A-41486, MAY 10, 1932, 11 COMP. GEN. 422

A-41486: May 10, 1932

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DISPOSITION OF LIQUOR OR OTHER PROPERTY SEIZED UNDER THE INTERNAL REVENUE LAWS IF A VIOLATION OF THE NATIONAL PROHIBITION ACT IS INVOLVED. ARE EXPRESSLY LIMITED TO CASES WHERE DISPOSITION OF THE PROPERTY IS MADE UNDER SECTION 3460. SUCH APPROPRIATIONS ARE NOT AVAILABLE FOR THE PAYMENT OF SUCH EXPENSES WHEN COURT PROCEEDINGS ARE REQUIRED AND DISPOSITION OF THE PROPERTY MAY NOT BE MADE ADMINISTRATIVELY UNDER THE PROVISIONS OF SAID SECTION 3460. 1932: REFERENCE IS MADE TO LETTER OF FEBRUARY 23. " BUT QUESTIONING WHETHER SUCH APPROPRIATION IS PROPERLY CHARGEABLE WITH THE EXPENSES INVOLVED. THE LETTER IS AS FOLLOWS: THERE ARE FORWARDED HEREWITH FOR CONSIDERATION AS TO PAYMENT THE FOLLOWING VOUCHERS.

A-41486, MAY 10, 1932, 11 COMP. GEN. 422

APPROPRIATIONS - PROHIBITION ENFORCEMENT - SEIZURES UNDER INTERNAL REVENUE STATUTES APPROPRIATIONS FOR SALARIES AND EXPENSES, BUREAU OF PROHIBITION, PROVIDING FOR PAYMENT THEREUNDER OF COSTS INCURRED IN THE SEIZURE, STORAGE, AND DISPOSITION OF LIQUOR OR OTHER PROPERTY SEIZED UNDER THE INTERNAL REVENUE LAWS IF A VIOLATION OF THE NATIONAL PROHIBITION ACT IS INVOLVED, ARE EXPRESSLY LIMITED TO CASES WHERE DISPOSITION OF THE PROPERTY IS MADE UNDER SECTION 3460, REVISED STATUTES, I.E., WITHOUT INTERVENING COURT PROCEEDINGS. SUCH APPROPRIATIONS ARE NOT AVAILABLE FOR THE PAYMENT OF SUCH EXPENSES WHEN COURT PROCEEDINGS ARE REQUIRED AND DISPOSITION OF THE PROPERTY MAY NOT BE MADE ADMINISTRATIVELY UNDER THE PROVISIONS OF SAID SECTION 3460, REVISED STATUTES, BUT IN SUCH CASES, IF OTHERWISE PROPER, SUCH EXPENSES MAY BE PAID UNDER APPROPRIATIONS FOR SALARIES, FEES, AND EXPENSES OF UNITED STATES MARSHALS.

COMPTROLLER GENERAL MCCARL TO THE ATTORNEY GENERAL, MAY 10, 1932:

REFERENCE IS MADE TO LETTER OF FEBRUARY 23, 1932, FILE PRO. AS-EPW, FROM THE CHIEF, ACCOUNTS AND SUPPLY DIVISION, BUREAU OF PROHIBITION, TRANSMITTING TO THIS OFFICE FOR DIRECT SETTLEMENT FIVE VOUCHERS STATE FOR PAYMENT UNDER THE APPROPRIATION "SALARIES AND EXPENSES, BUREAU OF PROHIBITION, 1932," BUT QUESTIONING WHETHER SUCH APPROPRIATION IS PROPERLY CHARGEABLE WITH THE EXPENSES INVOLVED. THE LETTER IS AS FOLLOWS:

THERE ARE FORWARDED HEREWITH FOR CONSIDERATION AS TO PAYMENT THE FOLLOWING VOUCHERS, COVERING SERVICES RENDERED IN CONNECTION WITH PROPERTY SEIZED UNDER THE PROVISIONS OF SECTION 3453, REVISED STATUTES, PURSUANT TO THE PROVISIONS OF THE INFORMATION HANDED DOWN NOVEMBER 23, 1931, BY THE SUPREME COURT OF THE UNITED STATES IN THE CASE OF THE UNITED STATES VS. EDWARD RYAN.

