Paul L. Caron

Thursday, April 6, 2017

TIGTA:  91% Of Taxpayers Whose Bank Accounts Were Seized By The IRS Had Acquired The Cash Legally

TIGTAThe Treasury Inspector General for Tax Administration yesterday released Criminal Investigation Enforced Structuring Laws Primarily Against Legal Source Funds and Compromised the Rights of Some  Indiviuals and Businesses:

The Currency and Foreign Transactions Reporting Act of 1970, referred to as the Bank Secrecy Act, requires U.S. financial institutions to file reports of currency transactions exceeding $10,000. ... In October 2014, a new policy was instituted by IRS Criminal Investigation (CI) that it would no longer pursue the seizure and forfeiture of funds related to legal source structuring. In the same month the policy changed, the New York Times reported that CI had been seizing funds in structuring investigations without filing a criminal complaint. Property owners were left to prove their innocence, and many gave up trying. This audit was initiated to evaluate the IRS’s use of seizures against property owners suspected of structuring transactions to avoid Bank Secrecy Act reporting requirements.

Most of the seizures for structuring violations involved legal source funds from businesses. While current law does not require that the funds have an illegal source (e.g., money laundering or criminal activity other than alleged.

Washington Post, The IRS Took Millions From Innocent People Because of How They Managed Their Bank Accounts, Inspector General Finds:

The IRS pursued hundreds of cases from 2012 to 2015 on suspicion of structuring, but with no indications of connections to any criminal activity. Simply depositing cash in sums of less than $10,000 was all that it took to arouse agents' suspicions, leading to the eventual seizure and forfeiture of millions of dollars in cash from people not otherwise suspected of criminal activity.

The IG took a random sample of 278 IRS forfeiture actions in cases where structuring was the primary basis for seizure. The report found that in 91 percent of those cases, the individuals and business had obtained their money legally.

Gov't Reports, IRS News, Tax | Permalink


This probably falls into civil forfeiture laws, but I think we need an amendment protecting cash:

"Congress and the States shall not set limits on the amount of cash that can be withdrawn from a financial institution, the amount on hand, or the amount leaving the country."

- A New Constitution For A Free People

Posted by: Serket | Apr 9, 2017 12:44:21 PM

So the IRS uses its legislative powers to require banks to report all transactions at, above or below $10,000. Then the IRS uses its judicial powers to seize funds that might possibly have been improperly structured. No trial necessary and guilty until proven innocent.

Administrative Law; don’t you just love it?

Posted by: MSO | Apr 8, 2017 3:47:53 PM

This has been going on for a long time. As far back as the '70s, the DEA used to take the IRS on dope busts so it could seize the money.

Posted by: Dale Spradling | Apr 8, 2017 12:39:46 PM

Of course, the IRS knows that it is not uncommon for a business to have cash receipts under $10,000 in a day. So you have cash receipts for three days of $6,000, $5,000, and $7,000, and you deposit those receipts in your bank at the end of each business day, and they can steal your money for the crime of "structuring", when all you're doing is putting your money in the bank, where it is safe from theft, as soon as you can.


Posted by: MPH | Apr 8, 2017 8:47:41 AM

When is this abusive program going to end. This is out and out theft by the government.

Posted by: Chris Hendrickson | Apr 8, 2017 5:15:30 AM

"Government is simply the name we give to the things we choose to do together." --Barney Frank

Posted by: Andrew Myers | Apr 7, 2017 3:40:33 PM

So the IRS considers it "suspicious", when a business doesn't want to waste their time and money, on bureaucrat generated paper work?

Posted by: Mike Giles | Apr 7, 2017 3:21:50 PM

So, do they get their money back? And will anybody at the IRS get spanked?

Posted by: Michael R Becker | Apr 7, 2017 2:57:18 PM

Not only end the policy - we need to prosecute those people who glibly and irresponsibly seized citizens' assets without any real suspicion or due process. Put those thugs in jail.

Posted by: Tom | Apr 7, 2017 2:56:09 PM

What about this data is inconsistent with the thesis that the system is working as designed.

Posted by: Pettifogger | Apr 7, 2017 2:46:15 PM

This policy has simply got to end. It's a horrific abuse of authority.

Posted by: ruralcounsel | Apr 6, 2017 4:02:35 AM