disclosure of Directed Rule Makings

    In compliance with Sec. 3(i) of H. Res. 5 (115th Congress), 
the following statement is made concerning directed rule 
makings: The Committee advises 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

    In compliance with clause 3(e) 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, new 
matter is printed in italics, and 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) 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, new 
matter is printed in italic, 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

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SUBCHAPTER II--RECORDS AND REPORTS ON MONETARY INSTRUMENTS TRANSACTIONS

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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 seizure 
                                and 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.

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                     INTERNAL REVENUE CODE OF 1986



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Subtitle A--Income Taxes

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CHAPTER 1--NORMAL TAXES AND SURTAXES

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Subchapter B--Computation of Taxable Income

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        PART III--ITEMS SPECIFICALLY EXCLUDED FROM GROSS INCOME

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Sec. 139G. Interest received in action to recover property seized by the 
          Internal Revenue Service based on structuring transaction.

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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.

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    VII. EXCHANGES OF LETTERS WITH ADDITIONAL COMMITTEES OF REFERRAL
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]