IRS seized $107,000 from this business owner for making too many small cash deposits

[Neapolitan]

The IRS seized $107,000 from this business owner for making too many small cash deposits

Updated by Timothy B. Lee on May 2, 2015, 10:00 a.m. ET [email protected]<script cf-hash='f9e31' type="text/javascript"> /* */</script>

 

If you deposit more than $10,000 in cash, your bank is required to file a form with the authorities reporting the transaction. But the law also makes it illegal to "structure" deposits — depositing cash in amounts under $10,000 to avoid triggering the reporting requirement.

But aggressive enforcement of these laws can ensnare small business owners whose only crime is dealing in cash. This video tells the story of Lyndon McLellan, a convenience store owner in rural North Carolina who had $107,702 seized by the IRS. The agency hasn't charged McLellan with any crime, but under controversial civil asset forfeiture rules the burden of proof is on him to prove he didn't violate the "structuring" laws. The video was made by the Institute for Justice, a libertarian public interest law firm that is representing McLellan.

 

RelatedJohn Oliver rips into the scandal of for-profit policing

Eric Holder places a check on civil forfeiture powers

The New York Times points out that business owners can have legitimate reasons for keeping their cash deposits under $10,000. For example, some store owners have insurance policies that only cover cash losses up to $10,000.

It won't be easy for McLellan to get his money back. Many forfeiture targets don't bother to contest seizures under civil forfeiture laws because legal fees would exceed the value of what was taken. But with IJ's help, he might be able to recover the money the IRS took from him.

The IRS declined to comment on the case, citing taxpayer privacy laws.

★★★

http://www.vox.com/2015/5/2/8528845/irs-structuring-civil-forfeiture

[new york kevin]

The result of the pragmatic socialistic policies of the Obama Administration as it relates to the enforcement of UNCONSTITUTIONAL law and or Presidential edicts that go unchecked and unbalanced. Our constitution protects us from illegal search and seizures. We had up to the Obama administration been considered INNOCENT UNTIL PROVEN GUILTY IN A COURT OF LAW, first. A definitive socialistic tennent.

[bohica]

The IRS is just out of control.  It has become a political hit team for the Democrats and Obama.  You have no recourse except to pay for an attorney in dealing with these good for nothing money suckers.  I agree with Cruz in that they need to be dissolved.

[haden'sdad]

Believe I am not an obummer supporter or irs...but I must say these laws were here before obama and enacted on as well. There are many anti-laundering laws such as this one. My only question is how long has this store owner been doing the small deposits.

[bohica]

Given the economy small deposits might have been all the store owner was able to make.  I do not know all the details on this event but I do know of many small people who end up having to take out a loan, drain their savings or get an attorney because the IRS refuses to deal with the common person.  I do not know why the excuse for the IRS is that their dog ate the hard drive but they hold the taxpayer accountable for undue taxes if they do not have receipts.

[Markinsa]

The IRS has been doing this for a long time, way before Obama came into office.

 

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[bohica]

Markinsa...You are right.  I remember Reagan wanting to overhaul the IRS and I believe that was one of the main times he was politcially shot down.  I wish someone could stop that machine before the people get too fed up with the actions.

[new york kevin]

Believe I am not an obummer supporter or irs...but I must say these laws were here before obama and enacted on as well. There are many anti-laundering laws such as this one. My only question is how long has this store owner been doing the small deposits.

 

You are missing the point, the anti-laundering laws that were on the books before Mr Obama came into the Presidency were there as a tool to go after criminal entities like La Cosanostra, criminal drug gangs, domestic terrorist groups etc. Analigous to RICO laws, Al Capon was not jailed for the criminal enterprises he ran, he was jailed for tax evasion based on the evidence of income via cars, houses, etc that he owned. The laws you reference were additional tools to go after criminal entities, insider traders, white collar criminals and the local street corner drug dealers.

 

These tools were not ment to be used to seize the money of hard working Americans, who are small business owners barely making it. Since they are barely making it also means that their abusers, the IRS, know they can keep the money because the details of amendments attached to obscure bills unrelated to this topic, allows them to do what they did to this person while making it to costly to defend themselves in a court of law. What recourse does this business person have if it is going to cost them $100,000 of the $107,000 to get their money back? Why cannot similar victims get their seized money, plus Attorney costs back?

 

If such abusive tactics go unchecked and unchanged whats next ? The elimination of the coin operated laundry industry in the US as the IRS goes and seizes their profits because the deposits are all done in cash? And or under $10,000. They are going to smother small businesses in the USA if they continue to treat American business people like cigarette butts that can no longer be smoked.

[SgtFuryUSCZ]

***///

 

Yup.  No longer just a tool to stop REAL crime syndicates....  NOW it's the way a new dictator steals from US.

 

...he's no different than a two-bit dictator from any other 3rd world country -- which is what we are now -- thanks to him.

 

And don't forget about OPERATION CHOKE POINT... now there's a real favourite of his:

able to take money AND guns from Americans at the same time!

 

Bet he gets a real chuckle every time they pull one of THOSE off !

 

 

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Edited May 3, 2015 by SgtFuryUSCZ

[bohica]

Sarg...I so agree.

[umbertino]

Grazie for sharing this ....Scaringly absurd ( at least for us normal folks)

[Xtaxguy]

Way back in the day when I was a practicing CPA, there was grudging respect between my colleagues and IRS Agents, at least to their honesty, if not their sophistication.  I encountered only one exception, and we promptly got his bribe seeking butt shipped off to a federal penitentiary. 

 

I doubt that relationship exists any more, although the professions leaders continue to pay lip service to it.  Corruption, politics, and abusive applications of vague laws and regs have corrupted the IRS as an institution.  The root cause is the habit of Congress for the last 40 years to pass vague bills delegating to the Treasury the job of writing regulations to provide the detailed application of the new law.  That usually takes years, causing great uncertainty in the interim, which often causes business to avoid new investments and the related job creation, and even worse, to ship jobs overseas.  This power, to write rules and apply them retroactively (don't tell me about the constitution, long ago SCOTUS put that document in a black hole regarding income taxes and the ex post facto clause) gave the agency a huge sense of power which unsurprisingly has since been grossly abused by appointed political thugs.  This corruption has, of course, trickled down to the rank and file, resulting in cases such as this.

 

It will only stop when the honest and law-abiding taxpayers threat these smash and grab thugs the same way they treat the other felons who come in the dark of the night.

 

And to you flakes in Congress, and especially the Rhinos:  these federal thugs are acting in YOUR name on YOUR orders because you passed incompetently written laws giving the thugs freedom to abuse those whom you would represent, and have failed to rein them in by curative legislation, pubic pronouncement, or impeachment of the higher ranking thugs.  Keep this in mind the next time you want something from us!

[umbertino]

Interesting, Xtaxguy....Grazie

[Maggie123]

Believe I am not an obummer supporter or irs...but I must say these laws were here before obama and enacted on as well. There are many anti-laundering laws such as this one. My only question is how long has this store owner been doing the small deposits.

 

Yes..it seems some folks are a little behind in their history lessons. lol

 

Good Post Xtaxguy...Thank You.