Authority to Pay State and Local Taxes on Property After Entry of an Order of Forfeiture ( 1993 )

Authority to Pay State and Local Taxes on Property
After Entry of an Order of Forfeiture
T h e A tto rn e y G en eral h a s d isc re tio n a ry a u th o rity to m a k e p a y m e n ts o f sla te an d lo c a l tax claim s
a g ain st c iv illy fo rfeited p ro p erty a fte r a fo rfe itu re o rd e r h as b e en issu e d , b a se d o n h e r e q u ita b le
d is c re tio n to a d m in ister civ illy fo rfe ite d p ro p e rty , u n d e r 21 U S C § 8 8 l(b ) -(e ) a n d 28 U .S .C .
§ 5 2 4 (c )(1 )
T h e A tto rn e y G e n eral has d is cretio n to p ay state an d lo cal tax c la im s a g ain st c rim in a lly fo rfe ite d p ro p ­
erty , u n d e r th e a u th o rity in those sta tu te s to “ ta k e an y o th e r a ctio n to p ro te c t the rig h ts o f in n o c e n t
p e rso n s w h ic h is in th e in te re sts o f ju s tic e .”
D e c e m b e r 9, 1993
M e m o r a n d u m O p in io n f o r t h e D ir e c t o r a n d C h ie f C o u n s e l
E x e c u t i v e O f f ic e f o r A s s e t F o r f e i t u r e ,
and the D e p u t y D ir e c t o r
A s s e t F o r f e i t u r e O f f i c e , C r i m i n a l D iv is i o n
Y o u have requested advice on two matters: a proposed Directive from the Ex­
ecutive Office for Asset Forfeiture (“Directive”) that would authorize payment of
state and local taxes on some civilly forfeited property for which the court had no­
tice of a state or local tax claim before the court entered an order of forfeiture, and
a draft Memorandum from the Asset Forfeiture Office, Criminal Division, to the
Attorney General (“AG Memo”) concluding that the Attorney General may pay
state and local taxes on criminally forfeited property (and proposing an Attorney
General Order to delegate such authority to the Director of the Asset Forfeiture
Office). The proposed Directive and the draft AG Memo both raise the question of
the Attorney General’s discretionary authority to pay taxes, for the period from the
offense giving rise to forfeiture to the entry of an order of forfeiture, on property
for which a court has already entered an order of forfeiture.
The focus of our previous opinion, to which the Directive and the AG Memo
both refer, was the liability of the United States for payment of such taxes on prop­
erty for which a court had not yet entered a forfeiture order. See Liability o f the
United States fo r State and Local Taxes on Seized and Forfeited Property, 17 Op.
O.L.C. 104 (1993) (“Copeland Memorandum”). Accordingly, that opinion, which
reconsidered an earlier Office of Legal Counsel (“OLC”) opinion in light of United
States v. 92 Buena Vista Ave., 507 U.S. 111 (1993) (“Buena Vista”), did not spe­
cifically address the circumstances at issue in the Directive and the AG Memo. We
now conclude that payment of taxes on civilly forfeited property on the terms set
forth in the proposed Directive would not be inconsistent with the civil forfeiture
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statute and would not exceed the Attorney General’s equitable discretion under the
civil forfeiture laws. We also conclude that payment of taxes on criminally for­
feited property in the circumstances apparently envisioned by the draft AG Memo
would not be unlawful under the criminal forfeiture laws or beyond the Attorney
General’s equitable, discretionary authority under such laws. In addition, we de­
scribe revisions to the draft AG Memo necessary to ensure accuracy in its descrip­
tion of OLC advice.
I.
The proposed Executive Office for Asset Forfeiture Directive provides, in rele­
vant part:
This directive . . . permits the payment of taxes upon civilly for­
feited properties: (1) which have not yet been sold, or (2) which are
the subject of pending litigation regarding payment of taxes, pro­
vided, however, that a tax claim was filed with the federal district
court prior to entry of the order of forfeiture, or that a valid lien had
been recorded among the pertinent land records giving the federal
district court notice of the tax claim prior to entry of the order of
forfeiture.
Directive at 2.[l1
Where an appeal from an order of forfeiture is no longer available or was un­
successful, a state or locality asserting a tax claim has no legal right and no judicial
remedy under the civil forfeiture statute’s “innocent owner” provision as inter­
preted in Buena Vista. See Copeland Memorandum, 17 Op. O.L.C. at 106-07,
113 n.13. Nonetheless, a permissible interpretation of the statutes governing civil
forfeitures would authorize payment of the taxes described in the Directive as an
exercise of the Attorney General’s equitable discretion in administering civilly
forfeited property. See 21 U.S.C. §881 (b)-(e); 28 U.S.C. § 524(c)(1) (Attorney
General’s authority in administering civil forfeiture laws); Chevron U.S.A., Inc. v.
