[Congressional Record Volume 164, Number 62 (Tuesday, April 17, 2018)]
[House]
[Pages H3366-H3367]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
{time} 1345
RESTRICTING IMMEDIATE SALE OF SEIZED PROPERTY BY SECRETARY OF THE
TREASURY TO PERISHABLE GOODS
Ms. JENKINS of Kansas. Mr. Speaker, I move to suspend the rules and
pass the bill (H.R. 5446) to amend the Internal Revenue Code of 1986 to
restrict the immediate sale of seized property by the Secretary of the
Treasury to perishable goods, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 5446
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. RULES FOR SEIZURE AND SALE OF PERISHABLE GOODS
RESTRICTED TO ONLY PERISHABLE GOODS.
(a) In General.--Section 6336 of the Internal Revenue Code
of 1986 is amended by striking ``or become greatly reduced in
price or value by keeping, or that such property cannot be
kept without great expense''.
(b) Effective Date.--The amendment made by this section
shall apply to property seized after the date of the
enactment of this Act.
The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from
Kansas (Ms. Jenkins) and the gentleman from New York (Mr. Crowley) each
will control 20 minutes.
The Chair recognizes the gentlewoman from Kansas.
General Leave
Ms. JENKINS of Kansas. Mr. Speaker, I ask unanimous consent that all
Members may have 5 legislative days within which to revise and extend
their remarks and include extraneous material on H.R. 5446, currently
under consideration.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from Kansas?
There was no objection.
Ms. JENKINS of Kansas. Mr. Speaker, I yield myself such time as I may
consume.
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 urge my colleagues to join me in supporting this
bipartisan bill, and I reserve the balance of my time.
Mr. CROWLEY. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in support of H.R. 5446, and I thank Mr. Ferguson
for working with our office to bring this bill to committee and here to
the floor as well. And I thank the gentlewoman from Kansas (Ms.
Jenkins) for managing the time on this bill. This may be one of the
last things she gets to do here on the House floor, and I just want to
thank her for her friendship throughout the years, as well, and working
in a bipartisan way with us on occasion.
Mr. Speaker, as my colleague mentioned, this is a targeted bill to
address the overzealous enforcement of existing law. These changes are
needed because, as Mr. Ferguson will point out as well, we have found
ourselves in an environment where small-business owners have seen their
property and products taken and sold within 24 hours.
Take, for example, as was mentioned by Ms. Jenkins, the 2015 IRS raid
of Mii's Bridal and Tuxedo shop in Garland, Texas. Claiming the owners
owed back taxes, the IRS agents seized $17,000 in cash and $650,000 in
wedding dresses and equipment, like sewing machines. The agents then
immediately auctioned off those items, even though their tax dispute
was not settled and has not been contested.
The agency argued the expedited procedures were needed because they
said the dresses, as was mentioned, were perishable goods. These were
not oranges or grapefruits, they were not apples or eggs, they were
dresses.
By invoking the word ``perishable,'' the IRS didn't have to post
advance public notice of the auction or wait at least 10 days for
sunlight to come in before selling the goods, as is normally required.
To say this is wrong is an understatement. Clothing, as we all know,
is not really perishable. It will decay over time and when it is worn,
but left to its own, it doesn't decay. It is not perishable.
And destroying an immigrant-owned business--an immigrant-owned
business--within hours, that took decades to build, should never have
happened in the first place.
How the IRS used civil asset forfeiture in this case goes against a
bedrock principle of our country, of the
[[Page H3367]]
United States--the principle of due process.
In this case, the IRS acted without proper notice and outside the
intent of the law. They seized property and sold it without knowing its
true cost or its value.
Civil asset forfeiture is a tool that the IRS and other law
enforcement agencies use to go after ill-gotten funds from human
traffickers, terrorists, and other serious criminal activity.
Sometimes it is a necessary mechanism. I think we all recognize that.
But only when used correctly and fairly.
Seizing the goods of a small immigrant-owned business and selling
them immediately at auction under the false premise that they were
perishable goods is a clear example of how the law should not be used.
Passage of this measure will ensure that abuses like this never
happen again. I urge swift passage of this bill to help us take at
least some steps to address the abusive flaws in the civil asset
forfeiture procedure and give at least this one company some modicum of
justice.
Mr. Speaker, I reserve the balance of my time.
Ms. JENKINS of Kansas. Mr. Speaker, I yield 5 minutes to the
gentleman from Georgia (Mr. Ferguson), one of the leaders on this
issue.
Mr. FERGUSON. Mr. Speaker, I rise today in support of H.R. 5446. This
commonsense legislation makes a targeted but important reform to
protect American small businesses by ensuring that the rules for
seizure of perishable goods are restricted only to goods that are, in
fact, perishable.
