IRS Seizing Bank Accounts of Innocent Americans

The Internal Revenue Service has been seizing money from the bank accounts of individuals and businesses with no proof of any crimes nor any charges filed.

Now, the IRS claims that it will stop — but will it?



Using a law, the Civil Asset Forfeiture Reform Act of 2000, that allows the feds to seize money from suspected gangsters, drug dealers and terrorists, the IRS has put innocent people into bankruptcy and massive debt and taken the money a military father saved from his paychecks to put his kids through college, solely by tracking the amounts that people put into their bank accounts.

When no criminal activity is charged, The New York Times reports, the IRS often negotiates to return only part of the seized money, leaving impoverished citizens with little option but to either accept the IRS’ offer or continue a lengthy and very expensive legal battle to try to get their legitimately earned money back.

The problem has been growing. The Institute for Justice estimates that from just 114 seizures in 2005, the IRS made 639 seizures in 2012, and in only 20 percent of the cases were any criminal charges ever pursued.

Under the Bank Secrecy Act, banks report transactions larger than $10,000 to federal authorities, but also report a pattern of regular, smaller deposits which appear designed to get around the act. This alone can be enough to trigger a seizure, the Times reports, and banks filed over 700,000 “suspicious” reports last year.

One involved a 27-year-old Long Island candy and cigarette distribution company, Bi-County Distributors, which made daily cash deposits, usually under $10,000. When the IRS seized $447,000 from the company, it refused to return it, despite the fact that there was no crime to prosecute, and instead offered a partial settlement.

The company is now $300,000 in debt and attorney Joseph Potashnik told the Times, “I don’t think they’re (the IRS) really interested in anything. They just want the money.”

Army Sgt. Jeff Cortazzo was saving up for his daughters’ college education when the IRS seized $66,000 of his money – it cost him $21,000 to get the remainder back.

Richard Weber, the chief of Criminal Investigation at the IRS, said in a written statement in response to the Times story, “After a thorough review of our structuring cases over the last year… IRS-CI will no longer pursue the seizure and forfeiture of funds associated solely with ‘legal source’ structuring cases unless there are exceptional circumstances justifying the seizure and forfeiture and the case has been approved at the director of field operations (D.F.O.) level.”

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  • IRS Finally Promises to Stop Stealing Innocent People’s Money

    The New York Times finally got around to contacting the IRS about the IRS’s long-time practice of stealing money out of people’s bank accounts — people who have committed no crime.
    This is part of the civil asset forfeiture program. The government agency — federal, state, or local — seizes your money. You are never prosecuted by the agency for having committed a crime. The agency keeps the money.
    The Times reports:
    Under the Bank Secrecy Act, banks and other financial institutions must report cash deposits greater than $10,000. But since many criminals are aware of that requirement, banks also are supposed to report any suspicious transactions, including deposit patterns below $10,000. Last year, banks filed more than 700,000 suspicious activity reports. Owners who are caught up in structuring cases often cannot afford to fight. The median amount seized by the I.R.S. was $34,000, according to the Institute for Justice analysis, while legal costs can easily mount to $20,000 or more.
    Got that? Only $34,000. These are little people, not organized criminal syndicates. They can’t afford to fight back. The money is chump change. The government runs a $500 billion annual deficit, and the IRS is stealing $34,000 per heist. It’s just some agent meeting his quota. Little people get stung.
    Why don’t the banks warn the depositors to stop this? Because it’s illegal for them to warn depositors.
    Sweat deal for the IRS, right? It was for a long time.
    At this point, an IRS official has decided to stop the practice. He will send a memo to this effect, he promises. From now on, people must be charged with a crime when the IRS seizes their money. But the IRS did not cease this practice until facing media exposure by the Times.
    This is America, the land of the free. You read it in your government-run high school civics textbook.

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