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* From a press release…
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…
* Background…
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.”
* This is just so un-American…
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.
* Bloomberg…
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.
* And…
“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.”
40 percent.
Sheesh.
posted by Rich Miller
Friday, Feb 13, 15 @ 11:22 am
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Here is a story about the gun shop owner:
http://onlineathens.com/breaking-news/2015-02-12/athens-gun-shop-owner-testifies-congressional-hearing-asset-seizure
“Those deposits were always less than $10,000, Clyde said, because his business insurance policy only covered off-premises losses up to $10,000.”
Comment by Todd Friday, Feb 13, 15 @ 11:27 am
It would be nice if Roskam would fund IRS sufficiently so they can do their job. I’ve had a minor paper issue that took 5 months for the right hand to solve while the left hand computer kept sending me notices and threats. Total inefficiency, but typical when the people are so overloaded.
Comment by D.P.Gumby Friday, Feb 13, 15 @ 11:32 am
Has Roskam or anyone else tried to amend the Civil Asset Forfeiture Act? Money laundering is bad, illegally seizing someone’s assets is worse. Another side effect of the war on drugs/tough on crime zeal of the 1990s.
Comment by 47th Ward Friday, Feb 13, 15 @ 11:42 am
What the IRS has been doing is wrong. They are fining and ruining Americans without proof. It is out of control and off the leash. Either abolish it or force it to recognize and respect our civil rights.
In this digital age, most of the IRS can be eliminated, in my opinion.
Comment by VanillaMan Friday, Feb 13, 15 @ 11:42 am
What 47 said. Roskam has the ways and means to follow up.
This isn’t about the IRS, per se, but the ridiculous War on Drugs, and built-in finanical incentives to steal citizens’ property until they spend a load of time and money to prove they’re not guilty.
Un-American, indeed.
Comment by Wordslinger Friday, Feb 13, 15 @ 12:10 pm
“It would be nice if Roskam would fund IRS sufficiently so they can do their job. I’ve had a minor paper issue that took 5 months for the right hand to solve while the left hand computer kept sending me notices and threats. Total inefficiency, but typical when the people are so overloaded.”
—————–
Nonsense. All the IRS wants to do is to add more bodies. It’s the old “CMP” (Christ, More People) approach to dealing with the workload. That approach doesn’t tend to make you more efficient.
Just a basic concept: How many people would use a doctor/medical practice who had a 40% error rate on procedures? Anybody?
Even the VA isn’t that bad.
Comment by Judgment Day (on the road) Friday, Feb 13, 15 @ 12:11 pm
“In this digital age, most of the IRS can be eliminated, in my opinion.”
—————
Respectfully, not going to be anywhere near that easy. There’s a very basic structural problem with accomplishing this goal (worthy as it is).
The software tools and data processing approaches that have been built are all forward looking. The federal tax structure is primarily a legacy approach (historical).
The two don’t mix very well (which explains a lot of the failed IRS IT initiatives), and it’s more of a structural design issue as well as an operational issue. For IT projects, that’s a lethal combination.
As an example, most current standard software development tools and environments (NOT Windows legacy client-server) are all current year/forward looking, while all income tax data calculations are always referencing historical databases, and then working to apply those resulting calculations into current year scenarios.
It may not seem like a big deal (current vrs. historical for calculations), but it really is.
And even 95% efficiency just doesn’t cut it, and it’s unlikely to be that high. Reason is each one of that last 5% has to be resolved manually, and that’s where the life/work gets hard. And you can’t just throw bodies at it. People got to know their stuff.
Personally, been down that ‘current vrs. historical = calculation nightmares’ software development path in terms of system development. Painful, to say the least. Also, unsuccessful.
Just sayin.
Comment by Judgment Day (on the road) Friday, Feb 13, 15 @ 12:29 pm
Flat tax.
Comment by Keyser Soze Friday, Feb 13, 15 @ 12:37 pm
It’s fun for Congresscritters to beat up on the IRS, but this is a case where they are doing exactly what Congress told them to do in the Civil Asset Forfeiture Act of 2000.
In fact, this asset seizure law was just part of a set of laws that began in the 1980’s. And, these stories are as old as the first asset forfeiture laws.
If Roskam thinks the IRS (and other agencies) should no longer be doing this, he needs to repeal this and other such laws.
Comment by Pot calling kettle Friday, Feb 13, 15 @ 1:30 pm
==- 47th Ward - Friday, Feb 13, 15 @ 11:42 am:==
Why would Roskam try to pass a law to fix this problem? It’s like you guys think the House GOP is trying to govern instead of grandstand.
Comment by Precinct Captain Friday, Feb 13, 15 @ 2:05 pm
Asset foreiture laws set up really bad incentives for those in positions of authority. I cannot find it right now, but there was a nice piece a while back that had the man who developed them to punich drug dealers/smugglers seeking their reform/repeal.
Comment by Slick Willy Friday, Feb 13, 15 @ 2:07 pm