Short title

This Act may be cited as the

Clyde-Hirsch-Sowers RESPECT Act

or the

Restraining Excessive Seizure of Property through the Exploitation of Civil asset forfeiture Tools Act

Internal Revenue Service seizure requirements with respect to structuring transactions

Section 5317(c)(2) of title 31, United States Code, is amended— (1)by striking Any property and inserting the following:

(A)

In general

Any property

; and

(2)by adding at the end the following:

(B)

Internal Revenue Service seizure requirements with respect to structuring transactions

(i)

Property derived from an illegal source

Property may only be seized by the Internal Revenue Service pursuant to subparagraph (A) by reason of a claimed violation of section 5324 if the property to be seized was derived from an illegal source or the funds were structured for the purpose of concealing the violation of a criminal law or regulation other than section 5324. (ii)

Notice

Not later than 30 days after property is seized by the Internal Revenue Service pursuant to subparagraph (A), the Internal Revenue Service shall— (I)make a good faith effort to find all persons with an ownership interest in such property; and (II)provide each such person with a notice of the seizure and of the person’s rights under clause (iv). (iii)

Extension of notice under certain circumstances

The Internal Revenue Service may apply to a court of competent jurisdiction for one 30-day extension of the notice requirement under clause (ii) if the Internal Revenue Service can establish probable cause of an imminent threat to national security or personal safety necessitating such extension. (iv)

Post-seizure hearing

If a person with a property interest in property seized pursuant to subparagraph (A) by the Internal Revenue Service requests a hearing by a court of competent jurisdiction within 30 days after the date on which notice is provided under subclause (ii), such property shall be returned unless the court holds an adversarial hearing and finds within 30 days of such request (or such longer period as the court may provide, but only on request of an interested party) that there is probable cause to believe that there is a violation of section 5324 involving such property and probable cause to believe that the property to be seized was derived from an illegal source or the funds were structured for the purpose of concealing the violation of a criminal law or regulation other than section 5324.

Exclusion of interest received in action to recover property seized by the Internal Revenue Service based on structuring transaction

(a)

In general

Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting before section 140 the following new section:

139H.

Interest received in action to recover property seized by the Internal Revenue Service based on structuring transaction

Gross income shall not include any interest received from the Federal Government in connection with an action to recover property seized by the Internal Revenue Service pursuant to section 5317(c)(2) of title 31, United States Code, by reason of a claimed violation of section 5324 of such title.

(b)

Clerical amendment

The table of sections for part III of subchapter B of chapter 1 of such Code is amended by inserting before the item relating to section 140 the following new item:

Sec. 139H. Interest received in action to recover property seized by the Internal Revenue Service based on structuring transaction.

(c)

Effective date

The amendments made by this section shall apply to interest received on or after the date of the enactment of this Act.