[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.

                              {time}  1400

  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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