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IRS says it’ll change its ways on civil asset forfeiture

Cruise ships can’t turn on a dime. That makes it dangerous if a passenger falls overboard. It can take an hour for the behemoth to come about and get back to the spot of disaster.

Government is much the same. It’s big and bulky. It usually takes a good deal of time for change to happen. But change can occur, and so it has in the case of the IRS and how it goes about dealing with some civil asset seizures. This may bring back memories for Minnesota readers of our post of June 15.

That item told about a small family bakery in another state from which the IRS seized $68,000 three years ago. The reason given was that the business had made large cash deposits. Significantly, though, the amounts were below $10,000 – the threshold over which the bank would have been required to report the transaction to the government.

No prosecution followed. No charges were filed. Earlier this year, the business got its money back. But then, the federal prosecutor in the region got a grand jury subpoena in an apparent bid to build a case retroactively. Now, news reports say even that has been dropped.

Further, the IRS recently announced that it and the Department of Justice are making changes to end abusive civil asset forfeitures.

These kinds of seizures became permissible under the Civil Asset Forfeiture Act of 2000. The intent was to give authorities leverage going after suspected money laundering by criminals. Critics, though, say the provision led to inappropriate seizures that amounted to theft from small businesses. Two years of complaints and hearings followed.

Last August, lawmakers instructed the government to review past cases and return money taken from legal sources. But as of February of this year, there was no evidence of action.

Then, on June 10, the IRS sent Congress a letter saying it is informing individuals in some 700 asset seizure cases that they have a chance to get their money back. The catch; they have to prove the funds came from legal sources and that the deposits that raised red flags in the first place weren’t made to try to conceal criminal activity. Lawmakers say they’re pleased.

Dealing with the IRS is not easy. It is, however, something that must be done at times. When it becomes necessary, working with a skilled attorney is important.

Findlaw Network


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