Did You Know the IRS Has Permission to Steal From Small Businesses?

Have you ever made a series of deposits to your business account in a week or two that adds up to $10,000? If you’ve done this on more than one or two occasions, you could be a target on the IRS Civil Assets Seizure list. That’s right, innocent you who has always played by the rules.

The IRS can freeze and seize assets legally without letting you know they are doing so. If checks start bouncing and you know you’re supposed to have money in the bank, you could be in for one of the most unpleasant rides of your life.

Financial Institutions throughout the U.S. have been legally obligated to collaborate with the U.S. Government in helping them identify suspected money laundering, fraud and terrorist activities. The way they help is by filing a variety of forms called a Currency Transaction Report (CTR) or a Suspicious Activity Report (SAR), among others. The banks are obliged to file these reports based on the amount and frequency of a customer’s deposits. The reports are filed secretly without the knowledge of the account holder. If the financial institution alerted the account holder, they would be subject to heavy fines, even imprisonment.

While initially created as a tactic to alert the IRS to criminal activity, the IRS has recently begun to target unsuspecting small business owners throughout the country. The burden of responsibility is not on the IRS to prove criminal activity of the account holder. The burden of responsibility is on the small business owner to prove to the IRS that they are not guilty of criminal behavior or intent. It’s enough to make anyone want to close up shop and has been the ruin of many small businesses. The IRS is not obligated to return the funds even if the business is found innocent. And they never do return the assets. So, even with the best legal representation, chances are not in your favor.

The Bank Secrecy Act and “civil asset forfeiture” are two areas that many small businesses are completely unaware of that could lead to serious repercussions. So, keep this law in mind as you do your business. Under 31 USC 5324, which states: if a person’s “transaction could have been conducted as a single transaction and that person took actions to break it up to avoid a currency transaction report,” he is considered to be in violation of the law.  According to the Bank Secrecy Act of 1970, “Any persons who receive more than $10,000 in one transaction or a series of related transactions, while conducting their trade or business, must file a Form 8300.”

When the U.S. Government gives itself permission to legally steal from American businesses there’s something terribly wrong. You can kiss your money and very often your business good-bye. So far no one who has tried to take the IRS to task has won. Just be mindful of how and when you make deposits into your business accounts. Avoid making multiple deposits adding up to $10,000 or more in less than a month’s timeframe.