Natural Resources Defense Council, Inc., 467 U.S. 837, 843-44 (1984) (deference
to reasonable agency construction of statute it administers, so long as not contrary
to clearly expressed congressional intent); Fertilizer Inst. v. EPA, 935 F.2d 1303,
1309 (D.C. Cir. 1991) ( Chevron principles apply to agency interpretations that are
not full “legislative” rules); General Motors Corp. v. Ruckelshaus, 742 F.2d 1561,
1565 (D.C. Cir. 1984) (same), cert, denied, 471 U.S. 1074 (1985).
Two related arguments support this conclusion. First, a reasonable construction
of the civil forfeiture statute could consider the tax liens described in the Directive
1 You hav'e in fo rm ed us, and the fo llo w in g analysis assum es, that the m odifying language follow ing
“p r o v id e d , h o w e v e r ,' applies to both en u m erated categories o f civilly forfeited property
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to be the equivalent of a pre-offense ownership interest, or other interest, that could
be forfeited to the United States and that the Attorney General subsequently could
restore, after a court order of forfeiture, to the person who previously held such an
interest.
As interpreted by the Supreme Court in Buena Vista, the civil forfeiture statute
protects the property of an “owner” who “prove[s],” before the entry of an order of
forfeiture, “that [he or] she is an innocent owner.” Buena Vista, 507 U.S. at 127(plurality opinion); 21 U.S.C. § 881(a)(6), (7) (commonly referred to as the
“innocent owner” provision, stating that “no property shall be forfeited under this
paragraph, to the extent of the interest of an owner, by reason of any act or omis­
sion established by that owner to have been committed or omitted without the
knowledge or consent of that owner”); id. § 881(h) (commonly referred to as the
“relation back” provision, stating that “[a]ll right, title, and interest in property
described in [section 881(a)] shall vest in the United States upon commission of
the act giving rise to forfeiture”). As the Copeland Memorandum explains, a state
or locality holding a tax lien against a property is an “owner” of that property, and
in almost all cases, there will be no doubt that the state or locality will satisfy the
statute’s “innocence” requirement. See Copeland Memorandum, 17 Op. O.L.C. at
106; cf. Directive at 1.
In light of these considerations, it would not be unreasonable to conclude that
notice to the federal district court of the tax claim before the entry of an order of
forfeiture can constitute the showing or proof required by the statute, in light of
Buena Vista.2 While an unappealed or unsuccessfully appealed forfeiture order in
such a case would have the effect of vesting the taxing authority’s interest in the
United States, retroactive to the date of the offense giving rise to forfeiture, the
taxing authority still would have demonstrated a protected innocent ownership in­
terest that the court merely failed to recognize before issuing its order. On this
analysis, the affirmed or unchallenged forfeiture order would have effected a for­
feiture of that interest to the United States, one which the Attorney General could
remit or mitigate after the conclusion of the forfeiture proceedings. See 21 U.S.C.
§ 881(d) (laws relating to seizure and forfeiture of property, including mitigation
and remission of forfeiture, under the customs laws generally apply to civil forfei­
ture under § 881, except that the Attorney General and her delegees are substituted
for the Secretary of the Treasury and customs authorities); 19 U.S.C. § 1618(authority of Secretary of the Treasury, customs officials to “remit or mitigate”
forfeiture upon a finding that the “forfeiture was incurred without willful negli­
2 This con clu sio n is consistent with our discussion in the C opeland M em orandum o f the A ttorney G e n ­
e ra l’s discretionary authority under 28 U S C. § 524 U nder the analysis em ployed in this M em orandum and
under the standards adopted in the D irective, a state or locality w ould still have to have “e s ta b lis h e d ]” that it
is an “ innocent o w n e r” (w ith the aid o f the presum ption o f '‘innocence” that is set forth in the D irective and
that is consistent w ith the C opeland M em o ran d u m 's conclusion that the ' “ innocence requirem ent" w ould be
“easy to satisfy in m ost cases”) for the A ttorney G eneral or her d elegees to make a discretionary paym ent of
post-offense tax c la im s C opeland M em orandum , 17 O p O L .C at 113 n 13
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gence or without any intention on the part of the petitioner . . . to violate the law”
or that there exist “such mitigating circumstances as to justify the remission or
mitigation”); 28 U.S.C. § 524(c)(1)(E) (authority of Attorney General to make
“disbursements authorized in connection with remission or mitigation procedures
relating to property forfeited under any law enforced or administered by the De­
partment of Justice”).3
A contrary conclusion — that the entry of an order of forfeiture, by operation of
the relation back doctrine, results in the taxing authorities’, in effect, never having
had any interest in the property, despite the evidence before the court that they had
an innocently held ownership interest — would forge an extremely tight, and rather
odd, link between the prior existence of a substantive interest (whether or not such
interest may be asserted or protected in court proceedings) and the course of sub­
sequent judicial proceedings. Neither the civil forfeiture statute nor the opinions in
Buena Vista appear to require such a link.
