use of this tool. However, the use of it was going to be restricted to approval by their own regional directors in the field. Senator LONG. Do you have any indication of any appreciation or understanding of the rights of the individual, or any apprehension about violating the privacy of an individual? Mr. KARDOS. Yes, sir; we did. And we discussed it. Mr. KARDOS. Yes; they did, too, sir. They were as concerned as we were. But they felt that they possibly have such bad tax-delinquent cases that they would be forced to use the severest method which they could utilize. Senator LONG. Well, in a case like that you are still invading the privacy of a citizen, whether it is a bad case or a good case. You cannot make a distinction about that type of decision just because of the type of case involved, can you? Mr. KARDOS. No, sir; but that was a policy decision which they had to make in the first instance as to what tool they were going to use. We considered our legal obligation to be that we did have to comply with a levy, if it was served. And it was only because of the agreements between the respective departments that, in fact, the practical effect of which had been to eliminate levies altogether. Senator LONG. What would you do now if the Commissioner of Internal Revenue would send over a levy and tell you he wanted this mail delivered to him? Mr. KARDOS. Well, the Postmaster General has now told me himself that he would want to consider that particular case himself as to whether he would concur with the Commissioner of Internal Revenue. Senator LONG. Just say that he would not concur in it, you see, we have still let the door open. If he would still say that he would not concur in it, then we would not need a statute, otherwise we need a statute, according to what the Postmaster General is suggesting. Mr. HANNAH. I believe, Mr. Chairman, that the Postmaster General attempted to make it quite clear that the practical effect of this agreement between the Internal Revenue Service and the Department will do away with this practice as long as the present administrators are in office. It seems that he has had some kind of assurance by their top officials. Senator LONG. You are talking just about the personal mail now. You are not talking about business mail. Mr. HANNAH. That is right. Senator LONG. But business mail would continue to be subject to this type of levy, would it not? Mr. HANNAH. Only if the business is properly seized. And the Internal Revenue already stands in a position as a substitute for the addressee. Senator LONG. What would be the attitude of the Post Office Department for legislation to correct that situation? Mr. HANNAH. The latter situation I have not discussed with the Postmaster General. As for the levy on mail, we are quite clear, and we want the committee to understand that while we defend the practice of the Post Office in having honored these levies in the past we certainly do not defend the practice of levying on mail as such, and will support legislation to an amendment on it. Senator LONG. You make any exception in a business situation whether or not it is a corporation that the IRS has seized, or a business that is owned individually? Mr. HANNAH. I think it is just the business. A man can operate a business either as a proprietorship or a partnership or a corporation. Senator LONG. You make no distinction between the corporation or the individual partnership or the individual business? Mr. HANNAH. No, sir. Mr. FENSTERWALD. We have, I think, established the practice with respect to Internal Revenue Service, and the question of first-class mail. Are there any other Government agencies, Mr. Hannah, to which you either give, loan, or by any other method first-class mail for any length of time? Mr. HANNAH. Not to my knowledge. Mr. Fensterwald. Not within the knowledge of the General Counsel's Office. Mr. FENSTERWALD. Well, now, that is with the exception of the search warrants, I take it, which are a judicial document. Mr. HANNAH. Of course. Of course. Mr. FENSTERWALD. Could you tell me from your knowledge which agencies come to you with search warrants for first-class mail? Mr. HANNAH. Maybe Mr. Doyle can answer that. I do not believe we have had any since I have been here. Mr. DOYLE. I only recall one search warrant in the 26 years I have been there, and that was procured by the U.S. attorney in one of the districts of the State of New Jersey in connection with a mail fraud case. Mr. FENSTERWALD. You mean in all the years that you can remember, in 26 years you can only remember one search warrant? Mr. DOYLE. That one search warrant is the only one that I can recall. Mr. FENSTERWALD. Well, if Internal Revenue would come to you with search warrants instead of levies, I take it you would honor them? Mr. DOYLE. A warrant issued by the court, yes; certainly. Mr. FENSTERWALD. Can you see any objection to having the Internal Revenue go through such a procedure rather than unilaterally signing a levy? Mr. DOYLE. I see no objection. Mr. FENSTERWALD. And you would have no objection to a statute to that effect? Mr. DOYLE. Personally Iwould have no objection to such a statute. What position the Postmaster General and the administration might take, I cannot say. Mr. FENSTERWALD. How do you feel about delivery of mail to a business that has been seized by Internal Revenue? Would you be in favor