B-132320, AUG. 1, 1957

B-132320: Aug 1, 1957

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THE RECORD SHOWS THAT THE TRUCK WAS SEIZED BY THE INTERNAL REVENUE SERVICE ON JUNE 13. WAS ALLOWED BY THE SECRETARY OF THE TREASURY UNDER CERTAIN TERMS AND CONDITIONS AND YOU WERE SO NOTIFIED BY LETTER DATED DECEMBER 5. THE TRUCK WAS SOLD AT PUBLIC AUCTION ON JANUARY 25. FOR $250 AND THE STORAGE CHARGES AND COSTS INCURRED IN CONNECTION WITH THE SEIZURE AND SALE ARE REPORTED AS AMOUNTING TO $123.51. WERE ADVISED THAT THE BALANCE PRESENTLY DUE ON YOUR LIEN "AS TO THIS VEHICLE IS $78.16.'. HE ALSO RECOMMENDED THAT YOUR CLAIM BE REJECTED SINCE THE COSTS INCURRED IN THE SEIZURE AND FORFEITURE ($123.51) WERE IN EXCESS OF THE AMOUNT OF YOUR RECOGNIZED LIEN ($78.16). YOU SAY IN YOUR LETTER OF JUNE 17 THAT AT THE TIME THE VEHICLE WAS SOLD YOUR LIEN WAS $200.24 BUT THAT SINCE THAT TIME THE CUSTOMER HAS PAID MONTHLY INSTALLMENTS SO THAT THE BALANCE IS $78.16.

B-132320, AUG. 1, 1957

TO GENERAL MOTORS ACCEPTANCE CORPORATION:

YOUR LETTERS OF JUNE 17 AND JULY 16, 1957, REQUEST, IN EFFECT, RECONSIDERATION OF OUR SETTLEMENT OF JUNE 13, 1957, WHICH DISALLOWED YOUR CLAIM FOR $78.16 REPRESENTING THE AMOUNT OF YOUR LIEN ON AN INTERNATIONAL PICKUP TRUCK, MOTOR NO. SD-220208674, OKLAHOMA N-1858, 1953.

THE RECORD SHOWS THAT THE TRUCK WAS SEIZED BY THE INTERNAL REVENUE SERVICE ON JUNE 13, 1956. YOUR PETITION FOR REMISSION OR MITIGATION OF THE FORFEITURE UNDER SECTION 7327, INTERNAL REVENUE CODE OF 1954, 68A STAT. 871, WAS ALLOWED BY THE SECRETARY OF THE TREASURY UNDER CERTAIN TERMS AND CONDITIONS AND YOU WERE SO NOTIFIED BY LETTER DATED DECEMBER 5, 1956, FROM THE ASSISTANT REGIONAL COMMISSIONER, ALCOHOL AND TOBACCO TAX. THE TRUCK WAS SOLD AT PUBLIC AUCTION ON JANUARY 25, 1957, FOR $250 AND THE STORAGE CHARGES AND COSTS INCURRED IN CONNECTION WITH THE SEIZURE AND SALE ARE REPORTED AS AMOUNTING TO $123.51.

ON DECEMBER 21, 1956, YOU FILED CLAIM HERE FOR PAYMENT OF "OUR RECOGNIZED LIEN IN THE AMOUNT OF $200.24.' WE REQUESTED A REPORT IN THE MATTER FROM THE INTERNAL REVENUE SERVICE AND BY LETTER DATED MAY 1, 1957, FROM THE DIRECTOR, ALCOHOL AND TOBACCO TAX DIVISION, WERE ADVISED THAT THE BALANCE PRESENTLY DUE ON YOUR LIEN "AS TO THIS VEHICLE IS $78.16.' HE ALSO RECOMMENDED THAT YOUR CLAIM BE REJECTED SINCE THE COSTS INCURRED IN THE SEIZURE AND FORFEITURE ($123.51) WERE IN EXCESS OF THE AMOUNT OF YOUR RECOGNIZED LIEN ($78.16). ACCORDINGLY, WE DISALLOWED YOUR CLAIM.

