What do a Maryland dairy farmer, a Virginia Army sergeant saving for his children’s college education, a restaurant owner from Iowa, drug traffickers, racketeers and terrorists have in common?
They’re all criminals according to the IRS.
The New York Times just featured the plight of Carole Hinder, owner of Mrs. Lady’s Mexican Food in Spirit Lake, Iowa:
For almost 40 years, Carole Hinders has dished out Mexican specialties at her modest cash-only restaurant. For just as long, she deposited the earnings at a small bank branch a block away — until last year, when two tax agents knocked on her door and informed her that they had seized her checking account, almost $33,000.
The Internal Revenue Service agents did not accuse Ms. Hinders of money laundering or cheating on her taxes — in fact, she has not been charged with any crime. Instead, the money was seized solely because she had deposited less than $10,000 at a time, which they viewed as an attempt to avoid triggering a required government report.
“How can this happen?” Ms. Hinders said in a recent interview. “Who takes your money before they prove that you’ve done anything wrong with it?”
The federal government does.
Using civil forfeiture, law enforcement agencies can take cash, cars and other property without so much as charging the property owner with a crime. Shockingly, the agencies that seize the money can use the proceeds of forfeiture to pad their own budgets. For several years, the government has used civil forfeiture to treat legitimate small businesses like criminals just because they make frequent cash deposits.
“Civil forfeiture is one of the most serious assaults on property rights in America today,” said IJ Attorney Larry Salzman. “The government should not take property from innocent people.”
Now that Hinder’s plight has hit the front page of the New York Times, the IRS is back-tracking:
On Thursday, in response to questions from The New York Times, the I.R.S. announced that it would curtail the practice, focusing instead on cases where the money is believed to have been acquired illegally or seizure is deemed justified by “exceptional circumstances.”
Richard Weber, the chief of Criminal Investigation at the I.R.S., said in a written statement, “This policy update will ensure that C.I. continues to focus our limited investigative resources on identifying and investigating violations within our jurisdiction that closely align with C.I.'s mission and key priorities.”…
The I.R.S. is one of several federal agencies that pursue such cases and then refer them to the Justice Department. The Justice Department does not track the total number of cases pursued, the amount of money seized or how many of the cases were related to other crimes, said Peter Carr, a spokesman.
But the Institute for Justice, a Washington-based public interest law firm that is seeking to reform civil forfeiture practices, analyzed structuring data from the I.R.S., which made 639 seizures in 2012, up from 114 in 2005. Only one in five was prosecuted as a criminal structuring case.
The practice has swept up dairy farmers in Maryland, an Army sergeant in Virginia saving for his children’s college education and Ms. Hinders, 67, who has borrowed money, strained her credit cards and taken out a second mortgage to keep her restaurant going. …
According to IJ, 80 percent of assets seized by the federal government were from citizens who were never even charged with a crime. IJ also aptly calls this practice “state-sanctioned theft.”
It’s time all federal officials—both elected and appointed—abide by the Fourth Amendment.