No Bonuses for Forfeiture Abuse

Many people grew up hearing that crime doesn’t pay. It sometimes seems the Internal Revenue Service didn’t get the message, but recently the U.S. House of Representatives moved to bring federal law into closer compliance with that childhood ideal.

House lawmakers unanimously approved amendment from Rep. Peter Roskam to a must-pass appropriations bill would prevent the bureaucrats working in the asset forfeiture section at the Department of Justice from getting any bonuses until they deal with a years-long backlog of petitions from property owners seeking the return of forfeited property. After the Institute for Justice (IJ) successfully petitioned the IRS and DOJ to return money wrongfully confiscated from entrepreneurs Randy Sowers and Ken Quran, hundreds of property owners began filing their own petitions to recover assets that had been taken under so-called “structuring” laws.

Structuring is the alleged “crime” of repeatedly withdrawing or depositing cash in amounts under $10,000—the minimum to trigger federal reporting requirements—in order to circumvent those requirements. And under federal civil forfeiture laws, government agents are empowered to take cash from innocent people who haven’t even been charged, let alone convicted, of any crime. The agencies can then keep and spend the cash to supplement their budgets.

As IJ observed:

Rep. Roskam reported in July that the IRS reviewed 454 petitions for the return of property forfeited under the structuring laws and returned more than $6 million to property owners. The agency also transferred 250 petitions to the Department of Justice for review, but the DOJ has only acted on 73 petitions. The Justice Department approved returning money in just 32 percent of cases—well below the IRS’ recommendation of 80 percent.

Earlier this month, the House unanimously voted to pass the RESPECT Act to stop the Internal Revenue Service from raiding the bank accounts of small-business owners. The Roskam amendment would strengthen that reform by somewhat reversing the incentive structure. Instead of profitting by taking cash from innocent people, IRS agents would be liable to lose income for not returning it.

In the private sector, ordinary people tend to lose their jobs—rather than secure multiple bonuses—for not doing their work. In the case of forfeiture agents, failure to do their taxpayer-funded jobs means hardworking taxpayers are unfairly deprived of their own hard-earned money.

“We are not asking the Department of Justice to do anything extraordinary,” Rep. Roskam said when he introduced his amendment on the House floor. “We are simply asking them to do their job, the bare minimum that taxpayers can expect is that we at least don’t reward these people with bonuses.”

Under the current status quo, federal agents have dragged their feet responding to requests to return wrongfully taken cash from innocent people. Federal lawmakers have now taken a small step to remedy this injustice.

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