The following policy is meant to ensure consistent national treatment of the payment of interest and penalties on state and local taxes on forfeited real property:

1. A. The United States will pay interest but not penalties on overdue taxes;
2. B. The formula for the rate of interest is set forth in 28 U.S.C. § 1961(a);
3. C. Higher rates of interest may be paid where the taxing authority has incurred out-of-pocket interest expenses in excess of the rate specified by 28 U.S.C. § 1961(a), e.g., where tax certificates have been sold to private investors;
4. D. United States Attorneys, with the concurrence of the Money Laundering, Narcotics and Forfeiture Section (MNF), Criminal Division, may agree to a higher rate of interest provided that such higher rate is not punitive; and
5. E. Taxes and interest thereon may only be paid up to the amount realized from the sale of the property. SeeChapter 4 of the Asset Forfeiture Policy Manual ("Payment of Interest and Penalties on State and Local Real Property Taxes").

[updated January 2026]