Posted on 10/29/2014 9:01:24 AM PDT by SeekAndFind
The Internal Revenue Service has seized the bank accounts of hundreds of innocent business owners.
Using the powers granted under the Civil Asset Forfeiture Reform Act of 2000, which was designed to help federal agencies catch drug dealers, terrorists and other criminals, the IRS has been legally seizing the bank accounts of law-abiding business owners who have consistently made cash bank deposits less than the federal bank reporting minimum of $10,000.
The New York Times reported that hundreds of these cash-only business had their entire bank accounts seized by the IRS in the past few years because the agency is permitted, through the process of civil asset forfeiture, to seize assets out of suspicion when a pattern of sub-$10,000 cash deposits are made.
The law grants the IRS ability to claim that when a person makes frequent small deposits into their own bank account that they are, with criminal intent, trying to avoid the federal requirement that forces banks to report cash transactions of $10,000 or more. This is a process the IRS calls structuring. Thus, the IRS is allowed to seize bank accounts of people accused of structuring without them being charged or convicted of any particular crime.
Many small, cash-only businesses often make small deposits, however, to avoid keeping large amounts of cash.
Structuring data from the IRS analyzed by The Institute for Justice, a public interest law firm representing business owners who have had their assets seized by the IRS, shows that only one in five IRS seizures are actually prosecuted as criminal structuring cases. The Institute for Justice also found that in 2012 the IRS made 639 seizures, which is up from 114 seizures in 2005. The data also shows that the median amount of the IRS's seizures was $34,000.
Institute for Justice attorney Larry Salzman said in a recent Institute for Justice web video on civil asset forfeiture that even though people may have done nothing wrong and had their bank accounts seized by the IRS, the process of civil asset forfeiture "turns the principle of 'innocent until proven guilty' on it's head."
Salzman said that that in order for people to get their assets returned from the IRS, they need to prove their innocence through a court process that can take over a year on average, and sometimes longer.
Salzman added that many victims cannot afford lawyers, as the legal process can cost up to $20,000, and they give up on getting their property back, while others are "coerced" into settlements with the IRS and don't get all of the money back that was seized.
"Once your property is taken, it is up to you to prove your own innocence to get it back in expensive litigation against the federal government," Salzman said.
Salzman represents Carole Hinder, an owner of a cash-only restaurant in Iowa called Mrs. Lady's Mexican Food, which she has run for over 38 years. Hinder often made cash deposits because she did not like having too much cash in her restaurant. But in August of 2013, the IRS seized her entire bank account, which totaled nearly $33,000.
In the Institute for Justice video Hinder claims that she had made deposits at her bank for over 30 years and was never alerted that she would get in trouble if she placed deposits of less than $10,000. But one day, Hinder said, two IRS agents arrived at her door to inform her that her bank account had been seized because of structuring. Although she had to resort to borrowing from friends and family, and using a credit line, she said she will fight the IRS to get her money back.
"It's been a year from hell," Hinder said. "I've decided to fight this fight because I didn't do anything wrong. They took my money and I don't think they should have the right to do that. At least, they should have to prove that I did something wrong before they take my money. I want to stand up for it because I don't want it to keep going on."
Salzman also represents the Hirsch brothers of Long Island, New York. They are three brothers who run a small snack food distributing company called Bi-County Distributors, Inc. The IRS seized the company's bank account which totalled upwards of $446,000 because the brothers, who handle many cash transactions, made frequent cash deposits less than $10,000.
The seizure put the company in a tailspin until the brothers were able to secure lines of credit, with one credit vendor lending them over $300,000. The brothers say they are going to fight the IRS all the way to the end of their case and have already turned down one IRS settlement offer.
The Times also reported that the IRS seized $66,000 from Army Sgt. Jeff Cortazzo of Virginia. Cortazzo avoided his prolonged legal battle by forking over $21,000 of his own seized money in a settlement with the IRS.
In a statement the New York Times, the IRS says that it will "curtail" this practice and will seize money only in cases where the agency fully believes the money was acquired illegally or when it is deemed justified by "exceptional circumstances."
In July, Rep. Tim Walberg, R-Mich., introduced the Civil Asset Forfeiture Reform Act of 2014, which would require government agencies to provide proof of criminal wrongdoing before they can seize property. As The Blaze pointed out, the legislation may have trouble passing both the Senate and the House.
