IRS Seizures for Forfeiture

IRS Criminal Investigation (IRS-CI) is the law enforcement arm of the IRS. Special agents with IRS-CI are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code targeting a variety of financial crimes including tax fraud, drug trafficking, money laundering, public corruption, healthcare fraud, and identity theft.

Each week, the Internal Revenue Service (“IRS”) will post an online list of “notices of seizure.” Each notice lists the property seized for federal forfeiture for violation of federal law. The procedures for civil asset forfeitures involving a seizure by the IRS can be found at 18 U.S.C. Section 981.

In addition to the notice of seizure published online, any person claiming the property should also receive a personal written “notice of seizure” letter in the mail. The “notice of seizure” letter from the IRS lists options, including filing:

• a petition for remission;
• filing a petition for mitigation;
• filing a claim for court action; or
• doing nothing.

Many cases involve seizing bank accounts based on allegations that an individual or business unlawfully “structured” deposits to avoid federal currency reporting requirements.

Special agents with the IRS Criminal Investigation have dramatically increased the number of cryptocurrency seizures for forfeiture, usually after freezing the wallets until a seizure warrant can be served.

Attorney for Seizures by the IRS for Forfeiture

If your bank account or other property was seized by a Special Agent with the IRS Criminal Investigation unit for forfeiture, contact an attorney at Sammis Law Firm.

We are familiar with the tactics of IRS agents and task force officers when they seize money from bank accounts and other valuable property. The IRS might also impose a levy on cryptocurrency or a cryptocurrency wallet or account.

We can help you determine defenses that might exist if the IRS attempts to levy crypto for delinquent tax liabilities. Our attorneys are experienced in civil asset forfeiture cases. We can help you fight back.

Call 813-250-0500.

Problems IRS Petitions for Remission or Mitigation

In most cases, filing a claim for court action with the IRS is better than filing a petition for remission or mitigation. Filing a petition for remission or mitigation means you are NOT challenging the legality of the seizure or forfeiture.

Instead, the petition asks the IRS to pardon all or part of the property. The IRS then has wide discretion to just deny your request with a form letter that they send out months later.

The deadline for filing a petition is 30 days after the date listed on the personal notice (if you receive it in the mail) or within 30 days after the date of the final publication of this notice. See 28 C.F.R. Section 9.3(a).

The filing deadline means the IRS must have the petition in their office within those 30 days. If you are one day late in filing the petition, then it will be denied automatically, although you might not be notified of that problem for months.

If you file only a petition and no one else files a claim, then your petition will be decided by the IRS and NOT be heard in U.S. District Court.

The petition must include a description of your interest in the property supported by documentation, including any facts you believe justify the return of the property, and be signed under oath, subject to the penalty of perjury, or meet the requirements of an unsworn statement under penalty of perjury. See 28 U.S.C. Section 1746.

For the regulations pertaining to remission or mitigation of the forfeiture, see 28 C.F.R. Sections 9.1 – 9.9. The criteria for remission of the forfeiture are found at 28 C.F.R. Section 9.5(a). The criteria for mitigation of the forfeiture are found at 28 C.F.R. Section 9.5(b).

Or contact a civil asset forfeiture attorney at Sammis Law Firm. We can explain the benefits of by passing the petition process in favor of filing a verified claim for court action.

Types of IRS Seizures of Cryptocurrency

The amount of cryptocurrency seized by the IRS continues to increase each year. Most seizures are triggered by allegations the taxpayer failed to report cryptocurrency transactions properly on their tax returns. Other seizures involve allegations of money laundering or fraud. For example, one recent notice of seizure involving cryptocurrency listed on the forfeiture.gov website provided:

WASHINGTON D.C. 68250029-01, Tether (USDT), 408250 valued at $408,250.00, seized by the IRS – CI on July 21, 2025 from Tether Limited Inc.

The IRS has the authority to seize cryptocurrencies for forfeiture by obtaining a levy of crypto for delinquent tax liabilities. Those seizure warrants are served on exchanges including Binance, MEXC, and Coinbase.

At least 30 days prior to the levy taking place, the IRS must issue you a Final Notice of Intent to Levy. If you receive that notice, you should act quickly to stop the levy. If you fail to response, the IRS can levy your cryptocurrency, bank accounts, and other property. Crypto levies are now the most common type of IRS seizures.

How does the IRS know what cryptocurrency you are holding? The IRS gathers information about what cryptocurrency you might be holding from a 1099-B or 1099-K issued by an exchange, your tax returns, or information returned by an exchange in response to a subpoena duces tecum.

In many cases, the cryptocurrency is first frozen. You might be advised to contact a Special Agent at the IRS Criminal Investigation (CI), the law enforcement branch of the IRS.

At Sammis Law Firm, our forfeiture defense lawyers work with tax professional, tax attorneys, and forensic CPAs to recover seized cryptocurrency.

IRS Seizure of Tether Wallet (USDT)

In a recent notice of seizure published on the forfeiture.gov website, the IRS announces its attempt to forfeiture a Tether wallet (USDT) worth less than the $500,000 value threshold. For this forfeiture, the agency can issue a notice of administrative forfeiture and hope that no claimant files a claim for court action.

The recent notice provides: .

