A-22663, JUNE 2, 1928, 7 COMP. GEN. 768

A-22663: Jun 2, 1928

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APPROPRIATIONS - STORAGE CHARGES ON VEHICLES SEIZED AND SOLD UNDER INTERNAL-REVENUE LAWS THE APPROPRIATION MADE FOR THE ENFORCEMENT OF THE NARCOTIC AND NATIONAL PROHIBITION ACTS IS NOT AVAILABLE FOR THE PAYMENT OF STORAGE CHARGES ON AUTOMOBILES SEIZED BY THE PROHIBITION SERVICE IN THE ENFORCEMENT OF INTERNAL REVENUE LAWS AND SOLD UNDER SECTION 3460. THE STORAGE CHARGES IN SUCH CASES ARE PAYABLE FROM THE APPROPRIATION FOR COLLECTING THE INTERNAL REVENUE MADE IN SPECIFIC TERMS FOR THE PAYMENT OF EXPENSES OF SEIZURE AND SALE. 1928: THERE ARE FOR CONSIDERATION BY THIS OFFICE SEVERAL CLAIMS OF IVAN A. SUCH CLAIMS AGGREGATING $606.50 WERE ORIGINALLY SUBMITTED FOR DIRECT SETTLEMENT. " FOR THE REASON THAT THE VEHICLES WERE SEIZED AND SOLD UNDER INTERNAL REVENUE LAWS.

A-22663, JUNE 2, 1928, 7 COMP. GEN. 768

APPROPRIATIONS - STORAGE CHARGES ON VEHICLES SEIZED AND SOLD UNDER INTERNAL-REVENUE LAWS THE APPROPRIATION MADE FOR THE ENFORCEMENT OF THE NARCOTIC AND NATIONAL PROHIBITION ACTS IS NOT AVAILABLE FOR THE PAYMENT OF STORAGE CHARGES ON AUTOMOBILES SEIZED BY THE PROHIBITION SERVICE IN THE ENFORCEMENT OF INTERNAL REVENUE LAWS AND SOLD UNDER SECTION 3460, REVISED STATUTES. THE STORAGE CHARGES IN SUCH CASES ARE PAYABLE FROM THE APPROPRIATION FOR COLLECTING THE INTERNAL REVENUE MADE IN SPECIFIC TERMS FOR THE PAYMENT OF EXPENSES OF SEIZURE AND SALE.

COMPTROLLER GENERAL MCCARL TO THE SECRETARY OF THE TREASURY, JUNE 2, 1928:

THERE ARE FOR CONSIDERATION BY THIS OFFICE SEVERAL CLAIMS OF IVAN A. WILLIAMS, LAKE WORTH, LA., FOR STORAGE CHARGES ON AUTOMOBILES SEIZED AND SOLD BY THE UNITED STATES PROHIBITION SERVICE. SUCH CLAIMS AGGREGATING $606.50 WERE ORIGINALLY SUBMITTED FOR DIRECT SETTLEMENT, PAYABLE UNDER THE APPROPRIATION "ENFORCEMENT OF NARCOTIC AND NATIONAL PROHIBITION ACTS," BUT IN REPLY TO REQUESTS BY THIS OFFICE FOR ADDITIONAL INFORMATION IN THE MATTER THE ACTING DEPUTY COMMISSIONER OF PROHIBITION BY REPORT DATED APRIL 10, 1928, RECOMMENDED THAT PAYMENT BE MADE UNDER THE APPROPRIATION "COLLECTING INTERNAL REVENUE," FOR THE REASON THAT THE VEHICLES WERE SEIZED AND SOLD UNDER INTERNAL REVENUE LAWS, VIZ, SECTIONS 3450 AND 3460, REVISED STATUTES. THERE IS THUS FOR CONSIDERATION THE QUESTION AS TO THE APPROPRIATION PROPERLY CHARGEABLE WITH THE STORAGE CHARGES IN QUESTION.