THOS. F. COLLINS, NEW YORK, N.Y. ------------------------ $ 100.00

DO ------------------------------------------------- 35.00

FRIGIDAIRE SALES CORPORATION, NEW YORK, N.Y. ------------ 3.70

BIANCOLA AND MURRAY, INC., NEW YORK, N.Y. -------------- 20.00

NEW YORK STEAM CORPORATION, NEW YORK, N.Y. -------------- 327.82

IN THIS CONNECTION PARTICULAR ATTENTION IS INVITED TO THE APPROPRIATION, "SALARIES AND EXPENSES, BUREAU OF PROHIBITION, 1932," WHICH READS IN PART AS FOLLOWS:

" * * * INCLUDING SEIZURES MADE UNDER THE INTERNAL REVENUE LAWS IF A VIOLATION OF THE NATIONAL PROHIBITION ACT IS INVOLVED AND DISPOSITION IS MADE UNDER 3460, REVISED STATUTES. (U.S.C., TITLE 26, SECTION 1193) * *

AND TO DECISION OF THE COMPTROLLER GENERAL, DATED JANUARY 8, 1925, THE SYLLABUS OF WHICH READS IN PART AS FOLLOWS:

"WHERE TWO VIOLATORS OF THE NARCOTIC ACT OF DECEMBER 17, 1914, 38 STAT. 785, AS AMENDED, WERE APPREHENDED BY AGENTS OF THE BUREAU OF INTERNAL REVENUE, TRIED AND CONVICTED, AND THEIR VEHICLE SEIZED FOR THE UNLAWFUL REMOVAL AND CONCEALMENT OF UNSTAMPED NARCOTIC DRUGS, THE SEIZURE, FORFEITURE, AND SALE OF SUCH VEHICLE, THOUGH GROWING OUT OF ENFORCEMENT OF THE NARCOTIC ACT, WAS A SEPARATE AND DISTINCT MATTER GIVING RISE TO A PROCEEDING IN REM AGAINST THE OFFENDER, TO WIT, THE VEHICLE UNDER SECTION 3450, REVISED STATUES, AND THE STORAGE CHARGES ON SUCH VEHICLE, PENDING INSTITUTION AND CULMINATION OF ACTION AGAINST THE VEHICLE, ARE CHARGEABLE AGAINST THE APPROPRIATION OF THE DEPARTMENT OF JUSTICE FOR ,SALARIES, FEES, AND EXPENSES OF MARSHALS, UNITED STATES COURTS.'

IN VIEW OF THE FACT THAT THE TEXT OF THE APPROPRIATION FOR THE ENFORCEMENT OF THE NATIONAL PROHIBITION ACT QUOTED HEREIN LIMITS THE PAYMENT OF EXPENSES INCURRED INCIDENT TO SEIZURES UNDER THE INTERNAL REVENUE LAWS, WHERE DISPOSITION IS MADE UNDER SECTION 3460, REVISED STATUTES, AND IN VIEW OF YOUR DECISION REFERRED TO HEREIN REGARDING THE PAYMENT OF EXPENSES INCIDENT TO SEIZURE AND SALE UNDER SECTION 3450, REVISED STATUES, IT WOULD APPEAR THAT THE APPROPRIATION, "SALARIES, FEES, AND EXPENSES OF MARSHALS, U.S. COURTS" IS PROPERLY CHARGEABLE WITH THE EXPENSES INCIDENT TO SEIZURE AND SALE UNDER THE INTERNAL-REVENUE LAWS WHERE DISPOSITION IS MADE OTHER THAN UNDER SECTION 3460, REVISED STATUTES.

AS THERE APPEARS TO BE NO FORMAL DECISION DETERMINING THE PROPER APPROPRIATION AGAINST WHICH THESE EXPENSES ARE CHARGEABLE, THE ABOVE MENTIONED VOUCHERS ARE BEING SUBMITTED FOR CONSIDERATION UNDER THE PROVISIONS OF YOUR REGULATIONS NO. 50.

