Department of Taxation and Finance

Office of Tax Enforcement: Management of Seized Assets

The Office of Tax Enforcement is responsible for investigating tax fraud in the area of petroleum, alcohol and tobacco excise taxes. These taxes exceed $1 billion a year. Pursuant to the Tax Law, during fraud investigations, the Office confiscates petroleum, alcohol and tobacco products, including the vehicles used to transport these assets. The seized assets are then used as evidence in the prosecution of individuals arrested for evading excise taxes and are stored in evidence rooms and warehouses located around the State. We examined the controls over seized assets and found that the Office did not have adequate controls to properly account for, store and dispose of the assets. For example, the Office did not maintain adequate inventory records or take periodic inventories, and had not developed plans for the sale and disposal of the assets. As a result of these control weaknesses, the assets were more vulnerable to loss and theft. We recommended that controls over seized assets be improved. 95-S-51