Being a good samaritan can be so much work!

David Repp Iowa Tax Law Dickinson Law Des Moines, Iowa

Posted on 01/03/2017 at 07:31 AM by David Repp

On December 21st, the shortest day of the year (and four days before the biggest economic holiday of the year), the temperature hit 50 degrees and I wanted to get out of the office. I generally don’t go out shopping that early in the season; I usually wait at least until the 23rd. But that day was different. So, I went to Best Buy to look at electronics. That may be a guy thing. 

I parked next to an empty stall and hopped out of the car. I’m not sure why I was looking down, but I did and saw a sparkle which I knew could not be snow on a warm afternoon. That sparkle was a diamond ring. At first I thought it was a cheap replica of a diamond ring because why would it be in a parking lot? I picked it up and started walking away when I spotted the companion ring. This was a very nice diamond engagement ring and wedding band. I looked around the parking lot and saw no one who might be the owner. I felt empathy for the person who lost it, especially during the holiday. I thought to myself: “If you lost valuable jewelry, what would you do to try and find it?” The obvious answer is that I would retrace every step of my day which logically would lead me back to the Best Buy parking lot. So, I went into Best Buy and made a report of the jewelry with management and gave them my contact information. 

On my way back to the office, I thought about what else I could do. I contacted the Des Moines Register and learned that I could run a FOUND ad for free, so I did. I was careful not to describe it too carefully; I want the owner to fill in the details to me. 

I then recalled from law school that I may have a legal obligation. Sure enough, a quick search led me to Chapter 556F of the Iowa Code on lost property. Section 556F.6 instructs me that if the lost property is worth more than $5.00, I am to inform the owner that I have her stuff. That is not very helpful. Section 556F.7 is a little more helpful. It says that if I do not know the owner, I am supposed to provide an affidavit to the county sheriff or local police department within five days providing them the description of the property, when and where it was found along with my attestation that I have not altered the property. I don’t have to give the authorities the property; I only have to give them the affidavit. Then, the authorities are required to give the affidavit to the auditor who reports it in his or her lost property book. There is more.

Section 556F.8 says that I am required to give written notice of the lost property by posting it on the door of the courthouse and “one other of the most public places in the county.” Hmm. I am very familiar with the Polk County Courthouse and I suspect if I tried to tape a notice to the door, I may be arrested for littering. I am grateful to the Iowa Code to allow me to pick the other “most public place.” But oh, which to choose? Wells Fargo Arena? I-235?

Section 556F.8 also says I am required to publish notice of the lost property once a week for three consecutive weeks, but only if the property is worth more than $40. I am feeling a little burdened now. At least the Register let me do this for free. However, after publishing I am required to acquire an affidavit from the Register that they in fact did publish notice for three weeks. The affidavit must be given to the auditor and the auditor must make it known to the County Supervisors to be published as part of their regular proceedings. 

If after 12 months, no one has claimed the rings, then I am rewarded with full right and title to the property. But I don’t want the property; I want to return the property to the rightful owner. That would be my reward. Section 556F.13 provides that if the owner does come forth, he or she (probably a she – correct?) has to give me a reward equal to ten percent of the value of the rings. I will gladly waive the reward.  

Complying with Chapter 556F is challenging enough, but it gets worse. Section 61 of the Internal Revenue Code says that I have to report the value of the rings as income. But do I report it in 2016 income or some later year. Treasury Regulation 1.61-14(a) says that I have to include it in my income when it is reduced to my undisputed possession. I interpret this to mean that when the 12 months expire, I then have to report it in my income. This probably means 2017 if I fail in locating the true owner.

I will try to comply with Chapter 556F and the Tax Code, but this Good Samaritan work is quite a burden.   

The material in this blog is not intended, nor should it be construed or relied upon, as legal advice. Please consult with an attorney if specific legal information is needed.

- David Repp

Categories: Taxation Law, David Repp


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