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posted by chromas on Thursday July 11 2019, @07:20PM   Printer-friendly
from the what-you-want,-baby-I-got dept.

It has been 20 years since Congress tightened the rules on civil forfeiture, but following unanimous approval by Congress, President Trump signed the Taxpayer First Act (H.R.3151) into law last week. This law curbs the IRS's power to seize cash for "structuring" offenses.

Under the Bank Secrecy Act of 1970, banks must report any cash transactions greater than $10,000. But if someone frequently deposits or withdraws their cash in amounts under $10,000, the IRS could seize it for “structuring.” Even though their money was earned legitimately and despite the fact that they were never charged with a crime, in 2012, the IRS seized nearly $63,000 from Randy and more than $446,000 from Jeff. It took years of litigation and high-profile coverage before they won their money back.

Structuring can be a Kafkaesque nightmare for small-business owners, especially for entrepreneurs like Jeff and Randy who work in cash-heavy industries: Jeff runs a convenience store distribution business with his brothers on Long Island, while Randy is a dairy farmer in Maryland.

Nor were the above isolated incidents.

Between 2005 and 2012, the IRS used civil forfeiture to seize nearly $200 million in over 2,100 cases. Roughly half of all seizures involved amounts under $34,000—hardly the proceeds of the sprawling criminal enterprises structuring laws were supposed to target.

The law (called the "RESPECT Act") puts in place a common sense requirement that should have been there from the beginning:

the IRS can now only seize property for structuring if it’s “derived from an illegal source” or if the money were structured to conceal criminal activity.

The law codifies a policy change made by the IRS in 2014 due to multiple lawsuits and associated publicity. That change resulted in a dramatic drop in associated forfeitures ($31.8 Million in 2014 to $6.2 Million in 2015).

The law also requires that judges promptly review structuring seizures, a process which previously took months or even years while a citizen's funds remained in the hands of the government before a challenge would be heard.

Previous Civil Forfeiture Coverage


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  • (Score: 3, Interesting) by ikanreed on Thursday July 11 2019, @09:32PM

    by ikanreed (3164) Subscriber Badge on Thursday July 11 2019, @09:32PM (#865983) Journal

    It's not quite perpetual though.

    The free loans cause inflation for "us" because real estate is, in some ways, an unbreakable investment vehicle, and they can charge as much rent as it takes to make their profit, and we have to live somewhere. The Wall Street corporate owners have been buying up more and more land and houses with their free money tap, raising our prices through the roof. At some point the rent seeking and loan sharking will actually exceed the net productivity of the American worker. At that point, there won't actually be anything monetary policy can do to save even the high end market from crashing. There won't be any real value left to buy.

    And the fallout from that, it's seeming in my own very subjective ill-informed position, isn't just going to make 2008 look like nothing, it's going to make 1929 look like nothing.

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