IN THE REPORT OF THE DEPUTY COMMISSIONER OF PROHIBITION IT IS STATED THAT THE SEIZURE OF THE VEHICLES WAS MADE UNDER SECTION 3450, REVISED STATUTES, BY PROHIBITION AGENTS ACTING IN THEIR CAPACITY AS SUCH UNDER A COMMISSION WHICH AUTHORIZES THEM GENERALLY TO ENFORCE THE NATIONAL PROHIBITION LAWS, AND ALL OTHER LAWS OF THE UNITED STATES RELATING TO THE MANUFACTURE, SALE, TRANSPORTATION, CONTROL, AND TAXATION OF INTOXICATING LIQUORS; THAT SUCH VEHICLES WERE NOT TURNED OVER TO THE UNITED STATES MARSHAL AT ANY TIME, BUT WERE SOLD AND DISPOSED OF UNDER THE PROVISIONS OF SECTION 3460, REVISED STATUTES, BY THE PROHIBITION ADMINISTRATOR AT SAVANNAH, GA., WHO DEPOSITED THE PROCEEDS OF THE SALE OF SUCH VEHICLES, WITHOUT DEDUCTION, TO THE CREDIT OF THE TREASURER OF THE UNITED STATES AS "MISCELLANEOUS RECEIPTS; " AND THAT SINCE THE AUTOMOBILES WERE SEIZED AND DISPOSED OF UNDER INTERNAL REVENUE LAWS THE APPROPRIATION FOR COLLECTING INTERNAL REVENUE PROVIDING SPECIFICALLY FOR "EXPENSES OF SEIZURE AND SALE" SHOULD BE CHARGED WITH THE STORAGE CHARGES INVOLVED.

IT APPEARS THAT, PURSUANT TO THE PROVISIONS OF THE ACT OF MARCH 3, 1927, 44 STAT. 1382, CREATING THE BUREAU OF PROHIBITION AND AUTHORIZING THE SECRETARY OF THE TREASURY TO CONFER AND IMPOSE UPON THE COMMISSIONER AND EMPLOYEES OF SUCH BUREAU CERTAIN POWERS AND DUTIES FORMERLY UNDER THE BUREAU OF INTERNAL REVENUE, THE SECRETARY OF THE TREASURY UNDER DATE OF APRIL 1, 1927, ISSUED REGULATIONS PROVIDING IN PART AS FOLLOWS:

(2) THERE ARE ALSO HEREBY CONFERRED AND IMPOSED UPON THE COMMISSIONER OF PROHIBITION, SUBJECT TO THE GENERAL SUPERVISION AND DIRECTION OF THE SECRETARY OF THE TREASURY, ALL THE RIGHTS, PRIVILEGES, POWERS, AND DUTIES CONFERRED OR IMPOSED UPON THE COMMISSIONER OF INTERNAL REVENUE (AND WHICH ARE TRANSFERRED TO AND CONFERRED AND IMPOSED UPON THE SECRETARY OF THE TREASURY BY SUBDIVISION (A) OF SECTION 4 OF THE ABOVE ACT OF MARCH 3, 1927) BY ANY LAW, IN SO FAR AS SUCH RIGHTS, PRIVILEGES, POWERS, AND DUTIES RELATE TO---

(A) THE PRODUCTION, CUSTODY, AND SUPERVISION OF DISTILLED SPIRITS, ALCOHOL, WINES, FERMENTED LIQUORS, CEREAL BEVERAGES, DENATURED ALCOHOL, AND OTHER SUCH LIQUORS AND LIQUIDS:

(B) THE ESTABLISHMENT, CONSTRUCTION, OPERATION, CUSTODY, AND SUPERVISION OF DISTILLERIES, INDUSTRIAL-ALCOHOL PLANTS, BONDED WAREHOUSES, DENATURING PLANTS, WINERIES, BONDED WINE STOREROOMS, BREWERIES, RECTIFYING HOUSES, DEALCOHOLIZING PLANTS, CEREAL BEVERAGE PLANTS, AND OTHER PLACES AT WHICH SUCH SPIRITS, LIQUORS, OR LIQUIDS ARE PRODUCED OR STORED;

(C) THE DETERMINATION, ASSERTION, AND COMPROMISE OF LIABILITY FOR AND THE INSTITUTION AND COMPROMISE OF SUITS FOR THE RECOVERY OF, INTERNAL-REVENUE TAXES AND PENALTIES, BUT ONLY IN CASE A VIOLATION OF LAW RELATING TO THE ENFORCEMENT OF THE EIGHTEENTH AMENDMENT IS INVOLVED, EXCEPT THAT ALL MONEYS SHALL BE RECEIVED AND ACCOUNTED FOR BY THE COLLECTORS OF INTERNAL REVENUE, UNDER THE DIRECTION OF THE COMMISSIONER OF INTERNAL REVENUE;

(D) INQUIRIES AND INVESTIGATIONS RELATING TO THE FILING OF RETURNS FOR OCCUPATIONAL AND COMMODITY TAXES AND PENALTIES IN RESPECT OF INTOXICATING LIQUORS, CEREAL BEVERAGES, AND DENATURED ALCOHOL;