of a statute which says that that mail should be returned to the sender? Mr. DOYLE. I am not prepared to answer that, Mr. Fensterwald. I would think that if Internal Revenue has properly seized a business, that all that goes with that business should be in the hands of Internal Revenue. Mr. FENSTERWALD. Well, now, that would, of course, include personal mail coming to members of the firm that happened to be addressed to that address. The thing that troubles me about this is that you may just eliminate only part of the problem by getting rid of the levy on personal mail. There might be some reason to have a statute which would say in case of mail coming to a business which had been seized, that the former owner or addressee should be present when that mail is delivered and opened so that business mail would not go to Internal Revenue, and personal mail would not go to the individual involved. This would not cause a great hardship. And as long as we are considering legislation, I just wondered if you thought that would be a practical solution. Mr. DOYLE. I think that would be a practical approach to it. Mr. FENSTERWALD. Those are the only questions I have, Mr. Chairman. Senator LONG. Mr. Burdick? Senator BURDICK. I just have a few short ones. U.S. v. Jones, reported in 31 Fed., what page? Senator BURDICK. What is the circuit? Mr. HANNAH. I am sorry, I did not hear you. Mr. HANNAH. It was the Federal circuit court. I do not have the case with me. I only have a short digest of it. Senator BURDICK. Do you have the date of the decision? Mr. HANNAH. How is that? Senator BURDICK. Do you have the date of the decision? Senator BURDICK. And it is your opinion that that case holds that the addressee is the owner of mail as property as against third parties? Mr. KARDOS. That is right, sir. Senator BURDICK. And it is your contention now that section 6334 of the United States Code gives you authority to issue these, gives someone authority to issue these levies? Mr. KARDOS. Section 6331 of title 26 gives the Secretary of the Treasury through the Internal Revenue Service the authority to issue levies. Senator BURDICK. When was that enactment of Congress made? Mr. KARDOS. The latest codification, I believe, was 1954, but the history of the legislation itself, I think perhaps IRS could better answer. Senator BURDICK. Will you supply the date on which the first enactment was made? Mr. KARDOS. Yes, sir. Senator BURDICK. And that is the authority you contend you had, that the IRS has for issuing these levies? Mr. KARDOS. Yes, sir. Senator BURDICK. Mr. Chairman, have copies of these letters been made a part of the record? Senator LONG. No. Senator BURDICK. Well, I would suggest at this time that they be made a part of the record. Senator LONG. Without objection, so ordered. (The letters referred to follow :) POST OFFICE DEPARTMENT, Hon. DURWARD G. HALL, DEAR CONGRESSMAN: This is in further reference to your letter concerning levies on delinquent taxpayers' mail by the Internal Revenue Service. You requested this Department's comments. You also asked on how many occasions such seizures may have been made within the past 2 years. As long ago as May 27, 1942, this Department has taken the position that mail was not exempt from the Internal Revenue Collector's authority to seize and sell property to satisfy delinquent taxes. (See 9 Ops. Sol. POD No. 191.) Congress has given the Secretary of the Treasury extremely broad authority to satisfy a tax levy. It has carefully spelled out the property not subject to levy. (See secs. 6331, 6332, and 6334 (c) of title 26 of the United States Code.) Basically, the final decision as to the scope of the authority under the Internal Revenue Code is for decision by the Secretary. Section 4057 of title 39, United States Code (formerly sec. 1717 (c) of title 18, United States Code) provides that only a person holding a search warrant or an employee of the dead letter office may open first-class mail which is in the custody of this Department. The Internal Revenue Code and section 4057 of title 39 were both passed by the Congress. Legally, neither is superior to the other. In case of any inconsistency, the one latest in time takes priority. We do not believe that there is any basic inconsistency between section 4057 and the Internal Revenue Code seizure provisions. These sections apply to different situations, and the provisions of both titles of the United States Code can be given effect. This Department must comply with the legal obligations placed upon it by Congress in other titles of the United States Code. It As alluded to above, the Secretary is not legally compelled to levy upon the mail. He may, as a matter of policy, not levy on the mail. This Department has conferred with the Treasury Department concerning this matter. Both the Postmaster General and the Secretary of the Treasury were and are concerned with the practice of the Internal Revenue Service in levying on the mail. was concluded that the authority which had been delegated to the field offices of the Internal Revenue Service would be and has been withdrawn. In other words, the field offices are no longer authorized to levy upon a delinquent taxpayer's mail. It was also agreed that in those extreme rare instances where all normal means of collecting delinquent taxes had failed, the cognizant field official would notify the