Jun 172017

Wash D.C. msn.com

The Internal Revenue Service has seized millions of dollars in cash from innocent people and businesses who obtained the money legally, according to a new Treasury Inspector General’s report. The report covers IRS cash seizures agsint businesses and individuals suspected of deliberately trying to avoid federal reporting requirements for large bank deposits. Most of these individuals were innocent people.

In order to combat criminal activity, individuals and businesses are required to report all bank deposits greater than $10,000 to federal authorities. Intentionally splitting up large sums of cash into sub $10,000 amounts to avoid that reporting requirement is known as “structuring” and is illegal under the federal Bank Secrecy Act. But many business owners engaged in perfectly legal activities may be unaware of the law. Others are covered by insurance policies that don’t cover cash losses greater than $10,000. Still others simply want to avoid extra paperwork, and keep their deposits less than $10,000 on the advice of bank employees or colleagues.

While structuring is technically a crime, it’s something of a secondary one. The reporting requirments were enacted in order to detect serious criminal activity, such as drug dealing and terrorism. They “were not put in place just so that the Government could enforce the reporting requirements”, as the Inspector General’s report puts it. But according to the report, that’s exactly what happened at the IRS in recent years The IRS pursued hundreds of cases from 2012 to 2015 on suspicion of structuring, but with no indication that it was related to any criminal activity. Simply depositing cash in sums of less than $10,000 was all that it took to arouse agents suspicion, and the eventual seizure and forfeiture of millions of dollars in cash from people not otherwise suspected of criminal activity. Many innocent people were swept up in this probe.

The Inspector General took a random sample of 278 IRS forfeiture actions in cases where structuring was the primary basis for seizure. The report found that in 91 percent of those cases, the individuals and business has obtained their money legally.


  •  06/17

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