IRS Admits To Illegally Seizing Bank Accounts; Agrees To Give The Money Back

Tyler Durden's picture

Submitted by Justin Gardner of The Free Thought Project


It's the stuff of libertarian dreams. The IRS admits that it wrongfully took money from innocent citizens, and it gives the money back.

This is actually happening to victims of a little-known form of civil asset forfeiture carried out by the IRS on the premise of "structuring" violations. In case you didn't know, depositing or withdrawing just under $10,000 from your bank account multiple times is viewed as suspicious and possibly criminal activity.

In a victory for lawmakers working to make it harder for the government to take property from innocent Americans, the Internal Revenue Service plans to give people who have had money seized over the last six years the chance to petition to get their money back, The Daily Signal has learned.

According to a GOP source, the IRS told the House Ways and Means Oversight Subcommittee that it will send letters to everyone the agency seized money from for alleged structuring violations, which involves making consistent cash transactions of just under $10,000 to avoid reporting requirements, starting in October 2009.

One petition has already been granted, and others are likely to follow.

The IRS has seized entire bank accounts with no notice or due process, alleging the owners sought to avoid federal bank reporting requirements. The aforementioned pattern of banking is described as "intentionally structuring cash transactions," and they call it a crime.

This nefarious provision of the Bank Secrecy Act is purportedly targeted at drug traffickers, money launderers and terrorists, but it has swept up hundreds of innocent people—including small business owners who lost everything because they deal wholly or partly in cash.

Carole Hinders, owner of a Mexican restaurant in Iowa that only accepted cash, had her entire bank account of $33,000 seized even though she did nothing wrong. The IRS seized $63,000 from Randy Sowers, a dairy farmer in Maryland, because he was depositing under $10,000 into his bank account.

Ken Quran, the owner of a convenience store in North Carolina, had his entire bank account of $150,000 seized after working nonstop for years to build it up. His crime? Withdrawing cash from his bank account in amounts under $10,000.

But the truly shocking thing is what happened next. A group of government agents—both from the IRS and local police—came to Ken's store with an agreement already written up, under which Ken would agree to forever forfeit the money to the federal government. The agents searched his store with dogs, barred the entrance to keep out customers, and then demanded that he sign the paper. Ken initially refused, explaining that he did not read English well and did not want to sign an agreement he could not understand. Then, under compulsion—after one of the local police yelled and demanded that he sign, and after one of the IRS agents made clear that, otherwise, their next stop would be to talk to Ken's wife to pressure her—Ken agreed to sign.

Between 2007 and 2013, the IRS seized $43 million in over 600 cases where only "structuring" violations were committed, according to the Institute for Justice (IJ). The IRS abandoned this policy in 2014 after IJ put heavy pressure on the agency through lawsuits and media exposure.

But the noble public interest law firm was not done. IJ pioneered a legal mechanism, called petitions for remission, to fight for the return of seized assets from closed cases involving only structural violations.

And, amazingly, it worked. IJ filed a petition to the IRS on behalf of Ken Quran, and the agency actually gave Quran all of his money back.

This is a startling admission of wrongdoing by the feared federal agency, and a rare win for liberty.

After an investigation by the House Ways and Means Oversight Subcommittee, the IRS has been forced to invite 700 other property owners with closed cases to petition for their money back. However, IRS said it has identified only 75 cases where money was wrongfully seized. The true number will be known after everyone goes through the process.

In a further rebuke to the agency, members of the Oversight Subcommittee have introduced a bill "that prohibits the IRS from seizing money from people who commit structuring violations unless the agency proves the money was tied to a crime."

These brazen acts by the IRS are only a small part of the enormous network of thievery called civil asset forfeiture that is cast upon the populace by every level of law enforcement. It has nothing to do with protecting and serving, and everything to do with policing for profit.

Countless innocent people across the country have had cash, assets and life savings stolen by local police departments, DEA and other agencies. Nothing but a fabricated suspicion of a crime is needed for this to happen, and the struggle to get one's assets back is often not worth the effort and legal fees.

Fortunately, this too is being fought by IJ and others who realize the sheer injustice of it all.

