After Years of Criminal Behavior, the IRS Finally Gets a Slap on the Wrist

Photo Credit:Flickr/TravelingOtter
Photo Credit:Flickr/TravelingOtter

The IRS has literally stolen millions of dollars from unsuspecting business owners and individuals who were unaware they were targeted simply for making bank deposits. The IRS gets a minor slap on the wrist. And all this crime against American taxpayers gets is what appears to be an insincere “I’m sorry” from the IRS.

The IRS routinely freezes and seizes bank accounts of people who habitually make a series of deposits in short time frames that add up to $10,000 or more.  The Bank Secrecy Act obligates all financial institutions to flag accounts where this type of behavior occurs. Whether the account holder has ever been involved in tax evasion, drug smuggling and terrorist activities or not the accounts are flagged. Then, the IRS can freeze the accounts and seize the assets without ever charging the account holder with a crime.  Small business owners have been ruined as a result of this Civil Assets Seizure Program (aka Bank Secrecy Act). So who’s the real criminal?

It happened to a former Marine in Georgia who served three tours in Iraq. It happened to a convenience store owner in Queens. Both were innocent and unaware that they were doing anything illegal when making their deposits.

The Associated Press reported that Andrew Clyde is the former Marine who owns a gun shop and made a series of cash deposits between May 2012 and March 2013 totaling just under a million dollars. He made these deposits because he had an insurance policy that only covered losses of up to $10,000 if they happened outside his store. For that reason he didn’t want to carry $10,000 to the bank, so he made deposits less than $10,000. As a result, his accounts were frozen and all his assets seized by the IRS. And, they never charged him with a crime. In fact, the IRS didn’t have to prove Clyde was guilty. However, Clyde did have to prove he was innocent.

Finally, someone is realizing this program has turned the IRS into the criminal. In a recent Associated Press report, Stephen Ohlemacher writes that “The Treasury inspector general for tax administration is launching an audit of the IRS’s seizure program, said Rep. Peter Roskam, R-Ill., chairman of the Ways and Means oversight subcommittee…Roskam said the IRS has too much power to seize assets, even if the agency doesn’t have adequate evidence of a crime.”

As the article goes on to explain, “Pressured by Congress, the IRS said Wednesday (February 11, 2015) it is changing its policies and apologizing for seizing banks accounts from otherwise law-abiding business owners.” In addition, it states, “IRS Commissioner John Koskinen told Congress that the IRS is changing policies to prevent the seizures, as long as the money came from legal means.” But here’s the million-dollar question. How will the IRS determine whether the money in an account came from legal means when they don’t know where the money comes from in the accounts they currently seize?  Hmm. If you are a small business owner, I advise doing whatever you can to avoid becoming a target of this ridiculous program. The terrorists, tax evaders and drug smugglers are clearly onto the program since they are rarely, if ever the ones snared.