YOU SAY IN YOUR LETTER OF JUNE 17 THAT AT THE TIME THE VEHICLE WAS SOLD YOUR LIEN WAS $200.24 BUT THAT SINCE THAT TIME THE CUSTOMER HAS PAID MONTHLY INSTALLMENTS SO THAT THE BALANCE IS $78.16, AND THAT THE CUSTOMER IS NO LONGER MAKING PAYMENTS. YOU ALSO SAY THAT BECAUSE YOU WANTED ONLY THE AMOUNT DUE, YOU NOTIFIED US OF THE DECLINING BALANCE AND THAT ON FEBRUARY 11 AND APRIL 11 YOU FURNISHED OUR LOCAL AGENT, MR. FRED HALL, WITH A CORRECTED BALANCE OF YOUR LIEN. YOUR LETTER CONTINUES:

"THERE ARE TWO MAIN REASONS WHY WE FEEL OUR CLAIM SHOULD BE ALLOWED. ONE IS THAT OUR ORIGINAL CLAIM WAS MORE THAN THE CHARGES AGAINST THE VEHICLE. YOU WERE FURNISHED WITH A CORRECTED BALANCE ONLY BECAUSE WE VOLUNTEERED THIS INFORMATION AND IT NOW APPEARS THAT WE SHOULD NOT HAVE BEEN SO GENEROUS IN OUR HANDLING.

"THE SECOND REASON IS THAT EVEN THOUGH OUR BALANCE WAS BEING DECREASED IT WOULD HAVE BEEN GREATER THAN THE CHARGES IF THIS SETTLEMENT HAD BEEN MADE WITHIN TWO MONTHS, WHICH SHOULD HAVE BEEN AMPLE TIME. WE WOULD LIKE TO POINT OUT THAT IT HAS BEEN FOUR AND ONE HALF MONTHS SINCE THIS VEHICLE WAS SOLD.'

IN YOUR LETTER OF JULY 16 YOU CONTEND THAT SINCE THE TRUCK WAS SOLD FOR $250 AND THE COST AND CHARGES WERE $123.51 THERE WAS A SURPLUS OF $126.49 OUT OF WHICH YOUR CLAIM ($78.16) SHOULD BE PAID. YOU SAY THAT THIS IS IN CONFORMITY WITH THE RULING OF THE TREASURY DEPARTMENT IN THE ABOVE REFERRED-TO LETTER OF DECEMBER 5, 1956. IN OTHER WORDS YOU QUESTION WHETHER COSTS INCURRED IN THE SEIZURE AND FORFEITURE OF THE VEHICLE SHOULD BE DEDUCTED FROM AMOUNTS FOUND TO BE DUE YOUR COMPANY ON ACCOUNT OF A LIEN HELD ON THE VEHICLE OR WHETHER SUCH COSTS SHOULD FIRST BE ABSORBED FROM THE EXCESS, IF ANY, OF THE SELLING PRICE OF THE VEHICLE OVER THE AMOUNT OF THE LIEN.

FIRST, WE SHOULD LIKE TO POINT OUT THAT MR. FRED HALL IS AN EMPLOYEE OF THE INTERNAL REVENUE SERVICE RATHER THAN THE GENERAL ACCOUNTING OFFICE. CONCERNING THE OTHER CONTENTIONS RAISED IN YOUR LETTER OF JUNE 17, 19 U.S.C. 1618, WHICH IS MADE APPLICABLE TO REMISSION OR MITIGATION OF FORFEITURE UNDER INTERNAL REVENUE LAWS BY SECTION 7327, INTERNAL REVENUE CODE OF 1954, PROVIDES THAT THE SECRETARY OF THE TREASURY MAY REMIT OR MITIGATE FORFEITURES "UPON SUCH TERMS AND CONDITIONS AS HE DEEMS REASONABLE AND JUST.' SECTION "A" OF THE TERMS AND CONDITIONS OF THE ALLOWANCE OF YOUR PETITION FOR THE REMISSION OR MITIGATION OF THE FORFEITURE PROVIDES THAT YOUR ,LIEN IS RECOGNIZED IN THE AMOUNT OF $321.34, OR IF SUCH AMOUNT HAS BEEN FURTHER REDUCED, IN THE AMOUNT DUE AT THE TIME OF ACTION UNDER THE TERMS OF EITHER (B) OR (C) HEREOF.' SECTION "A" ALSO REQUIRES THE AMOUNT OF THE CLAIM "WHETHER IT BE $321.34, OR A LESSER AMOUNT, TO BE EVIDENCED BY A SWORN CERTIFICATE OF CLAIM TO BE FILED WITH THE ASSISTANT REGIONAL COMMISSIONER.' ON APRIL 11, 1957, A REPRESENTATIVE OF THE ALCOHOL AND TOBACCO TAX DIVISION REQUESTED YOU TO FURNISH A CERTIFICATE SETTING FORTH THE PRESENT BALANCE DUE YOU ON THE TRUCK, AND BY NOTARIZED LETTER OF THE SAME DATE TO THAT DIVISION YOU CERTIFIED THE BALANCE DUE WAS $78.16. THAT YOUR LIEN WAS ADMINISTRATIVELY RECOGNIZED BY THE TREASURY DEPARTMENT IN THIS LATTER AMOUNT IS CLEAR FROM THE REPORT DATED MAY 1, 1957, TO US, FROM THE DIRECTOR, ALCOHOL AND TOBACCO TAX DIVISION. THEREFORE, WE WOULD HAVE NO AUTHORITY TO RECOGNIZE YOUR LIEN IN ANY GREATER AMOUNT.