New Mexico became the first state to require a criminal conviction for asset forfeiture, effectively abolishing civil asset forfeiture, and other states are following suit. At the federal level, attention must be focused on the Equitable Sharing Program which allows local police departments to skirt state laws by sharing the loot with the feds.

Resistance is not futile. When the ugly truth of civil asset forfeiture is exposed, it can be stopped.

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Vageling's picture

What do you know. Cops and Feds seems to be the greastes terrorist trying to extort your money. Any investigation how much went missing? In in those pigs pockets! 

Cognitive Dissonance's picture

"In a victory for lawmakers working to make it harder for the government to take property from innocent Americans, the Internal Revenue Service plans to give people who have had money seized over the last six years the chance to petition to get their money back, The Daily Signal has learned."

Oh good. The people who were robbed without due process have been granted the 'right' to beg for their money back.

How quant.

Motorhead's picture

Man, no shit.  Fucking totalitarians.

beemasters's picture

Class action....and make sure someone (important) is in jail.

iampreparedru's picture

Ahh you cant sue the government unless they give you permission and they don’t have to pay if you win unless they approve. They don't follow the law because there are no repercussions. 

The revolution is coming but I will be long gone (as in found a new place to enjoy life).

erkme73's picture

I want to know where all those "good" cops are.  You know, the unicorn-like proverbial altruistic cop who only wants to make the world a better place.   So a team of local LEO and IRS agents show up at a business.  Safe to say it must be at least a dozen or more.  If those few bad cops that give all the good ones a black eye are, in fack, so few, then surely the good cops would have stepped in and said, "Guys, this isn't right.  This is theft."  But, alas, crickets.  Which brings me to my point... There are NO GOOD COPS. PERIOD.

Heavy's picture

fraud money system > law system

Friedrich not Salma's picture

I've seen a lot of cop videos and never have I seen a copper step up to stop a cop beating. NEVER. Cowards, all of them.

any_mouse's picture

What is the difference between Police and Hell's Angels?



Hell's Angels aren't afraid of prison.


Bada Boom.

PhoQ's picture

The good cops have given up. They burn out after a few years of working with and for complete amoral assholes.

erkme73's picture

That's been my contention all along.  Any good cops would have either given up in frustration, or been run out of town for not being a team player (in helping to cover for bad cops).  It would appear the only sin a cop can commit is to break rank with his brothers in blue.    Ticket a fellow cop for speeding, or report him for beating a  handcuffed suspect = career suicide.   Shoot an unarmed man in front of 5 other cops, they'll coach you through it... "He was reaching for his waistband", "I feared for my life", or the "he reached for my gun".   They'll all vouch for total BS... until the cell phone video from a bystander shows up.  That's the only thing they seem to fear.

JLee2027's picture

I have no doubt the IRS destroyed any lists which would have condemned them.  The IRS should be closed...which I'm hoping Trump will do.


Oh good. The people who were robbed without due process have been granted the 'right' to beg for their money back.

smokintoad's picture

Honest mistake.  They thought they stole it fair and square.

SWRichmond's picture

Internal Revenue Service plans to give people who have had money seized over the last six years the chance to petition to get their money back

See, the government CAN be trusted!  Thank god it's an election year!  Vote Hillary!

ACES FULL's picture

I know several people that were targeted for "structuring". You better believe they kept a lot more than they are returning.

ImGumbydmmt's picture

you forgot the /sarc tag, but i upvoted ou anyway.

junction's picture

The Feds who got promotions for illegally seizing people's bank accounts will keep their promotions and any bonuses they received for operating like the Mafia.

JLee2027's picture

It is shameful to claim to be an American and have participated in this obvious theft. Shameful! They must have known how wrong and evil this was.

1980XLS's picture

They knew, and they don't really care. Hence, that's the Scary part.

iampreparedru's picture

I can attest to that. New examples every year, and from Texas (Harris) county bureaucrats. So the rest of the country must be really really bad. 

rosiescenario's picture

Our Nazi gubbermint inaction.....

