We all must pay the piper when tax season comes. But what if the IRS ceased your bank accounts because they were deemed ‘suspicious’? For years, case after case have revealed instances where the IRS did exactly that, even though they could prove no criminal wrong doing. In a recent announcement, the IRS stated that they will no longer use civil asset forfeiture to confiscate the life savings of people who aren’t suspected of any crimes.
The announcement seemingly came as a response to a number of high-profile cases where the IRS took tens of thousands of dollars from people, mostly small business owners, because they simply made large cash deposits into their accounts that consisted of less than $10,000. The IRS previously justified taking these actions because the transactions were suspicious. Many small business owners however, painted a much different picture: they only accept cash and needed to deposit it into their account.
The money that is seized often goes directly into the IRS’s personal piggy bank – a whopping $36,000,000 in a five-year stretch between 2004 and 2009. Unfortunately, the changes are too late for many business owners who were bankrupted by the seizures – the IRS slyly decided not to apply the change retroactively.
Despite the policy change, lawmakers have taken up the issue in hopes of preventing the practice from ever occurring again. A league of Republicans, led by Senators Rand Paul (KY) and Mike Lee (UT) filed a bill in both the House and Senate to change the practice – the bill remains in committee.