"This has a tremendous negative impact on our freedoms and the ability to carry on our government the way it's been established according to the Constitution," Walberg said. "That's not what government should be, in the place of being a fearmonger, a producer of fear in the peoples' lives and ultimately, using their power to extract resources for their own benefit."
Sen. Chuck Grassley, R-Iowa, ranking member of the Senate Judiciary Committee, issued a statement Monday saying that the IRS needs to treat businesses fairly and not like criminals.
"The IRS plays a role in fighting money laundering and other criminal activity, but it has to treat business owners fairly," Grassley said. "If the pendulum has swung too far in favor of the government and against fairness for innocent people, then it's time to reform civil asset forfeiture laws and procedures. I plan to look into the government's use of civil forfeiture laws, including the IRS' use, and develop potential reforms where necessary."
CLICK ABOVE LINK FOR THE VIDEO...
“Their goal (other than getting the cash) is to make us go cashless and 100% traceable sales.”
This message brought to you by Visa and MasterCard.
No person shall be … deprived of life, liberty, or property, without due process of law.
The argument is that because there was a law that was passed via congress that satisfies due process of law
.
(I wish I was kidding.)
And it gets better. The IRS now has your medical records.
These forfeitures are more widespread than reported.
The Founders are spinning in their graves wondering why we haven’t used the Second amendment yet...
5.56mm
This isn’t a Democrat/Republican issue, but a statist/libertarian issue.
(And besides, has the Republican party REALLY done anything to stop IRS corruption?)
I think they'd understand:
accordingly all experience hath shewn, that mankind are more disposed to suffer, while evils are sufferable, than to right themselves by abolishing the forms to which they are accustomed.I do think they'd be furious for us by having such a high bar of
sufferable.
maybe a statist/liberty issue
Repeal the 16th amendment, end the income tax and dismantle the IRS. It’s past time to end this totally corrupt government entity and its intrusion on our freedoms.
Uh, that form is for cash RECEIVED ...
Right you are. The depositor doesn't report anything, the Bank has to report cash deposits of $10,000 or more on FinCEN form 112.
Which begs the question, how does the IRS know that a small business is depositing multiple smaller cash deposits if the bank doesn't report it?
I have been a bookkeeper for small businesses since late 1979. I have dome work for landscape materials company, Maytag dealer, engine builder, bakery owner, and a wide variety of other small businesses.
They put you thru hoops for making a deposit of OVER $10,000 and now they seize your bank account for making deposits of under $10,000.
This is just plain nuts.
More & more people are shopping with cash for a variety of reasons. Many are trying to carve down their credit card balances. Some are trying to control their spending in general by only using cash. Particularly senior citizens.
Seizing such monies can only lead to more unemployment, as small businesses have to shut down & lay off their people. The current ‘unemployment’ stats are grossly understated as it is. None of those numbers make any sense when one looks around their own communities.
The IRS is just plain OUT OF CONTROL. We need a Republican Congress to put a stop to this crap.
Wonder if ebola sticks to paper money?”””
Already occurred to me.
Don’t trust one single word coming from this administration about Ebola.
I have been a self-employed bookkeeper for more than 34 years. I set up books for small businesses that are easy to show how each month’s/week’s/ or day’s business was recorded & how the deposits were created.
If a person has a decent bookkeeping system, they should be able to sue the IRS & get them set straight.
I know the IRS takes it’s sweet time responding, but a local reporter can make things happen more quickly.
The bank does report it if it looks like “structuring”. A business can avoid the reporting by filing a form stating intention of multiple deposits.
As a bookkeeper you should advise the business to file with the bank intent of multiple deposits.
Banks and financial institutions are required to be on the lookout for evidence of structuring, among other things, or face huge fines themselves.
I am sure it does..
as well as drugs, poop and other things you don’t want to touch.
while true, the IRS wants every transaction trackable.
a cheap drug runner.
hard to sue the IRS when the IRS has all your money.
What makes you think a Republican congress would address the issue?
Have they addressed any of the following:
Well, according to the fine article: In the Institute for Justice video Hinder claims that she had made deposits at her bank for over 30 years and was never alerted that she would get in trouble if she placed deposits of less than $10,000.
If someone has been using the same bank for over 30 years, then the bank knows exactly what is happening with the account. So either someone at the bank wanted to get even with the business owner, or else this is yet another facet of Operation Choke Point and the Justice Department is leaning on banks to cough up these sort of transactions.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.