(E) THE SEIZURE, FOR VIOLATION OF THE INTERNAL REVENUE LAWS RELATING TO INTOXICATING LIQUORS, CEREAL BEVERAGES, AND DENATURED ALCOHOL, OF PROPERTY, WHETHER REAL OR PERSONAL (EXCEPT SEIZURE UNDER DISTRAINT WARRANT), AND THE CUSTODY, CONTROL, SALE, AND DISPOSITION OF PROPERTY SO SEIZED; * * *

THE PROHIBITION SERVICE WAS AUTHORIZED BY THESE REGULATIONS TO ENFORCE CERTAIN LAWS FORMERLY FOR ENFORCEMENT BY THE BUREAU OF INTERNAL REVENUE AND SUCH AUTHORIZATION MUST BE TAKEN AND UNDERSTOOD AS INCLUDING SECTIONS 3450 AND 3460, REVISED STATUTES, IN SO FAR AS THE SEIZURE AND SALE RELATES IN ANY WAY TO INTOXICATING LIQUORS, ETC. SUCH SECTIONS CONTAIN THE FOLLOWING PROVISIONS:

SEC. 3450. WHENEVER ANY GOODS OR COMMODITIES FOR OR IN RESPECT WHEREOF ANY TAX IS OR SHALL BE IMPOSED, OR ANY MATERIALS, UTENSILS, OR VESSELS PROPER OR INTENDED TO BE MADE USE OF FOR OR IN THE MAKING OF SUCH GOODS OR COMMODITIES ARE REMOVED, OR ARE DEPOSITED OR CONCEALED IN ANY PLACE, WITH INTENT TO DEFRAUD THE UNITED STATES OF SUCH TAX, OR ANY PART THEREOF, ALL SUCH GOODS AND COMMODITIES, AND ALL SUCH MATERIALS, UTENSILS, AND VESSELS, RESPECTIVELY, SHALL BE FORFEITED; AND IN EVERY SUCH CASE ALL THE CASKS, VESSELS, CASES, OR OTHER PACKAGES WHATSOEVER, CONTAINING, OR WHICH SHALL HAVE CONTAINED, SUCH GOODS OR COMMODITIES, RESPECTIVELY, AND EVERY VESSEL, BOAT, CART, CARRIAGE, OR OTHER CONVEYANCE WHATSOEVER, AND ALL HORSES OR OTHER ANIMALS, AND ALL THINGS USED IN THE REMOVAL OR FOR THE DEPOSIT OR CONCEALMENT THEREOF, RESPECTIVELY, SHALL BE FORFEITED. * * *

SEC. 3460. IN ALL CASES OF SEIZURE OF ANY GOODS, WARES, OR MERCHANDISE, AS BEING SUBJECT TO FORFEITURE UNDER ANY PROVISION OF THE INTERNAL REVENUE LAWS, WHICH, IN THE OPINION OF THE COLLECTOR OR DEPUTY COLLECTOR MAKING THE SEIZURE, ARE OF THE APPRAISED VALUE OF FIVE HUNDRED DOLLARS OR LESS, THE SAID COLLECTOR OR DEPUTY COLLECTOR SHALL, EXCEPT IN CASES OTHERWISE PROVIDED, PROCEED AS FOLLOWS:

SECOND. IF THE SAID GOODS ARE FOUND BY THE SAID APPRAISERS TO BE OF THE VALUE OF FIVE HUNDRED DOLLARS OR LESS, THE SAID COLLECTOR OR DEPUTY COLLECTOR SHALL PUBLISH A NOTICE, FOR THREE WEEKS, IN SOME NEWSPAPER OF THE DISTRICT WHERE THE SEIZURE WAS MADE, DESCRIBING THE ARTICLES, AND STATING THE TIME, PLACE, AND CAUSE OF THEIR SEIZURE, AND REQUIRING ANY PERSON CLAIMING THEM TO APPEAR AND MAKE SUCH CLAIM WITHIN THIRTY DAYS FROM THE DATE OF THE FIRST PUBLICATION OF SUCH NOTICE.

FOURTH. IF NO CLAIM IS INTERPOSED AND NO BOND IS GIVEN WITHIN THE TIME ABOVE SPECIFIED, THE COLLECTOR OR DEPUTY COLLECTOR, AS THE CASE MAY BE, SHALL GIVE TEN DAYS' NOTICE OF THE SALE OF THE GOODS, WARES, OR MERCHANDISE BY PUBLICATION, AND, AT THE TIME AND PLACE SPECIFIED IN THE NOTICE, SHALL SELL THE ARTICLES SO SEIZED AT PUBLIC AUCTION, AND, AFTER DEDUCTING THE EXPENSE OF APPRAISEMENT AND SALE, HE SHALL DEPOSIT THE PROCEEDS TO THE CREDIT OF THE SECRETARY OF THE TREASURY.

