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The uncivil nature of civil forfeiture: People, businesses suffer p2

| Nov 12, 2014 | Uncategorized |

In a strange way, our discussion of the law of civil forfeiture in our last post made us think of the expression, “Hate the sin, but love the sinner.” The law allows the IRS to seize the property of a private citizen or a business if the IRS suspects that the property is somehow tied to illegal activity.

For example, that sushi place with the great California rolls only takes cash. The owner goes to the bank every night and deposits the day’s receipts. Some days are better than others, and the deposit runs to just under $10,000. In cash. After a few deposits like that, the owner goes into the bank one day and discovers that the account is empty.

The IRS has seized the money because the large cash deposits looked like the kind of thing that a drug dealer or terrorist would do. If he wants his money back, the businessman must prove to the government not that he is not a criminal, but that the property is not tied to criminal activity — the property is suspect, not the business owner. The IRS takes the “sin,” not the “sinner.”

The New York Times confronted the IRS about the ethics of seizing private property without any evidence of a crime. The IRS responded that the agency would be shifting its focus to unearthing true criminal activity and seizing only those assets acquired through such activity. While small businesses may sigh with relief at this change of heart, the IRS may not have any sway over the local law enforcement agencies that continue to comb bank records for serial cash deposits in order to collect their cut of the proceeds.

Nor will the change in focus allow banks to tell depositors that those smaller deposits could be illegal. That kind of advice should come from the business’ attorney or accountant.

Source: The New York Times, “Law Lets I.R.S. Seize Accounts on Suspicion, No Crime Required,” Shaila Dewan, Oct. 25, 2014

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