SECTION 4 OF THE PROHIBITION REORGANIZATION ACT OF MAY 27, 1930, 46 STAT. 428, IMPOSES UPON THE ATTORNEY GENERAL THE DUTY OF MAKING SEIZURES AND THE ENFORCEMENT OF FORFEITURES UNDER THE INTERNAL-REVENUE LAWS IF A VIOLATION OF THE NATIONAL PROHIBITION ACT IS INVOLVED. SECTION 3460, REVISED STATUTES, 26 U.S.C.A. 1193, PROVIDES FOR THE SUMMARY SALE UNDER CERTAIN CONDITIONS AND STIPULATED PROCEDURE, WITHOUT COURT PROCEEDINGS, OF ANY GOODS, WARES, OR MERCHANDISE SEIZED AS BEING SUBJECT TO FORFEITURE UNDER ANY PROVISION OF THE INTERNAL REVENUE LAWS WHERE THE APPRAISED VALUE IS $500 OR LESS AND NO CLAIM IS INTERPOSED AND BOND FURNISHED, AND THE APPROPRIATION FOR THE CURRENT FISCAL YEAR FOR SALARIES AND EXPENSES, BUREAU OF PROHIBITION, ACT OF FEBRUARY 23, 1931, 46 STAT. 1323, PROVIDES FOR PAYMENT OF COSTS INCURRED IN THE SEIZURE, STORAGE, AND DISPOSITION OF LIQUOR AND PROPERTY SEIZED UNDER THE INTERNAL-REVENUE LAWS IF A VIOLATION OF THE NATIONAL PROHIBITION ACT IS INVOLVED "AND DISPOSITION IS MADE UNDER SECTION 3460, REVISED TUTES.' THIS LIMITATION IN THE APPROPRIATION TO PAYMENT OF SUCH EXPENSES THEREUNDER ONLY WHERE DISPOSITION IS MADE UNDER SECTION 3460, REVISED STATUTES, THAT IS, WITHOUT INTERVENING COURT PROCEEDINGS, APPEARS TO BE A LEGISLATIVE RECOGNITION OF THE WELL ESTABLISHED RULE THAT WHERE THERE ARE COURT PROCEEDINGS FOR THE FORFEITURE AND DISPOSITION OF PROPERTY SEIZED UNDER THE INTERNAL REVENUE LAWS NOT SUBJECT TO DISPOSITION UNDER THE PROVISIONS OF SECTION 3460, REVISED STATUTES, THE CONTROL OF THE PROPERTY BY THE COURT RELATES BACK TO THE SEIZURE AND, ACCORDINGLY, THAT EXPENSES IN CONNECTION THEREWITH ARE PAYABLE UNDER APPROPRIATIONS FOR SALARIES, FEES, AND EXPENSES OF UNITED STATES MARSHALS, AND NOT UNDER APPROPRIATIONS FOR THE ADMINISTRATIVE ACTIVITIES MAKING THE SEIZURES. SEE 22 COMP. DEC. 336; 4 COMP. GEN. 594; 7 ID. 649.

SECTION 3453, REVISED STATUTES, PROVIDES:

ALL GOODS, WARES, MERCHANDISE, ARTICLES, OR OBJECTS, ON WHICH TAXES ARE IMPOSED, WHICH SHALL BE FOUND IN THE POSSESSION, OR CUSTODY, OR WITHIN THE CONTROL OF ANY PERSON, FOR THE PURPOSE OF BEING SOLD OR REMOVED BY HIM IN FRAUD OF THE INTERNAL REVENUE LAWS, OR WITH DESIGN TO AVOID PAYMENT OF SAID TAXES, MAY BE SEIZED BY THE COLLECTOR OR DEPUTY COLLECTOR OF THE PROPER DISTRICT, OR BY SUCH OTHER COLLECTOR OR DEPUTY COLLECTOR AS MAY BE SPECIALLY AUTHORIZED BY THE COMMISSIONER OF INTERNAL REVENUE FOR THAT PURPOSE, AND SHALL BE FORFEITED TO THE UNITED STATES. AND ALL RAW MATERIALS FOUND IN THE POSSESSION OF ANY PERSON INTENDING TO MANUFACTURE THE SAME INTO ARTICLES OF A KIND SUBJECT TO TAX FOR THE PURPOSE OF FRAUDULENTLY SELLING SUCH MANUFACTURED ARTICLES, OR WITH DESIGN TO EVADE THE PAYMENT OF SAID TAX; AND ALL TOOLS, IMPLEMENTS, INSTRUMENTS, AND PERSONAL PROPERTY WHATSOEVER, IN THE PLACE OR BUILDING, OR WITHIN ANY YARD OR INCLOSURE WHERE SUCH ARTICLES OR RAW MATERIALS ARE FOUND, MAY ALSO BE SEIZED BY ANY COLLECTOR, OR DEPUTY COLLECTOR AS AFORESAID, AND SHALL BE FORFEITED AS AFORESAID. THE PROCEEDINGS TO ENFORCE SUCH FORFEITURES SHALL BE IN THE NATURE OF A PROCEEDING IN REM IN THE CIRCUIT COURT OR DISTRICT COURT OF THE UNITED STATES FOR THE DISTRICT WHERE SUCH SEIZURE IS MADE.

SEIZURES OF PROPERTY UNDER THIS PROVISION OF THE INTERNAL REVENUE STATUTES APPEAR TO COME CLEARLY WITHIN THE RULE STATES, SEE 22 COMP. DEC. 336, AND, ACCORDINGLY, YOU ARE ADVISED THAT EXPENSES IN CONNECTION THEREWITH, WHERE COURT PROCEEDINGS ARE REQUIRED AND DISPOSITION OF THE PROPERTY MAY NOT BE MADE ADMINISTRATIVELY UNDER THE PROVISIONS OF SAID SECTION 3460, REVISED STATUTES, ARE NOT PROPERLY PAYABLE UNDER APPROPRIATIONS FOR SALARIES AND EXPENSES, BUREAU OF PROHIBITION, BUT, IF OTHERWISE PROPER, MAY BE PAID UNDER APPROPRIATIONS FOR SALARIES, FEES, AND EXPENSES OF UNITED STATES MARSHALS. THE VOUCHERS SUBMITTED WILL BE SETTLED ON THAT BASIS.