* Wow, what a week. I’ve been telling people lately that I think I was put on Earth to cover this spring session. I hope it doesn’t wind up putting me in the ground. We all gotta take it easy every now and then, so rest up this weekend and I’ll talk to you Tuesday…
Ways and Means Oversight Subcommittee Chairman Peter Roskam (R-IL) hosted his first hearing on protecting small businesses from IRS abuse. Roskam prompted IRS Commissioner John Koskinen to apologize for the agency’s longtime practice of seizing banks accounts of individuals and small businesses without any proof of wrongdoing.
Rep. Roskam: “Commissioner, the IRS grabbed these taxpayer by their throat and squeezed them…and nearly ruined them and made their lives miserable. Would you be willing today, on behalf of the IRS, to apologize for those taxpayers who were so abused?”
IRS Commissioner: “If they paid their taxes, they weren’t doing anything consciously illegal, and they got wrapped up in the system, that was a mistake and I apologize for that.”
* It wasn’t easy to get that apology. Roskam had to ask three times. Watch…
The Civil Asset Forfeiture Act of 2000, which was aimed at preventing money laundering, drug trafficking, or other crimes, has been criticized for enabling government agencies to use greatly reduced standards of evidence to seize assets. Agencies are able to confiscate and sell the property of individuals suspected of (but not necessarily charged with) a crime.
In his opening statement, Subcommittee Chairman Peter Roskam (R – Illinois) pointed out that the IRS has used the law “to seize the bank accounts of people suspected of ’structuring’ – that is, of making cash deposits worth less than USD10,000 to avoid reporting requirements.”
On April 12, 2013, the IRS seized every penny of a nearly $1 million business account held by Georgia gun shop owner Andrew Clyde.
His misdeed — if you can call it that: depositing business checks into his bank account in increments under $10,000.
A bipartisan group of lawmakers on House Republicans are on Wednesday preparing to shine a spotlight on the government’s practice of seizing small business civil assets without charging them with a crime, signaling a new oversight focus on an issue gaining more attention and hinting at new legislation backed by both parties.
In one instance, a U.S. attorney suggested to one witness’s attorney that he may be getting a harsher punishment because the witness spoke to the press, according to an email reviewed by POLITICO.
The IRS reviewed its policy last year and changed it after media reports about asset seizures. The agency will now typically ignore cases where the money doesn’t come from illegal sourcing, such as drug dealing, instead of seizing assets only on evidence of structuring.
* Yeah, well they’re still doing it, Roskam’s office says. And the IRS refuses to disclose to Congress or anyone else just exactly how many non-criminal asset seizures it does every year…
Structuring is “catching a lot of innocent people — a Mexican restaurant, a gas station, a dairy farmer,” [Roskam] said in his opening statement.
“Many people can’t afford a long, drawn-out fight, so they settle, handing over thousands of fairly earned dollars to the IRS — all without having done anything wrong,” Roskam said.
The IRS seized 147 accounts last year, Koskinen testified.
“In 60 percent of those cases, the owner of the asset never shows up, which shows that they obviously had a criminal activity going on.” [said IRS Commissioner John Koskinen] […]
Roskam said the IRS has too much power to seize assets, even if the agency doesn’t have adequate evidence of a crime.
“The IRS doesn’t have to give notice to the account-holder before seizing the assets. And the IRS doesn’t have to prove that the person is actually guilty of anything — just that the account probably is involved in structuring,” Roskam said.
So, in other words, in 40 percent of the cases, the asset owner shows up, which indicates that no criminal activity was “going on.”