Second, although a forfeiture order may deprive holders of the tax claims de­
scribed in the Directive only of something less than the type of interest at issue in
conventional proceedings for remission or mitigation of civil forfeiture (i.e., those
involving petitioners who had an interest in the property prior to its use in the of­
fense giving rise to forfeiture), the Attorney General’s equitable authority to reduce
the harsh impact of forfeiture still can be construed to extend sufficiently beyond
ordinary remission and mitigation to include the discretionary payment of tax
claims contemplated by the Directive (as well as the discretionary denial of poten­
tially eligible requests for relief, if any, that are not covered by the Directive).
Courts and Congress have stressed that the Attorney General has broad and gener­
ally unreviewable discretion in exercising his or her lawful authority in this area.
See, e.g., United States v. Reckmeyer, 836 F.2d 200, 207 (4th Cir. 1987) (granting
of a proper petition for “relief or mitigation” of forfeiture was “a matter solely
within the unreviewable discretion of the Attorney General”); United States v.
$2,857.00, 754 F.2d 208, 214 (7th Cir. 1985) (Attorney General has “virtually un­
reviewable discretion to ameliorate the harshness of forfeiture statutes in appropri-
1 T h is in te rp retation o f the remedial sch e m e under the civil forfeiture law s also derives su pport from its
sim ilarity lo the structure C o n g ress contem plated in enacting the “bona fide purchaser” provision in crim inal
forfeitu re statu tes See. e.g , 21 U.S C § 8 5 3 (n )(6 ); 18 U S.C . § 1963(/)(6). U nder those provisions, a
claim an t w h o estab lish es his bona fide p u rch aser status in co u rt proceedings ancillary to the forfeiture pro­
ceed in g s has a legally p rotected interest m th e property. A valid court order may not forfeit that interest and
the A tto rn ey G e n e ra l’s reco g n itio n of such an in terest would n o t be discretionary. Such a bona fide pur­
c h ase r is in the sam e positio n as a claim ant in civil forfeiture proceedings w ho establishes his innocent
ow n er statu s prior to the c o u rt’s entry of an o rd e r o f forfeiture See C opeland M em orandum , 17 Op. O L C
at 109-11
T he leg islativ e history o f the bona fide p u rc h a se r provision indicates that C ongress assum ed that a c la im ­
ant w ho “ fails to o b tain relief under the . . an cillary hearing provision [w hich enables such a claim ant ‘in
essence . [to] ch allenge[] the validity' o f a forfeiture order] . . . may [still] seek equitable re lie f from the
A ttorney G e n eral." S Rep. No 98-225, at 2 0 8 -0 9 (1983), rep rin te d in 1984 U .S.C C .A N 3 1 8 2 ,3 3 9 1 -9 2
T he D irectiv e w ould provide equivalent re lie f to som e c laim an ts w ho failed to obtain relief in court pro­
ceed in g s u n d e r th e innocent o w n er provision in the civil forfeiture statute
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ate cases”); United States v. One 1973 Buick Riviera , 560 F.2d 897, 900 (8th Cir.
