[Query Concerning Proper Source of Funds To Pay Settlement in Court Case]

The Internal Revenue Service (IRS), the Department of the Treasury, and the Tax Division of the Department of Justice requested clarification as to the proper source of funds for payment of a monetary settlement which was agreed to be awarded to the owner and lessor of a building for damages incurred as a result of the seizure of the building in order to enforce a lien for delinquent taxes. Because tax judgments are generally paid directly by IRS, the question arose as to whether this settlement should be paid by IRS or, upon certification, from the permanent judgment appropriation which is available only for judgment payments which are not otherwise provided for. The tax refund appropriation is generally reserved for suits of wrongful levy, suits for refund, suits involving the return of seized property, or suits against an individual revenue officer. However, the tax refund appropriation does not authorize the award of money damages incurred in the course of enforcing the Internal Revenue Code. Accordingly, GAO saw no basis to charge the settlement to IRS appropriations. Therefore, the monetary settlement would be properly paid from the permanent judgment appropriation.