Institute for Justice · June 29, 2016

Arlington, Va.— In a development that paves the way for the government to return millions of dollars wrongly seized through civil forfeiture from hundreds of individuals and small businesses, the federal government announced today that it will return $29,500 seized from Maryland dairy farmer Randy Sowers.

The IRS seized Randy’s money in February 2012 without any warning or meaningful prior investigation, simply because Randy and his wife deposited cash in the bank in amounts under $10,000. They earned the money selling milk and other dairy products at farmers’ markets.

Randy’s money was seized under so-called “structuring” laws. These laws were designed to target criminals evading bank-reporting requirements. But under IRS and Justice Department policies at the time of the seizure, the government applied the structuring laws to seize cash from individuals and businesses accused only of frequent under-$10,000 cash transactions.

The IRS changed its policies in October 2014 to prevent such seizures, and the Justice Department followed suit in March 2015. But those changes came too late for people like Randy, whose property was seized before the policy change.

So, in July 2015, the Institute for Justice submitted a petition to the Justice Department and the IRS on Randy’s behalf, arguing that the government should apply its new policies retroactively to Randy’s case. The petition argued that the money “would not be seized—much less forfeited—under current government policy” and urged the government to “do the right thing and give the money back.”

A bipartisan coalition of Members of Congress sent a letter in support of Randy’s petition, and Randy appeared on two separate occasions—most recently, in May 2016—to testify before the House Ways and Means Oversight Subcommittee.

Today’s letter states that Randy’s petition is granted “in the full amount forfeited of $29,500.”

“This is exactly what we wanted,” said Randy Sowers. “I hope they give other people’s money back. And beyond that I just hope they quit taking people’s money.”

Just weeks ago, in response to public pressure generated by Randy’s petition, the IRS announced that it was sending letters to over 700 property owners who had money seized under the structuring laws to notify them of their right to file similar petitions to get their money back.

According to data obtained by the Institute for Justice from the IRS via the Freedom of Information Act, the IRS forfeited about $43 million in 618 structuring cases between 2007 and 2013 in which the IRS reported no suspicion of criminal activity other than the mere fact of sub-$10,000 cash deposits.

“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,” said IJ Attorney Robert Everett Johnson, who represented Randy in filing his petition. “Today’s decision opens a way for other victims of the structuring laws to get back what’s rightfully theirs.”

In an effort to help other victims of the structuring laws, the Institute for Justice has put together a page of resources—including a template petition similar to the one filed on Randy’s behalf—that property owners can use to file their own petitions with the IRS.

“Today’s decision shows what you can accomplish with the courage of your convictions and the force of justice on your side,” said IJ Attorney Darpana Sheth, who heads IJ’s forfeiture initiative. “We asked the government to do the right thing, and the government agreed.”

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