A federal law requires that an individual -- often a business owner -- attend to more than a modicum of paperwork following any bank deposit that exceeds $10,000. Such has been the case for a number of years, the rationale for the requirement being the federal government’s stated desire to uncover illegal activities such as tax evasion and money laundering.
Now imagine yourself as an honest and conscientious business owner who seeks to save both time and headaches by making bank deposits of slightly less than that amount.
According to a recent media account on IRS search and seizure activities, here is what has been happening to some of those good-faith business principals: The Internal Revenue Service has simply seized the money in such accounts after receiving bank notifications citing suspicious activity.
For immediately understandable reasons, that has raised the ire of innocent persons who have seen hard-earned money simply disappear, as well as resulted in strong scrutiny and remedial recommendations from relevant investigators.
Those investigators work for the U.S. Treasury Inspector General for Tax Administration (TIGTA), and they recently issued a report on IRS abuses regarding civil asset forfeiture practices.
Reportedly, a strong spotlight was placed on the Criminal Investigation unit of the IRS following a high-profile national media story noting irregularities in the manner in which IRS special agents issued search warrants (yes, certain agents have that authority) and carried out asset seizures.
Investigators from TIGTA noted many mistakes in search warrants and in properly accounting for and securing assets following seizure. A number of best-practice recommendations were made by the administration, which IRS officials say they agree with and implement.
In responding to TIGTA, the IRS noted that it is “in the process of working on an improved system” that will result in better procedures and outcomes regarding search and seizure matters.