IRS “Structuring” Victims: Get Your Seized Money Back

Hundreds of Americans who had money wrongly taken by the IRS because they made bank deposits or withdrawals in amounts under $10,000 now have the opportunity to get their property back. Thanks to a legal mechanism pioneered by the Institute for Justice—the use of petitions to the IRS to reopen closed civil forfeiture cases—victims of so-called “structuring” laws now have a path to reclaim what is rightfully theirs.

Now, IJ is launching a new effort to provide resources to help property owners file their own petitions with the IRS, including a template that can be used to draft a petition and links to previous petitions filed by IJ.

The IRS changed its policies in October 2014 to limit application of the structuring laws to real criminals seeking to conceal their ill-gotten gains. Now, the IRS has indicated that it may be willing to apply that policy change retroactively to return money to property owners who had their money seized before the policy change. Earlier this month, the IRS announced that is sending notifications to 700 property owners who had their assets seized between October 2009 and October 2014, informing them of their right to file petitions for the return of their property. So far, the IRS states that it has considered over 75 petitions and granted 17.

In an op-ed for Forbes this morning, IJ Communications Associate Nick Sibilla highlighted IJ’s history taking on structuring laws through litigation and research, and how IJ encouraged the IRS to finally do the right thing. The piece underscored the struggle of former IJ clients like Randy Sowers, a farmer who recounted his experience at a hearing before the House Ways and Means Oversight Subcommittee last month. Sibilla writes:

One such business owner is Randy Sowers, who owns and operates a dairy farm in Maryland. Testifying before Congress, Randy recounted his four-year-long battle against an IRS seizure. In 2012, two armed IRS agents descended on the farm and told Randy the agency had seized over $60,000 from the farm’s bank account. They also served him with a grand jury subpoena, raising the possibility that Randy and his wife could face criminal structuring charges. Facing potentially enormous legal bills if they fought the IRS, the Sowerses felt they had no choice other than to take a settlement deal and so agreed to forfeit $29,500 to the government.

Randy has yet to get his money back.

Click here for the resources for structuring petitions page.

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