Acting Director Sullivan,
Mr. John R. Spencer
Chief, Firearms Technology Branch
244 Needy Rd.
Martinsburg, WV 25405
August 12, 2008
Dear Mr. Sullivan,
I have not heard from you or the ATF since our last communication. I have attempted several times on behalf of Historic Arms LLC (hereafter the Company) to speak with John Spencer, and left messages for him to call back.
Your letter (3311/2008-642) of July 22, 2008 informs the Company that you were going to proceed with forfeiture proceedings. The Company asked that you proceed without delay.
The Company has not received any notice of proceedings. You have seized Company property without any cause or court order to date. The company firmly demands the return of the firearm in question. The company also firmly stands by it’s finding that the ATF applied testing methods are invalid, therefore FTB classification is also found to be invalid, and not supported by documents issued by ATF or basic common sense.
Furthermore your claims of having rights to seize and forfeit the property is meritless-- please see your own policy:
Title 26 Seizures for ForfeitureMr. Sullivan, even your own staff documents the fact that a “Notice of Manufacture” [ATF form 2] was filed by the Company. There was no attempt to defraud or avoid paying tax. As Mr. Spencer pointed out in his last letter (3311/2008-642) of July 22, 2008, I am a Special Occupational Tax Payer in good standing.
Overview:
There are only two methods of forfeiture under the Internal Revenue Code (Title 26), administrative and civil judicial. These methods are commonly referred to as "code forfeitures" or "Title 26 forfeitures." There is no provision for criminal forfeiture. Only property used, or intended to be used, to violate the Internal Revenue laws can be forfeited. Proceeds of such a violation is not forfeitable. In addition, there are no "tracing" provisions with code forfeitures. Accordingly, the property purchased with proceeds is also not forfeitable.
Authority Granted in 26 USC §7301
Title 26 USC §7301 provides for the forfeiture of taxable property which is in the custody of any person intending it to be sold, removed, concealed, or deposited to defraud the United States of the tax, or is possessed with the intent to avoid payment of the tax. It also provides for the forfeiture of assets used to manufacture, contain, or transport the taxable property that is the object of the fraud or evasion scheme.
Authority Granted in 26 USC §7302
Title 26 USC §7302 provides for the forfeiture of any property used, or intended for use, in violation of the provisions of the Internal Revenue laws or regulations prescribed under such laws. It is the more commonly used statute for a Title 26 forfeiture. The wording of 26 USC §7302 is very broad. Although 26 USC §7302 authorizes the seizure and forfeiture of any property used, or intended to be used to violate any of the Internal Revenue laws, it is not to be used as a substitute to the collection of taxes. Consequently, most Title 26 forfeitures have involved property used to violate the provisions of the wagering tax laws (26 USC §4401, §4411, and §4412), the sale of motor fuels (26 USC §4081 and §4091), and, to a lesser degree, the equipment used in these tax fraud schemes. Forfeiture can also apply to other sections, such as the sale of tires (26 USC §4071).
Therefore please return the property of the Company [the firearm in question] immediately.
Respectfully,
Len Savage
President,
Historic Arms LLC
------------------------------
Just so we understand the rules:
Crimes and Criminal Procedure - 18 USC Section 983
(B) If the Government does not -
(i) file a complaint for forfeiture or return the property, in accordance with subparagraph (A); or
(ii) before the time for filing a complaint has expired -(I) obtain a criminal indictment containing an allegation that the property is subject to forfeiture; and
(II) take the steps necessary to preserve its right to maintain custody of the property as provided in the applicable criminal forfeiture statute,
the Government shall promptly release the property pursuant to regulations promulgated by the Attorney General, and may not take any further action to effect the civil forfeiture of such property in connection with the underlying offense.