IN AN EFFORT TO FACILITATE THE DISPOSITION OF PROPERTY SEIZED BY THE PROHIBITION SERVICE AND AVOID THE INCURRING OF LARGE BILLS FOR STORAGE CHARGES UPON SUCH VEHICLES, THE COMMISSIONER OF PROHIBITION UNDER DATE OF APRIL 2, 1928, ISSUED A LETTER OF INSTRUCTIONS TO PROHIBITION ADMINISTRATORS AND OTHERS CONCERNED IN WHICH IT IS PROVIDED, AMONG OTHER THINGS, AS FOLLOWS:

IF THE LIQUOR TRANSPORTED HAS NOT BEEN TAX PAID (INITIAL OR DIFFERENTIAL TAX), THE VEHICLE IS FORFEITABLE UNDER SECTION 3450, R.S. IF THE VEHICLE IS UNDER $500 IN VALUE, IT MAY BE ADVERTISED AND SOLD PURSUANT TO THE PROVISIONS OF SECTION 3460, R.S.; OR IF A CLAIMANT APPEARS AND GIVES BOND UNDER LATTER SECTION, THE VEHICLE IS FORFEITABLE, REGARDLESS OF INNOCENT INTERESTS, BY LIBEL PROCEEDINGS INSTITUTED UNDER SECTION 3450, R.S. IN SUCH CASES, THEREFORE, THE PROCEDURE UNDER INTERNAL REVENUE LAWS SHOULD BE ADOPTED, AND IF A PROCEEDING IS PENDING IN COURT UNDER SECTION 26, IN WHICH JUDGMENT HAS NOT BEEN RENDERED, WHEN THE EVENT HAPPENS WHICH MAKES IT IMPOSSIBLE OR IMPRACTICABLE TO FURTHER PROSECUTE THE CASE, THE UNITED STATES ATTORNEY SHOULD BE REQUESTED TO DISMISS THE SAME IN ORDER THAT PROCEEDINGS MAY BE COMMENCED UNDER THE INTERNAL REVENUE LAWS. IN SUCH EVENT, THE MONIES RECEIVED FROM THE SALE OF THE VEHICLE SHOULD BE TURNED INTO THE TREASURY OF THE UNITED STATES WITHOUT PAYMENT OF ANY EXPENSES, WHICH LATTER ARE PAYABLE OUT OF THE APPROPRIATION ENTITLED "COLLECTING THE INTERNAL REVENUE.'

VEHICLES IN WHICH LIQUORS HAVE BEEN DEPOSITED OR CONCEALED, AND IN REGARD TO WHICH THERE IS AVAILABLE NO EVIDENCE OF TRANSPORTATION, CAN NOT BE FORFEITED UNDER THE NATIONAL PROHIBITION ACT BUT MUST BE PROCEEDED AGAINST UNDER EITHER SECTIONS 3450 OR 3460, R.S., AS ABOVE SET OUT.