1977) (“overwhelming weight of authority” supports the view that “denial of [a]
petition for remission” is “not subject to judicial review on the merits”); United
States v. One 1961 Cadillac , 337 F.2d 730, 732-33 (6th Cir. 1964) (similar);
S. Rep. No. 98-225, at 207-08 (1983), reprinted in 1984 U.S.C.C.A.N. 3182,
3390, 3392 (noting that petitions for remission or mitigation of forfeiture “are most
frequently filed as the result of civil forfeiture actions” and that the Attorney Gen­
eral’s decisions with respect to such requests for “equitable relief’ “[traditionally”
have been “viewed entirely as a matter of discretion and not subject to judicial re­
view u s).4
In the draft AG Memo, the first full paragraph on page three could be revised to
reflect the advice given in this part of this Memorandum, and should be revised to
make clear that payment of liens for post-offense taxes where a state or local tax
lien-holder establishes its “innocent ownership” status to the court’s satisfaction
before the entry of a judgment of forfeiture is not (as the AG Memo’s use of the
phrase “is permitted to pay” appears to suggest) an exercise of the Attorney Gen­
eral’s discretion.
II.
The draft Attorney General Memorandum concludes:
[T]he statutory language [in 21 U.S.C. § 853(i)(l), 18 U.S.C.
§ 1963(g)(1) and other criminal forfeiture statutes containing, or
adopting by reference, identical provisions] that permits the Attor­
ney General to “take any other action to protect the rights of inno­
cent persons which is in the interest of justice” provides the
necessary statutory authority to make payments of state and local
taxes on property forfeited under the criminal forfeiture laws as a
discretionary matter.
AG Memo at 3. As the AG Memo correctly indicates, holders of state and local
lax claims against such property for the period after the commission of the act
giving rise to forfeiture have no legal right and no judicial remedy under the crimi­
nal forfeiture laws. There is no equivalent to the civil forfeiture statute’s “innocent
4 Bui see also LaC hance v. DEA, 672 F Supp 76, 7 9 -8 0 (E D N .Y . 1987) ( '‘form alized invariable policy
o f denying petitions” and failure “ to give any reason for d enial” is basis for lim ited ju dicial intervention “to
direct [an] agency to exercise u s ju risd ictio n " to decide the petition), M em orandum for Leland E. Beck,
S enior Counsel, O ffice o f Policy D evelopm ent, from R osem ary Hart, A cting D eputy A ssistant A ttorney
G eneral, O ffice o f Legal C ounsel, Re S ta tu to ry A u th o riza tio n f o r the P roposed R e g ulations G overning the
R em ission or M itigation o j F orfeited P ro p erty (M ar 25, 1993) (interpreting civil forfeiture statute rem ission
and m itigation authority as not authorizing transfers to persons w ho had no prior interest in the forfeited
property but who were victim s o f the offense giving rise to forfeiture).
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O pinions o f the O ffice o f Legal C ounsel
owner” provision in the criminal forfeiture statutes, and the “bona fide purchaser”
exception is unavailable to such claimants. See Copeland Memorandum, 17 Op.
O.L.C. at 112. A permissible construction of the “rights of innocent persons” pro­
vision, however, would authorize discretionary payment of such taxes.5
It would be difficult to base the authority to grant such equitable and discretion­
ary relief on the analysis offered in Part I of this Memorandum to support the post­
forfeiture order payment of claims for post-offense taxes in the civil forfeiture
context. Because the criminal statutes contain no innocent owner provision, any
“showing” or “p ro o f’ with respect to such a tax claimant’s innocent ownership
(short of the “bona fide purchaser” showing which taxing authorities cannot make)
would appear to be irrelevant and not to provide a basis for the Attorney General to
remit or mitigate any forfeited interest. The logic of Buena Vista would seem to
dictate that the relation back doctrine, see, e.g., 18 U.S.C. § 1963(c); 21 U.S.C.
§ 853(c); c / 21 U.S.C. § 881(h) (civil provision, identical in relevant part), will
have operated to leave a tax lien-holder as, in effect, never having held any
“interest of an owner,” 21 U.S C. § 881(a)(6), (7), in the property with regard to
post-offense taxes. On this reasoning, there will have been no ownership interest
forfeited and, thus, nothing for the Attorney General to remit or mitigate. Cf.
Copeland Memorandum, 17 Op. O.L.C. at 113 n.13.
The better argument derives discretionary and equitable authority of the Attor­
ney General to lessen the impact of forfeiture on the claimants for post-offense
taxes from the “rights of innocent persons” provisions cited in the AG Memo, and
depends on a construction of “rights of innocent persons” that is broader than
“innocent ownership.” We believe that adopting such a construction would not be
unlawful and would be within the Attorney General’s authority to interpret and
administer the criminal forfeiture statutes. See, e.g., 18 U.S.C. § 1963(e)-(g);
21 U.S.C. § 853(g)-(j) (Attorney General’s authority in administering criminal for­
feiture laws and disposing of property seized under criminal forfeiture laws); Chev­
ron U.S.A., Inc., 467 U.S. at 843-44.