LAST DATE TO FILE: 12/02/2025 NEW YORK 13250063-01, No host Tether wallet (USDT) 1, valued at $396,955.27, seized by the IRS – CI on September 9, 2025 from Tether Limited Inc., by the IRS – CI in Newark, NJ.

Read more about seizures for forfeiture of frozen Tether Wallet with USDT.

In other recent case, the IRS-CI announced a seizure in Tampa, FL, that provided:

LAST DATE TO FILE: 12/08/2025

TAMPA

59250021-01,Approximately 435,479.18 (USDT) Tether that was previously associated with cryptocurrency address ending in 7ytUg4, seized by the IRS – Criminal Investigation on August 12, 2025 from the Tether Organization.

59250023-01, Approximately 218,063.63 Tether (USDT) that was previously associated with cryptocurrency address ending in YepKuc, seized by the IRS – Criminal Investigation on August 12, 2025 from the Tether Organization.

59250024-01, Approximately 301,672.68 Tether (USDT) that was previously associated with cryptocurrency address ending in svpJS6, seized by the IRS – Criminal Investigation on August 12, 2025 from the Tether Organization.

59250025-01, Approximately 50,545.95 Tether (USDT) that was previously associated with cryptocurrency address ending in 3CJ1qT, seized by the IRS – Criminal Investigation on August 12, 2025 from the Tether Organization

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When is a Cash Bond Required to File the Claim?

Although CAFRA abolished cash bond requirements for most forfeitures handled under Title 18, Title 19, Title 21, and other federal statutes, it does not apply to Title 26 Forfeitures (IRS Cases). The IRS exclusion appears in 18 U.S.C. § 983(i) which provides: “The term ‘civil forfeiture statute’ does not include …
(2)(D) the internal revenue laws.”

For this reason, forfeitures conducted under Title 26 (Internal Revenue Code) are not governed by CAFRA.
Instead, they remain governed by 26 U.S.C. § 7325 and 26 C.F.R. Part 403, which still requires the filling of a verified claim and cash bond. Those rules would not apply when the IRS refers to forfeiture to another agency acting under CAFRA, including HSI, FBI, CBP, or DEA. Additional, CAFRA provisions would apply if the IRS is acting jointly with DOJ and the property is subject to a non-tax statute such as 18 U.S.C. § 981 or § 982.

But for IRS forfeiture solely under Title 26 (IRC §§ 7301–7325), the old old cost-bond rules apply. The IRA manual explains:

9.7.13.8.2 (05-15-2008)

Claim and Cost Bond

Pursuant to 26 USC 7325 and 26 CFR 403.26, any person claiming an interest in the property seized may file a claim and post a cost bond prior to the final claim date.

Although there are no provisions in the Title 26 statutes or regulations for foregoing the filing of a cost bond, there is sufficient case law that allows a claimant to proceed In Forma Pauperis. Internal Revenue Service policy is to afford any potential claimant the maximum opportunity to retrieve their property.

Therefore, the Notice of Intent to Forfeit Letter sent to potential claimants shall reference this proceeding as an option. Form 9365, Application to Proceed In Forma Pauperis, (Exhibit 9.7.13-2) will also be included with the forfeiture letter.

The sureties of a cost bond must meet these requirements:

The bond amount shall be in the amount of $2,500.

The bond must be conditioned that in the case of condemnation of the property seized, the obligors shall pay all the costs and expenses of the proceedings to obtain such condemnation.

The bond may be in cash, certified check, cashier’s check, postal money order, or satisfactory surety bonds. Checks and money orders are to be made payable to the Internal Revenue Service.

United States bonds, notes, or other obligations on which the interest and principal are unconditionally guaranteed by the United States (US bonds which are not transferable are not acceptable, see Treasury Department Circular 154 and 31 CFR Part 225) are also acceptable.

A corporate surety bond may be filed only if the surety company issuing the bond holds a Certificate of Authority from the Secretary of Treasury as being an acceptable surety. Corporate surety bonds are subject to the limitations prescribed by Treasury Department Circular 570, as amended.

If a claim is received, it should be forwarded to Area Counsel, who will review the matter, and, if required, will forward it to Division Counsel.

Additional Resources

IRS’s Office of Cyber and Forensic Services  – Established in 2021, the IRS’s Office of Cyber and Forensic Services (CFS) is part of the IRS Criminal Investigation (IRS-CI) unit that investigates tax and financial cybercrimes involving cryptocurrency and other digitial assets.

IRS Seizure and Forfeiture Official Notices – Visit the Internal Revenue Service (IRS) section on the forfeiture.gov website to find notices of property seized for federal forfeiture for violation of federal law in compliance with 18 U.S.C. Section 981. Verified claims for court action must be filed as required in the notice which might include submitting the claim referencing the AFTRAK ID Number to the Internal Revenue Service, IRS Criminal Investigation – ARIS, 1111, Constitution Avenue, NW, Room 2212, Washington, DC 20224, Attn: Asset Recovery or claims@ci.irs.gov.

IRS named Jarod Koopman to lead IRS-CI – The IRS recently named Jarod Koopman as its Acting Chief Tax Compliance Officer, overseeing IRS employees in its enforcement divisions including the IRS Criminal Investigation. He formerly led the development of the Cyber Crimes and Cyber and Forensics Services sections.

This article was last updated on Friday, October 10, 2025.