THE APPROPRIATION MADE FOR THE ENFORCEMENT OF NARCOTIC AND NATIONAL PROHIBITION ACTS IS FOR THE ENFORCEMENT OF SUCH ACTS ONLY, AND IS NOT AVAILABLE FOR THE PAYMENT OF EXPENSES INCURRED IN THE ENFORCEMENT OF INTERNAL REVENUE LAWS. AND SINCE THE PROHIBITION SERVICE HAS BEEN AUTHORIZED TO ENFORCE CERTAIN INTERNAL REVENUE LAWS RELATING TO THE SEIZURE AND SALE OF PROPERTY IN CASES INVOLVING INTOXICATING LIQUORS, CEREAL BEVERAGES, ETC., THE INTERNAL REVENUE APPROPRIATION MADE AVAILABLE FOR SUCH ENFORCEMENT MUST BE CONSIDERED AND HELD AS PROPERLY CHARGEABLE WITH THE EXPENSES OF SUCH ENFORCEMENT AS PROVIDED IN THE REGULATIONS PROMULGATED BY THE COMMISSIONER OF PROHIBITION, SUPRA. AS STATED IN SUCH REGULATIONS, ALSO, CASES INVOLVING SEIZURE OF PROPERTY UNDER SECTION 3450, REVISED STATUTES, OR UNDER OTHER INTERNAL REVENUE LAWS, AND DISPOSAL UNDER SECTION 3460, REVISED STATUTES, SHOULD BE TREATED AND HANDLED ON A DIFFERENT BASIS THAN SEIZURES AND SALES UNDER SECTION 26 OF THE NATIONAL PROHIBITION ACT. UNDER SECTION 26, IN WHICH IT IS PROVIDED THAT THE EXPENSES OF SEIZING, KEEPING, AND SELLING THE PROPERTY SHALL BE PAID FROM THE PROCEEDS OF THE SALE, IT HAS BEEN HELD THAT THERE IS NO AUTHORITY TO INCUR STORAGE CHARGES ON VEHICLES SEIZED THEREUNDER IN AMOUNTS IN EXCESS OF THE VALUE OF THE PROPERTY. 3 COMP. GEN. 348; ID. 682; 6 ID. 666; 7 ID. 443. IN CASES OF SALES UNDER SECTION 3460, REVISED STATUTES, THE PROCEEDS OF THE SALE SHOULD BE COVERED INTO THE TREASURY AS MISCELLANEOUS RECEIPTS, INTERNAL REVENUE COLLECTIONS, WITHOUT ABATEMENT OR DEDUCTION AS PROVIDED IN SECTION 3210, REVISED STATUTES, AS AMENDED BY SECTION 1031 OF THE REVENUE ACT OF JUNE 2, 1924, 43 STAT. 351, AND ANY CHARGES INCIDENT TO THE SEIZURE, STORAGE, AND SALE OF THE PROPERTY SHOULD BE PAID FROM THE APPROPRIATION MADE FOR COLLECTING INTERNAL REVENUE MADE SPECIFICALLY AVAILABLE FOR THE PAYMENT OF EXPENSES OF SEIZURE AND SALE. THE FACT THAT IN SUCH CASES AN APPROPRIATION IS AVAILABLE FOR THE PAYMENT OF SUCH EXPENSES DOES NOT AUTHORIZE INCURRING EXORBITANT STORAGE OR OTHER CHARGES IN CONNECTION WITH THE PROPERTY SEIZED. ATTENTION IN THIS CONNECTION IS INVITED TO THE PROVISIONS OF SECTION 3460, SUPRA, AS TO THE TIME THE PROPERTY IS AUTHORIZED TO BE DISPOSED OF AND DUE DILIGENCE SHOULD BE EXERCISED IN THE MINIMIZING, AS MUCH AS POSSIBLE, OF THE STORAGE AND OTHER CHARGES UPON VEHICLES, OR OTHER PROPERTY PROPERLY FOR DISPOSITION UNDER THAT SECTION.

IN CONNECTION WITH THE INCURRING OF OBLIGATIONS BY THE PROHIBITION SERVICE AGAINST APPROPRIATIONS OF THE INTERNAL REVENUE SERVICE, THERE ARISES THE QUESTION AS TO THE PROCEDURE IN THE ACTUAL PAYMENT OF THE SAME. IT IS UNDERSTOOD THAT AT THE PRESENT TIME THERE ARE NO FUNDS IN THE HANDS OF PROHIBITION ADMINISTRATORS FROM WHICH MAY BE PAID CLAIMS FOR STORAGE CHARGES OR OTHER EXPENSES INCURRED IN CONNECTION WITH THE ENFORCEMENT OF INTERNAL REVENUE LAWS. IT WOULD APPEAR NECESSARY THAT SOME ADMINISTRATIVE ACTION BE TAKEN IN CONNECTION WITH THIS PHASE OF THE MATTER EITHER BY PLACING FUNDS UNDER THE INTERNAL-REVENUE APPROPRIATION TO THE CREDIT OF THE PROHIBITION ADMINISTRATOR, OR BY REQUIRING THAT ALL CLAIMS ORIGINATING IN THE PROHIBITION SERVICE AND INVOLVING A PAYMENT FROM AN INTERNAL REVENUE APPROPRIATION BE FORWARDED TO THE DISBURSING CLERK OF THE TREASURY DEPARTMENT FOR PAYMENT, OR THAT ALL SUCH CLAIMS BE TRANSMITTED TO THIS OFFICE FOR DIRECT SETTLEMENT ACCOMPANIED BY AN ADMINISTRATIVE REPORT AND RECOMMENDATION.

THE CLAIMS OF IVAN A. WILLIAMS, HEREINBEFORE REFERRED TO, WILL BE ALLOWED BY THIS OFFICE IN THE AMOUNT FOUND DUE AND WILL BE CERTIFIED FOR PAYMENT UNDER THE INTERNAL-REVENUE APPROPRIATION WITHOUT FURTHER ADMINISTRATIVE ACTION, BUT IN THE FUTURE CLAIMS OF THIS NATURE FORWARDED HERE FOR DIRECT SETTLEMENT SHOULD BEAR THE APPROVAL AND RECOMMENDATION OF THE SECRETARY OF THE TREASURY, RATHER THAN OF THE BUREAU OF PROHIBITION.