So Close's picture

Some good news.  I keep asking myself why does getting these things right have to be so fucking hard.... and am reminded of Lawrence...   "The trick is not minding that it hurts."

Vageling's picture

Guess it's your laws. In my country nobody seizes shit without a court order. We call that smurfing. As long as you don't have more than X amount of cash on you they can't arrest you either. Not sure to which extend it's illegal but you need a court order to seize shit. So they confiscate it and only a judge can order to seize it.  

Cognitive Dissonance's picture

In America we do things better. We cut out the judge and go directly to seizure without passing GO.

N0TaREALmerican's picture
N0TaREALmerican (not verified) Vageling Jun 22, 2016 5:36 PM


You must live in one of the liberal hippy socialist countries that doesn't wear Merican Flag Lapel Pins to show what a patriot you are.  

In Merica, we have the greatest constitution even written, which is why we don't allow these hippies to hid their illegal drug money, we TAKE from them, just like the goddamn constitution says we should.

Motorhead's picture

The "judicial" system is fucking broke, too.  Tommy Jefferson was spot on there.

lincolnsteffens's picture

The "judicial" system is fucking broke, too.

The "judicial" system has been broken nearly since its inception.   There, fixed it for you.

American Bar Association and the State Bar Associations are monopolies. The Law schools do not teach any meaningful courses on protecting the Constitutional Rights of people. The States authorize the exclusive paid occupation of Attorney by license making all others criminals, except the lone guy that represents himself in court. How many people can spend a lifetime learning how to defend their rights in court when they may never need the knowledge to do so. It is a rigged system as corrupt as the financial markets. 

Asset seizure done without first obtaining a warrant issued by a judge after a sworn affidavit of one or more witnesses to a crime is blatantly in violation of the American Constitution. There is no hair splitting on this issue. It is the legal profession that comes up with strategies to rob people of their property with out due process. The Judges are quite happy with this too.

css1971's picture

"and they call it a crime."


Which one would duly be charged with and tried on?


No? What the fuck do you mean NO?

Amalgamated Tang's picture

Who has been president during all of this abuse?

1980XLS's picture

Some guy from Kenya, last I heard.

Shemp 4 Victory's picture


Who has been president during all of this abuse?

Democrats and Republicans.

khnum's picture

Jesse James is back and NOW runs the IRS

1980XLS's picture

Banana Republic.

Hope & Change indeed.

Automatic Choke's picture

so.... dealing in cash over $10k is suspicious, assumed criminal, and must be reported.    and, dealing in cash under $10k is suspicious because it looks like you are avoiding reporting, so that is assumed criminal too.


perhaps we all oughta file transaction reports for all cash transactions, whether over or under $10k.    flood them with paperwork.

1980XLS's picture

They get paid to do paperwork, all with your money.

You think they care? That's exactly what they want.

moonmac's picture

Institute for Justice is awesome! I've yet to disagree with them on any issue. The only lawyers I respect! 

lincolnsteffens's picture

Hey, thanks, I never heard of IJ before.

Aubiekong's picture

Rule #1 if you are a cash business you do not deposit any cash into any bank...

Grosvenor Pkwy's picture

If by some miracle you are actually making a profit, what do you do with the excess cash?

1980XLS's picture

Buy guns, Gold  and ammo of course.

g speed's picture

use some of it to bribe the good cops so they will protect you from the bad cops----just saying

AdolphLustig's picture
AdolphLustig (not verified) g speed Jun 22, 2016 7:37 PM

Bribed cops=good cops
Not bribed cops=bad cops

1980XLS's picture

Buy guns, Gold  and ammo of course.

1980XLS's picture

Why put money in any bank?

They don't pay interest anyway. But between Gangsta Gov't and NIRP, why would one even take such risk?

AdolphLustig's picture
AdolphLustig (not verified) 1980XLS Jun 22, 2016 7:37 PM

If you don't and the cops catch you with it is good as gone.

And then don't give it back.

Seasmoke's picture

Imagine that. People are fucking sick of the Israeli Revenue Service. Well past time to Get rid of it.

legalize's picture

IJ is awesome and I have been supporting them for years.