The fact that we are having to even comment or debate on the fact
that a small business in Texas was destroyed by the actions of an IRS
agent that determined that bridal dresses were perishable is
unconscionable, and it should not happen, and it should not have
happened then; and I agree with my colleague from New York that it
should never happen again, and this legislation will help ensure that.
Now, I don't think we have to explain to anybody that, since these
bridal gowns are not perishable, why is this bill even necessary? But
it is a shame that we have had agents use this particular piece of
legislation to actually leave a family destitute because of their
actions of selling bridal dresses under the guise that they were
perishable.
This legislation tightens up the law to eliminate the language that
the IRS agents in Dallas and others across the country have used to
justify their overreaching use of same-day sale provisions. H.R. 5446
makes an important step to prevent the IRS from redefining these words
to suit their own purposes, threatening the livelihoods of American
small businesses.
Mr. Speaker, I am proud to sponsor this legislation to strength
protections for small businesses and job creators, and I encourage my
colleagues to vote ``yes'' and do the same.
Mr. CROWLEY. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, once again, let me thank Mr. Ferguson, as well as Ms.
Jenkins, for bringing this bill to the floor.
I don't want anyone who may be watching this on C-SPAN and may be
just waking up, turning on the television, and looking at the
incredible bipartisanship that is happening here today to think they
died and have gone to bipartisan heaven.
Although much of the work that we are doing today is bipartisan in
nature, it really is drastically different than the way in which the
Committee on Ways and Means has conducted business in the most recent
past in connection with the passage of the Republican tax bill.
Democrats have called that a tax scam bill.
It had absolutely no input from the Democratic side of the aisle,
certainly here in the House of Representatives, in the committee, or
here on the floor. Not reflective of any of the Democratic principles
or values in that bill and its passage.
And as much as we are working in a very bipartisan way, this is not a
reflection of my good friend Ms. Jenkins, but more a reflection, I
think, of the leadership of the Republican Conference in ramming a bill
through the committee without proper hearings. Not having a single
Democratic amendment in that process spoke very ill of the process
itself.
Nobody cares about how sausage gets made. We know that. Nobody cares
how legislation gets made. Nobod cares about how sausage gets made
until they taste it and it doesn't taste good. And I think that is what
is happening right now with the American people.
This tax bill is falling flat on its face. This tax scam bill is
falling flat on its face because it is not helping the people it was
purported to be helping in the first place. The greatest bait-and-
switch probably in the history of our country went on in terms of what
the President talked about, the people he was going to help, the middle
class and hardworking people, and instead it all basically went to the
wealthiest 1 percent and the wealthiest multinational corporations in
the history of mankind.
They got permanent tax relief, and the middle class and working men
and women in this country got bupkis. All right? And the reality is
they know what happened here. They know that 83 percent of that bill
went to the wealthiest 1 percent and 17 percent to working men and
women and working poor people.
That is just obscene. That is not reflective of who we are as a
nation or as a country or as a people, yet that is what happened, and
in no small part because it was done in such a partisan way. The bill
had not a single hearing within the committee and was brought to the
floor all to meet a deadline of passing it before the Christmas and
Hanukkah break. That was the only goal, so that my Republican
colleagues could say they had achieved something, even if it was ill
conceived and passed with rushed judgment.
And now we know about all the problems with the bill and all the
fixes that have to take place; things that maybe could have been worked
out had there been a more open process and more deliberative process
and the inclusion of Democrats in that process. Just maybe.
So I don't want anyone, again, to be watching C-SPAN or maybe turning
on the news tonight and learning about all the bipartisanship that is
happening here on the House floor--and it is good; these are good bills
that we are working on together--and say: Did I die and something
happened? Has the world been righted? Am I missing something?
I want them to know: No. You are not missing anything.
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That tax scam bill did pass, and it did go toward helping the
wealthiest 1 percent and the richest multinational corporations in the
history of the world, and the little guy is not getting very much at
all. That is still the case. That hasn't changed. And it is sad, but it
is true.
I, once again, want to thank the gentlewoman for her efforts in
bringing this bipartisan bill to the floor. But let it be known that
this is more of an aberration and not the norm in terms of how the
committee has been conducting business, nor has the House of
Representatives been conducting business in the most recent past.
Mr. Speaker, I yield back the balance of my time.
Ms. JENKINS of Kansas. Mr. Speaker, I yield myself such time as I may
consume.
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.
Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentlewoman from Kansas (Ms. Jenkins) that the House suspend the rules
and pass the bill, H.R. 5446, as amended.
The question was taken; and (two-thirds being in the affirmative) the
rules were suspended and the bill, as amended, was passed.
A motion to reconsider was laid on the table.
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