NCPA - National Center for Policy Analysis

Loose Civil Forfeiture Law Leads to IRS Money Grab

February 23, 2015

Civil forfeiture is a controversial legal process whereby the Internal Revenue Service (IRS) can seize a person's bank assets without the police charging the owner with any wrongdoing. According to the IRS, a series of cash withdraws or deposits under $10,000 are evidence of "structuring." The federal government requires banks to report all transactions larger than $10,000.

Loose civil forfeiture standards empower the IRS to seize property without a meaningful investigation, forcing owners into difficult legal battles. And because the funds are used to support the ongoing work of law enforcement, the IRS will continue money grabbing.

According the IRS:

  • In more than 1,500 cases from 2005 to 2012, the IRS has seized more than $242 million in suspected structuring violations.
  • IRS seizures increased 166 percent from 2005 to 2012.
  • One third of the IRS's structure-related seizures occurred without any allegations of fraud, money laundering or smuggling.

The IRS is seizing more than it can justify. In order to prevent federal money grabbing, criminal forfeiture should replace civil forfeiture, therefore removing financial incentive to seize property from innocent people. Criminal forfeiture requires the full due process of the law. That is, criminal wrongdoing must be proved.

Source: Dick M. Carpenter II and Larry Salzman, "Seize First, Question Later: The IRS and Civil Forfeiture," Institute for Justice, February 2015.

 

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