A recent national news focus on the federal government’s civil asset forfeiture program states that its main objective “is to disrupt and dismantle criminal enterprises.”
By all indications, though, what special IRS agents seem to be most excelling as is not undermining the unlawful operations of groups like drug cartels and organized prostitution rings but, rather, hassling mom-and-pop businesses across the country as they go about their daily activities in good faith.
The forfeiture program has been in high gear since the enactment of the federal Bank Secrecy Act decades ago.
That legislation contains so-called “anti-structuring provisions” that allow personnel from the IRS Criminal Investigation (CI) division to summarily seize money and other assets from individuals and businesses that the agents believe were procured from profits linked to unlawful activities. Agents look for a pattern of deposited amounts that are just beneath the $10,000 threshold triggering bank reporting requirements to the IRS.
Unsurprisingly, legions of businesses like restaurants, hair salons, gas stations, small retail and supply outlets and similar entities routinely make such deposits.
And that has put them under an IRS microscope, leading in many instances to fund seizures falsely attributed to criminal activity that the tax agency has never returned to rightful owners.
A recent government report notes this dismal reality uncovered by a high number of investigations into CI conduct regarding asset seizure and forfeiture: More than 90% of scrutinized investigations yielding seizures “were of businesses and individuals whose funds were obtained legally.”
And this disturbing pattern also emerged from the above-cited government report into CI asset forfeiture cases: In some instances, notes an Accounting Today article on the program and probe into its particulars, agents “seemed to use non-prosecution [in a criminal case] as a bargaining chip to resolve the civil forfeiture case.”
Congress has conducted multiple hearings recently into the program and attendant reports of problems associated with it. Currently, about 1,800 people who have suffered fund seizures have been granted the right to petition for a return of their money.
And, given the recurring negative news that is being reported about the program, it is certainly reasonable to believe that many more individuals than that may have been unlawfully deprived of their property by the government.