IRS Announces Curtailment of Civil Asset Forfeiture Practice
Federal banking regulations require that any deposit in excess of $10,000 be accompanied with identifying paperwork supplied by your bank and submitted to the U.S. Treasury. Making a series of deposits purposely under the $10k threshold is called "structuring" and it is illegal.
This is the realm of a little known but powerful unit within the IRS: the Criminal Investigations unit. A federal law designed to catch major drug dealers and terrorists based on their financial activity has apparently, according to Sunday's NYT, devastated some small business owners and ordinary folks over the past 18-months.
Unlike other crimes that involve forfeiture, however, the law empowering the IRS to seize your funds does not require the IRS, or the Department of Justice, to charge you with a specific crime. As for getting your funds returned; best of luck to you. Be prepared to hire specialized legal counsel.
The NYT article detailed at least three examples of regular ordinary folks that, for legitimate reasons, made a series of deposits just under the $10,000 threshold, only to have their accounts seized and not returned; at all. When some of the data was shown to CI's chief, Richard Weber, he agreed to curtail the IRS seizures by focusing only on those cases involving criminal acquisition of the deposited cash, issuing a written statement:
This policy update will ensure that C.I. continues to focus our limited investigative resources on identifying and investigating violations within our jurisdiction that closely align with C.I.'s mission and key priorities.Cases involving "exceptional circumstances" will also continue to be targeted, as before. So, per usual, the power remains in the hands of the IRS.
We here at the Law Blogger are never comfortable with statutes designed to catch one type of criminal -in this case, folks purposely attempting to evade federal detection of their ill-gotten gains- but which sweeps up law abiding hard-working individuals in its net. Also, laws that allow government seizures without bringing a formally charged crime to which people can assert valid defenses are always suspect due to their potential for misapplication, as in the cases detailed in the NYT.