Earlier this week, Maryland dairy farmer Randy Sowers learned he would get back the money that the IRS wrongly seized from him four years ago. Sowers petitioned the IRS, using a legal mechanism pioneered by the Institute for Justice.
IJ Attorney Robert Everett Johnson, who represented Sowers and joined him in appearing before the House Ways and Means Oversight Subcommittee to discuss this form of civil forfeiture, hailed this development as a major victory. He told The Baltimore Sun:
“If the IRS and Justice Department are willing to do the right thing for Randy, there is no reason why they should not do the same for hundreds of other property owners in exactly the same situation. Today’s decision opens a way for other victims of the structuring laws to get back what’s rightfully theirs.”
When law enforcement seizes money via civil forfeiture, the money is directed into a special federal fund, which IRS then uses to fund further law enforcement activities. This creates an incentive for the IRS to seize as much money and property as possible, even if the property owner has not necessarily done anything wrong.
Johnson and IJ Communications Associate Nick Sibilla wrote an op-ed for Reason this week summarizing the problems presented by “structuring” laws and progress made be the IRS’s decision to give back what was unjustly taken.
“Like hundreds of other Americans, Sowers was targeted because he had run afoul of a sprawling government surveillance program aimed at the nation’s financial system. Federal law requires banks to report all cash transactions over $10,000 to the federal government. Federal law also makes it a crime, called structuring, for bank customers to deposit or withdraw cash in amounts under $10,000 in order to avoid that reporting requirement.
Because these cases are brought against the property in question—the Sowers’ case was captioned United States v. $62,936.04 in U.S. Currency—protections that govern criminal proceedings do not apply. Owners of “guilty” property have no right to counsel. Without ever having to secure a criminal conviction (or even file charges), the federal government is excused from its obligation to prove guilt beyond a reasonable doubt. Officials can seize property based on mere suspicion of a crime and effectively force property owners to prove their own innocence to get it back.”