Reading Room Document

Liability of the United States for State and Local Taxes on Seized and Forfeited Property (II)

In civil forfeiture proceedings (under 21 U.S.C. § 881), the United States is obligated to pay liens for state and local taxes accruing after the commission of the offense leading to forfeiture and before the entry of a judicial order of forfeiture, if the lien-holder establishes, before the court enters the order of forfeiture, that it is an innocent owner of the interest it asserts. In criminal forfeiture proceedings (under 18 U.S.C. § 1963 or 21 U.S.C. § 853), the United States may not pay such liens because state and local tax lien-holders are not bona fide purchasers for value of the interests they would assert, and therefore do not come within any applicable exception to a statute that, upon entry of a court's final order of forfeiture, vests full ownership retroactively in the United States as of the date of the offense. The OLC does not provide release dates for its opinions, so the release date listed is the date on which the opinion was authored. The original opinion is available at www.justice.gov/file/20461/download.

October 18, 1993