Commissioner of the Internal Revenue Service. Then a levy would be made only if the Commissioner himself to determined after consultation with the appropriate official of this Department. In summary, this Department recognizes and agrees that the Internal Revenue Service does have authority to levy on mail addressed to delinquent taxpayers. During the period of December 1962 to the date of this letter, the records of this office reflect that there have been 14 levies made by the Internal Revenue Service, the last of which was made on October 27, 1964. I might add that while we believe these figures to be substantially correct, it is possible that there may have been one or more levies of which we have no record. If I can be of further assistance, please advise. HARVEY H. HANNAH, [9 Ops. Sol. POD No. 191] MAY 27, 1942. CHIEF INSPECTOR. I return herewith the letter of May 22, 1942, addressed to you by the inspector in charge, St. Louis, Mo., submitted with your letter of May 25, and reading as follows: "Today an agent of the local collector of internal revenue called at this office and advised that, under the authority of law, his service had seized the assets of a local concern which had failed to pay its income tax. He made inquiry as to whether such seizure gave the collector custody of mail matter addressed to the concern which was in default in tax payments. The seizure, so I am informed, was not under authority of an order of court, but was directly the result of authority contained in section 3990, which appears in the instructions issued by the Internal Revenue Commissioner. This is the first time such a question has been presented to this office. "It will be appreciated if you will advise me as to whether or not mail addressed to a firm which has been seized by the internal revenue collector on account of nonpayment of income taxes should be delivered to the collector of internal revenue, to the addressee which, in this instance, is not permitted access to the premises, or returned to the senders." Section 3990 (should be 3690) of the instructions issued by the Internal Revenue Commissioner is based on the provisions of the United States Code, title 26, sections 1580–1662, under which internal revenue collectors are authorized to attach and sell property of a delinquent taxpayer. It is noted from the enclosed letter that the addressee (taxpayer) whose business has been seized is not permitted access to the premises, and presumably the internal revenue collector has custody of the business. If this is true. mail addressed to the business, that is, to the firm, may be delivered in the first instance in accordance with the instructions of the internal revenue collector. Personal mail, however, should be delivered to the persons addressed. Such delivery should be made with the understanding that if any parties receive mail not in fact intended for them it will be returned to the postmaster promptly for proper disposition. VINCENT M. MILES. U.S. TREASURY DEPARTMENT, MR. BERNARD FENSTERWALD, Jr., INTERNAL REVENUE SERVICE, Chief Counsel, Subcommittee on Administrative Practice and Procedure, Senate Office Building, Washington, D.C. DEAR MR. FENSTERWALD: This is in response to an oral request from Mr. Raymond Cole, chief investigator of your committee, for information regarding the policy and practice of the Internal Revenue Service with respect to the service of levy on mail. We believe that the statutory authority for the seizure of mail for the purpose of collecting delinquent Federal taxes is well established in the law. Section 6331 of the Internal Revenue Code provides authority to collect taxes by levy upon any property, or rights to property, real or personal, tangible or intangible, belonging to a taxpayer against whom an assessment of Federal taxes has been made. With certain minor exceptions not here material, the only property exempt from this broad authority is that enumerated in section 6334 of the code, which states that notwithstanding any other law, no property or rights to property other than the property specifically mentioned therein shall be exempt from levy. It was early established in the law that mail is property, Searight v. Stokes, 44 U.S. 151, that judicial seizures thereof may be made without violating consitutional guarantees, Ex parte Jackson, 96 U.S. 721, and that statutorially authorized levy procedures do not deprive an individual of property without due process of law, Springer v. United States, 102 U.S. 586. As requested by Mr. Cole, there is enclosed a list of the taxpayers known to the National Office of the Internal Revenue Service against whom levies have been issued to seize assets from the mail, together with a summary of the considerations which led to the issuance of instructions to Internal Revenue Service personnel in December 1963 and again, in revised form, in September 1964. Copies of these instructions and copies of the notice-of-levy form are also enclosed. Very truly yours, MITCHELL ROGOVIN, INSTRUCTIONS ISSUED TO INTERNAL REVENUE SERVICE PERSONNEL The proposition of seizing mail in the custody of the Post Office Department as a means of collecting delinquent Federal taxes in flagrant and aggravated cases was first considered by the National Office of the Internal Revenue Service early in 1963, as a result of levy action taken in the field in 1962. The Chief |