Thanks to federal civil forfeiture laws, the Internal Revenue Service has seized millions of dollars from thousands of Americans’ bank accounts without proof of criminal wrongdoing. The IRS claimed the funds were illegally “structured”—deposited or withdrawn in small amounts to evade federal reporting requirements imposed on banks—and simply took the money. The IRS practice of “seize first, question later” highlights the need for broad reform to federal civil forfeiture laws that impose substantial burdens on property owners and make seizing property—and profiting from it—too easy for law enforcement.
According to IRS data obtained by the Institute for Justice:
From 2005 to 2012, the IRS seized more than $242 million for suspected structuring violations in more than 2,500 cases, and annual seizures increased fivefold over those eight years.
At least a third of those cases arose from nothing more than a series of cash transactions under $10,000, with no other criminal activity alleged.
Four out of five IRS structuring-related forfeitures were civil, not criminal, so the IRS faced a lower evidentiary standard and did not need to secure a conviction to forfeit the cash, and owners had fewer rights in fighting to win it back.
Owners likely face a long legal battle to win their money back: The average IRS structuring-related forfeiture took nearly a year to complete.
Nearly half of the money seized by the IRS was not forfeited, raising concerns that the IRS seized more than it could later justify to forfeit the cash.
Civil forfeiture allows the IRS and other law enforcement agencies to take cash and property without charging, let alone convicting, the owner of any crime. The IRS’s track record with structuring seizures is a vivid example of how federal civil forfeiture law stacks the deck against property owners.
The IRS took more than $29,000 from Maryland dairy farmers Randy and Karen Sowers simply because they deposited money in the bank in amounts under $10,000. Although the IRS changed its policies to stop such forfeitures in the future, that change came too late to help people like Randy and Karen, whose money was seized…
Arlington, Va.—It is a major victory for the individual against the seemingly all-powerful IRS. In a single-page letter, sent this morning by fax, the IRS agreed to return a North Carolina convenience store owner’s entire life savings. The IRS seized $153,907.99 from Ken Quran in June 2014, without any warning or meaningful prior investigation, simply…
Arlington, Va.—Thanks to federal civil forfeiture laws, the Internal Revenue Service has seized millions of dollars from thousands of Americans’ bank accounts without proof of criminal wrongdoing, according to anew report from the Institute for Justice (IJ). The IRS practice of “seize first, ask questions later” highlights the need for broad reform of federal civil…