WHILE YOU CONTEND THAT WE WERE FURNISHED WITH A CORRECTED BALANCE OF YOUR LIEN ONLY BECAUSE YOU VOLUNTEERED THIS INFORMATION, IT IS CLEAR FROM THE PRECEDING PARAGRAPH THAT YOU NOT ONLY WERE REQUESTED BUT UNDER SECTION "A" OF THE "ALLOWANCE" OF YOUR PETITION WERE REQUIRED TO DO SO. ALSO, IN CONNECTION WITH THE TIME REQUIRED FOR SETTLEMENT OF YOUR CLAIM WE NOTE THAT IF SETTLEMENT HAD BEEN MADE ON APRIL 11, 1957 (AND POSSIBLY AT AN EVEN EARLIER DATE), YOU WOULD HAVE BEEN ENTITLED TO NOTHING, SINCE THE COSTS OF SALE EXCEEDED THE AMOUNT OF YOUR LIEN ON THAT DATE.

CONCERNING THE CONTENTION RAISED IN YOUR LETTER OF JULY 16, APPARENTLY YOU TAKE THE POSITION THAT SINCE THE PROCEEDS FROM THE SALE OF THE TRUCK EXCEEDED THE AMOUNT OF YOUR LIEN THE STORAGE CHARGES AND ADVERTISING COSTS SHOULD BE DEDUCTED FROM SUCH EXCESS. THE TERMS AND CONDITIONS UNDER WHICH YOUR LIEN WAS RECOGNIZED PROVIDE FOR THE PAYMENT OF YOUR LIEN OUT OF THE PROCEEDS OF SALE "LESS ALL COSTS AND/OR CHARGES.' SINCE, AS INDICATED ABOVE, THE SECRETARY OF THE TREASURY, UNDER APPLICABLE LAWS, MAY REMIT OR MITIGATE FORFEITURE UNDER SUCH TERMS AND CONDITIONS AS HE DEEMS ADVISABLE SUCH TERMS AND CONDITIONS ARE BINDING ON US. REGULATIONS PROMULGATED BY THE SECRETARY AND IN EFFECT AT THE TIME THE VEHICLE WAS SEIZED PROVIDED IN CASE OF A PETITION FOR REMISSION OR MITIGATION OF FORFEITURES THAT THE PETITION SHOULD CONTAIN AN UNDERTAKING BY THE PETITIONER TO PAY ALL COSTS AND EXPENSES INCURRED IN SEIZING AND STORING THE VEHICLE. 26 C.F.R. 171.131 (H). THE REGULATIONS FURTHER PROVIDED THAT IF THE PETITIONER ELECTS NOT TO TAKE THE PROPERTY HE MAY FILE CLAIM IN WHICH EVENT THE LIEN MAY BE PAID OUT OF THE PROCEEDS OF THE SALE LESS ALL COSTS AND STORAGE CHARGES. IT THUS IS CLEAR THAT YOUR POSITION IS NOT IN ACCORD WITH THE TERMS AND CONDITIONS ON WHICH YOUR LIEN WAS ADMINISTRATIVELY RECOGNIZED. NEITHER IS IT IN ACCORD WITH APPLICABLE REGULATIONS.

IN EFFECTING SETTLEMENT OF YOUR CLAIM WE ACTED IN ACCORDANCE WITH THE EXPLICIT TERMS AND CONDITIONS OF THE ADMINISTRATIVE ALLOWANCE OF YOUR PETITION WHICH ALLOWANCE PROVIDED THAT ALL STORAGE CHARGES AND OTHER COSTS SHOULD BE DEDUCTED FROM YOUR RECOGNIZED LIEN. SINCE YOUR RECOGNIZED LIEN WAS $78.16 AND THE COSTS AND CHARGES TOTALED $123.51 THERE IS NOTHING TO BE PAID YOUR COMPANY.

IN VIEW OF THE FOREGOING COMMENTS, THE ACTION TAKEN BY US IN THE SETTLEMENT OF YOUR LIEN CLAIM ON THE VEHICLE IN QUESTION WAS PROPER AND IS SUSTAINED.