Boat-slip sale expense limited to seizure-to-sale period

Number

201411028

Outcome

Advice

Document type

Chief Counsel Advice

IRS subject

Application of Proceeds of Levy, Surplus Proceeds

Topics

Procedure, penalties, and administration

Code sections

§ 6341, § 6342

Ruling dated

October 21, 2013

Publicly released

March 14, 2014

Source

View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2014, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.

About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.

View official IRS release (PDF)

Plain-English summary

Chief Counsel revised earlier advice about fees connected with the sale of a seized boat slip. Under IRC §§ 6341 and 6342, the expense of sale covers fees incurred from the seizure date through the sale date. It does not cover fees from before seizure or after the sale. Although property administrators may exercise judgment about necessary expenditures, that judgment is limited to fees incurred while the Service possesses the seized property.

Ruling snapshot

Question: Which boat-slip management fees qualify as expenses of sale after a levy?
Outcome: Advice given, only seizure-to-sale fees qualify
Key authorities: IRC §§ 6341 and 6342; IRM § 5.10.4.7(4)

Full text (IRS public release)

ID: CCA-102183-13
Office: ----------
UILC: 6342.00-00, 6342.01-00
Number: 201411028
Release Date: 3/14/2014
From: -----------------------
Sent: Monday, October 21, 2013 8:30 AM
To: --------------
Cc: ------------------------------------
Subject: ----------Boat Slip case

--------

Based on our conversation over the phone we would like to alter our advice to say that pursuant to sections 6341 and 6342, the cost of sale expense only covers the fees incurred for the period from the date of the seizure to the date of the sale of the boat slip. The cost of sale does not cover the fees for the period of time before the Service seized the boat slip, as well as it does not cover any fees accrued for the period after the sale of the boat slip.

Although I.R.M. section 5.10.4.7(4) allows PALS to exercise sound judgment when they are identifying the necessary expenditures and determine whether they can be charged as expenses of sale, such exercise of judgment should be limited to determining the fees owed for the period of time the Service is in the possession of the seized property. The same section of the IRM states that “expenses made to preserve the value of the property and prevent wasting may be incurred as an expense of sale”. Again, we believe that such expenses should be limited to expenses incurred for the time the property is within the Service’s possession.

If you have any further questions please do not hesitate to contact me.

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