First, the statutory language is compatible with such a view. Criminal forfeiture
statutes explicitly confer upon the Attorney General the authority to “take any
other action to protect the rights of innocent persons,” in addition to the authority
to remit or mitigate forfeitures (and the obligation to recognize the interests of
3 T o b e elig ib le for d iscret.o n ary relief u n d e r these p rovisions, it w ould appear to be sufficient for state
and local tax in g au th o rities 10 be “ innocent o w n e rs,” w ithin the m eaning o f that term under the civil forfei­
ture pro v isio n s — a stan d ard th at all or nearly all tax in g au th o rities will meet, cj. C opeland M em orandum ,
17 O p. O L.C . at 106 ( '‘a state o r locality h o ld in g a lax lien can be an ‘o w n e r'” and “[t]he ‘innocence’ re ­
q u irem en t . . . w ould seem to he easy to satisfy in m ost cases ’); D irective at 1 (“in d u lg in g ] a presum ption o f
in n o c e n ce ” o f taxing a u th o rities under the civil fo rfeitu re statu te ' ‘in the absence o f exceptional circu m ­
stan c e s”) W e h ave found n o th in g in the statu to ry language, legislative history or judicial interpretations to
sug g est that the w ord “ in n o cen t” in the crim in al fo rfeitu re s ta tu te 's phrase “innocent persons” is narrow er
than the ph rase in the civil forfeiture statute th at c o u rts and C o n g ress have sum m arized as “ innocent” (in the
phrase “ in n o cen t o w n e r” ). S ee S Rep. No. 98-225, at 215, rep rin te d in 1984 U.S C C A.N at 3398, Buena
Vista, 507 U S 111. If “ rig h ts” is construed as d escrib ed in this M em orandum , the term is b roader than
“o w n e rsh ip ” or “ in terest o f an o w n e r"
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bona fide purchasers and holders of senior vested interests). 18 U.S.C.
§§ 1467(h)(1), 1963(g)(1), 2253(h)(1); 21 U.S.C. § 853(i)(l) (emphasis added).
Construing the quoted language as more than surplusage requires a conclusion that
the Attorney General’s authority is broader than that exercised in ordinary remis­
sion and mitigation proceedings. Also, the use of the term “rights o f innocent per­
sons” in these provisions, but “right, title, and interest in property” the forfeiture of
which is subject to remission and mitigation in the civil and criminal forfeiture
statutes, 19 U.S.C. §1618; 21 U.S.C. § 881(a), (h); 18 U.S.C. § 1963(a)-(c);
21 U.S.C. § 853(a)-(c) (emphasis added), and “interest o f an owner" in the inno­
cent owner provisions of the civil forfeiture statute, 21 U.S.C. § 881(a)(6), (7)
(emphasis added), suggests a lesser claim on the property, or a looser connection
between the claimant and the property, in the former context. Cf. Black’s Law
Dictionary 812, 1324 (6th ed. 1990) (defining “interest” as “[t]he most general
term . . . to denote a right, claim, title, or legal share in something”; defining
“right,” in its “narrower signification ” as “an interest or title in an object of prop­
erty” and, more generally, as “[t]hat which one person ought to have or receive
from another.”) (emphasis added). This contrast offers some support for the view
that the criminal statutes give the Attorney General discretionary authority to rec­
ognize, after forfeiture, claims that are broader than ownership interests, including
claims for taxes for the period after the offense giving rise to forfeiture.
Second, the legislative history of two principal criminal forfeiture provisions, 21
U.S.C. § 853(i) and 18 U.S.C. § 1963(g) (provisions that the other criminal forfei­
ture statutes cited in the AG Memo incorporate by reference or replicate), suggests
that the Attorney General’s authority is broad enough to include payment of the
taxes described in the AG Memo. The description of these provisions states that a
claimant who could have raised a bona fide purchaser defense in a hearing ancil­
lary to a criminal forfeiture proceeding, but who failed to do so, still “may seek
equitable relief from the Attorney General.” S. Rep. No. 98-225, at 208-09, re­
printed in 1984 U.S.C.C.A.N. at 3391-92 (describing, somewhat loosely, this eq­
uitable relief as being available through a “remission and mitigation process”).
