Restricting Immediate Sale of Seized Property By Secretary of the Treasury to Perishable Goods

Floor Speech

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Ms. JENKINS of Kansas. 5446, currently under consideration.

Mr. Speaker, as most of us are aware, the IRS has the ability to seize and sell a taxpayer's property to satisfy unpaid taxes.

However, given the profound impact of such a move on the taxpayer's livelihood, well-defined safeguards govern these seizures.

Nonetheless, the Ways and Means Oversight Subcommittee discovered last year that there are ways for the IRS to legally circumvent these protections.

While IRS auctions typically require a 10-day advance notice and the establishment of minimum bid requirements to ensure profits sufficient to cover the unpaid taxes, the IRS can forego these requirements by deeming seized goods as perishable.

Under current law, perishable goods are defined as those that are likely to go bad, become greatly reduced in price or value by keeping, or cannot be kept without great expense to the IRS.

If the IRS deems the goods seized to be perishable, it can sell them on the same day without any minimum bid requirements. This streamlined process can lead to seized goods being sold for significantly less than a normal auction would allow.

H.R. 5446, the bill before us, puts in place much-needed safeguards on the same-day seizure and sale of a taxpayer's property.

While we are discussing this bill today, I would like to talk a little bit about the Oversight Subcommittee's findings that led us to this point.

Last year, the subcommittee first became aware of this issue after local news reports from Dallas, Texas, brought to light the 2015 seizure of a bridal shop, including dresses and sewing machines.

These goods were then sold immediately at auction within hours of their seizure. This left the owners with no means of earning an income going forward, while not fully satisfying their tax debts.

Now, common sense would tell us that this sale was not in the best interest of the couple, whose livelihood was ruined, or the IRS, who did not fully collect the amount owed.

Further investigation by the subcommittee also found that there were at least eight other instances of small businesses being liquidated using the perishable goods designation in the past few years.

In only two of the cases did there appear to be any foods offered as part of the sale.

The subcommittee concluded that while the IRS' use of this authority is limited, when it is used, the goods sold under this designation are typically the contents of a small business and are almost never in danger of immediately going bad.

To give you an idea of what I am talking about, the IRS designated things such as sporting goods, artwork, scrapbooking materials, automotive supplies, and workout equipment as perishable.

Now, I don't know about you, but when I think of things that are likely to go bad, I think of things that we produce in my home State of Kansas, like meat or dairy products.

As a result, this commonsense bipartisan bill limits the IRS' ability to seize and immediately sell a taxpayer's property to only cases where the seized goods are actually likely to go bad.

I would like to thank the bill's sponsors, Congressman Ferguson and Congressman Crowley, for all of their hard work on this issue.

Mr. Speaker, I want to again thank Congressman Drew Ferguson and Congressman Joe Crowley for their leadership on this issue.

H.R. 5446 further strengthens the safeguards in place to ensure that goods being sold immediately are limited to those that are likely to go bad.

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