House Passes Bill Preventing IRS From Wrongfully Seizing Assets

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Juliegrace Brufke Capitol Hill Reporter
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The House unanimously passed a bill Thursday aimed at preventing the Internal Revenue Service from wrongfully seizing assets of innocent Americans under current civil forfeiture laws.

Former policy allowed the agency to seize the assets of individuals and small businesses it suspected of structuring — a practice often associated with criminal activity, in which cash deposits are regularly made under the $10,000 to avoid banking reporting requirements.

The Clyde-Hirsch-Sowers RESPECT Act — spearheaded by Illinois Republican Rep. Peter Roskam and New York Democrat Rep. Joe Crowley — would require the agency to provide sufficient evidence of illegal practices and force the IRS to give notice and a post-seizure hearing.

“Today we took a big step toward delivering justice for victims of IRS abuse,” Roskam said in a statement. “It’s clear to everyone involved that the IRS and DOJ abused their authority and took money from people who did nothing wrong. With today’s legislation, we’re making sure they can never do it again”

The IRS seized more than $242 million for suspected structuring violations between 2005 and 2012, according to The Institute for Justice, which represented a number of victims in their quest to gain back their lost funds.

Following a strong push from Congress, the IRS finally agreed in June to send letters to everyone it had seized assets  from based on suspicion of “structuring” cash deposits. These people, who had done nothing wrong, can finally get some or all of their money back.

Randy Sowers, a Maryland dairy farmer, and also a victim of the IRS, was pressured during his settlement agreement to sign a document saying the government wasn’t in the wrong due to the family’s decision to talk to the press.

“They came back (the IRS) and said we’re not negotiating, and we said ‘Why?’ And they said because you talked to The Baltimore City Paper,” the Sowers’ attorney Dan Alban of the Institute for Justice told reporters. “They said take it or leave it, we will not only take the whole amount, but we’re going to go back six months that you did deposit and you already paid, and we’re going to get $250,000 and we’ll have to seize your farm and put you out of business.”

Arms dealer Andrew Clyde had a whopping $940,000 dollars taken from him, not all of which has been returned to him.

“We went to a hearing where I got some of it back, but then they threatened me with criminal prosecution, saying if I went to trial, which I forced them to do, they threatened that they would prosecute me criminally, they wanted to keep the money they had,” he said at a press conference, noting if he had been prosecuted he would have lost his business. “I said absolutely not, there is nothing I believe I’ve done wrong.”

An identical bill was introduced in the Senate Tuesday.

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