Having foregone an available legal remedy for protecting an interest acquired after
the offense that rendered the property subject to forfeiture, such a claimant would
seem to be, after the final forfeiture order and the operation of the relation back
doctrine, in essentially the same position as an “innocent” state or locality asserting
a tax claim for the post-offense period. Given that Congress’s view was that the
equitable remedy of petitioning the Attorney General was clearly available to the
potential bona fide purchaser claimant under existing law prior to the enactment of
the bona fide purchaser defense, there would seem to be no reason to infer that
Congress meant to restrict the remedy only to claimants who could have raised a
successful bona fide purchaser defense to forfeiture in court proceedings, but were
too slothful or too poorly advised to do so. See id. at 193, reprinted in 1984
U.S.C.C.A.N. at 3376 (under “[pjresent [f]ederal [l]aw . . . . [a] party who does not
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have legal basis for defeating the forfeiture, but who has an equitable basis for re­
lief, may petition the Attorney General.”).
Third, judicial interpretations also provide some support for the position taken
in the AG Memo. The most relevant opinion we have found construes 21 U.S.C.
§ 853(i)(l) as conferring upon the Attorney General extremely broad equitable
authority to do what is ‘“fair and ju st,’” and concludes that a claimant whose claim
against forfeited property arose after the offense giving rise to forfeiture, but whose
interest was not that of a bona fide purchaser, could petition the Attorney General
for equitable relief to “recoup some of its losses from [the] forfeited property.”
United States v. Lavin, 942 F.2d 177, 185 & n.10, 187 (3d Cir. 1991). The opin­
ion does not state which provision in the statutory subsection is relevant. We be­
lieve that the better argument, and perhaps the only lawful conclusion, is that the
authority to grant relief is that provided by the statutory mandate to “take any other
action to protect the rights of innocent persons which is in the interest of justice.”
21 U.S.C. § 853(i)(l); see also United States v. Mandel, 505 F. Supp. 189, 191-92
(D. Md. 1981) (describing predecessor to current 18 U.S.C. § 1963 as both
“vestfing] the Attorney General” with “authority to make provisions for the remis­
sion or mitigation of forfeitures” and “charging] him with the obligation of pro­
tecting the rights of innocent persons”; suggesting that the latter authority is the
likely basis for recognizing claim by third party that he, not defendant, owned
property that court ordered forfeited), aff’d 705 F.2d 446 (4th Cir. 1983); S. Rep.
No. 98-225, at 207 n.44, reprinted in 1984 U.S.C.C.A.N. at 3390 (citing Mandel
as authority for the equitable, discretionary relief process to be retained after the
enactment of current 18 U.S.C. § 1963(g)(1) and 21 U.S.C. § 853(i)( 1)).
Finally, two references in the draft AG Memo to OLC’s views are, at this stage,
inappropriate. We believe that the draft AG Memo goes too far in concluding, at
pages 3-4, that the procedure proposed in the AG Memo is “fully consistent with
the letter and spirit” of the Copeland Memorandum. As this memorandum has
indicated, the Copeland Memorandum did not address these issues, and a conclu­
sion that such payments are permissible depends on an analysis that the Copeland
Memorandum did not pursue or evaluate. If a statement similar to that contained
in the draft AG Memo is to be retained, it should go no further than a statement
that the proposed procedure is “compatible” or “not inconsistent” with the
Copeland Memorandum. Also, this Office has not yet reviewed the legality of the
delegation that the proposed order attached to the draft AG Memo would effect.
Accordingly, the next to last paragraph of the draft AG Memo (stating that OLC
has confirmed that the delegation is permissible) cannot be included at this time.
Ordinarily, this Office addresses such issues at a later stage, as part of a review of a
proposed Attorney General order for form and legality.
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III.
For the reasons set forth above, we conclude that it would not be unlawful for
the Attorney General (or those to whom her authority is properly delegated, see
28 U.S.C. §§ 509, 510) to pay, in an exercise of equitable discretion, the taxes on
civilly forfeited property as described in the proposed Directive from the Executive
Office for Asset Forfeiture, and the taxes on criminally forfeited property as de­
scribed in the draft Memorandum to the Attorney General from the Office for As­
set Forfeiture.
Exercise of the Attorney General’s equitable discretion to pay tax claims must,
of course, comply with any applicable regulations, unless and until such regula­
tions are lawfully modified. See, e.g., 28 C.F.R. §§ 9.1-9.7 (1993). See generally
United States v. Nixon, 418 U.S. 683, 694-95 (1974); United States ex rel. Accardi
v. Shaughnessy, 347 U.S. 260 (1954).
WALTER DELLINGER
Assistant Attorney General
Office o f Legal Counsel
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