IRS Seizes Money and Property without Criminal Charges
The Internal Revenue Service (IRS) uses civil forfeiture to seize millions of dollars from Americans who haven’t been charged with a crime, according to the group Injustice for Justice.
The libertarian, civil liberties, public interest law firm says in a new report (pdf) that the IRS seized more than $242 million from 2,500 individuals and businesses from 2005 to 2012. The agency was able to take away such vast sums because of “lax civil forfeiture standards” that have permitted the IRS to “seize first and ask questions later.” As a result, people have had their bank accounts drained without the IRS putting any effort into investigating the situation. Property owners are then forced into a difficult legal battle to reclaim their money.
Many of the seizures come because the IRS suspects someone is “structuring” bank transactions in order to avoid a $10,000 limit over which a transaction must be reported to the IRS. Structuring is also illegal and the IRS has the power to use civil forfeiture to seize assets it believes are involved in such a scheme.
Most IRS seizures are civil forfeiture, in which the item seized is considered to be “guilty.” Under criminal forfeiture, assets may only be seized if their owner is found guilty of a related crime. The standard to make a civil forfeiture is much easier for the IRS.
Like civil forfeitures by state agencies recently curtailed by a ruling by Attorney General Eric Holder, the IRS has incentive to continue seizing assets because they’re allowed to keep them to further law enforcement activities by the agency.
Injustice for Justice argues the “surest way to prevent innocent people from losing money unjustly would be to end civil forfeiture and replace it with criminal forfeiture. Short of that, removing the financial incentive to seize, raising the standard of proof to forfeit and enacting other procedural reforms would help protect people from losing their bank accounts when the government has little or no proof of criminal wrongdoing.”
In its report, Injustice for Justice concluded:
· “Structuring-related seizures are becoming more frequent: In 2012, the IRS initiated more than five times as many such seizures as it did in 2005, yielding a 166 percent increase in forfeiture revenue.”
· “The IRS overwhelmingly favors civil forfeiture procedures over criminal. From 2006 to 2013, nearly four out of five forfeitures for suspected structuring were civil.”
· “At least a third of the IRS’s structuring-related seizures arose out of nothing more than a series of transactions under $10,000, with no other criminal activity, such as fraud, money laundering or smuggling, alleged by the government.”
-Noel Brinkerhoff, Steve Straehley
To Learn More:
Seize First, Question Later: The IRS and Civil Forfeiture (by Dick M. Carpenter II, Ph.D., and Larry Salzman, Injustice for Justice) (pdf)
Feds Reel In Asset Forfeitures that Southern California Cops Feast On (by Ken Broder, AllGov California)
Police Departments Like to Seize Fancy Cars and Cash…Computers and Jewelry Not So Much (by Noel Brinkerhoff and Steve Straehley, AllGov)
Across U.S., Police Asset Seizures Fuel ”Slush Fund” for Buying Weapons, Luxury Cars, Travel…and Even a Clown (by Noel Brinkerhoff and Steve Straehley, AllGov)
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