I have written numerous articles over the year about the onerous, destructive practice of IRS asset forfeiture cases. Basically, the IRS has been leveraging laws intended to target money launderers and criminals in order to seize the bank accounts of business owners who make one or more deposits of $10,000 cash. Time after time, these cases showed the circumstances were not criminal, and yet citizens spent months and even years trying to get their hard-earned money back.
In 2014, after a series of high-profile cases outlined the outrageous behavior, the IRS announced it would restrict its practice to situations in which the person is suspected of criminal activity; subsequently, the DoJ issued a change as well, saying that they would devote themselves only to the “most serious illegal banking transactions.”
While these changes are a step in the right direction, they still left behind a trail of cases that severely disrupted the work and lives of many Americans. Remember, money was seized time after time for years — usally without any charges ever brought forth, only the suspicion of possible “illegal activity” for merely depositing large sums of money.
Some of the tactics involved in the practice of asset seizure involve the government offering a “settlement” to the business owners, returning to them only a portion of their hard-earned money, which keeping the rest for their coffers. Many people — for fear of government or lack of funds for representation — chose the path of settlement to be able to move on with their lives and have some money back in their accounts.
Two asset forfeiture cases have emerged recently where both parties are requesting restitution. The first cases involves trying to recover the portion of the money that the government kept as part of the settlement; the second cases requests the full portion that was seized after the party involved unknowingly signed away his account when visited by IRS agents.
In the first case, due to “a prior settlement with the government, Randy and Karen Sowers, who own South Mountain Creamery in Middletown, Maryland, got back a portion of the seized money, around $33,500. Now in a new letter filed this week to the Justice Department, a nonprofit organization that has has been working with the farmers is helping in the fight to get back the rest of the couple’s money — $29,500 — despite the prior settlement.
Randy Sowers said his bank teller initially suggested that his wife keep deposits under $10,000 to avoid time-consuming paperwork at the bank. “We thought it was very legitimate,” he said. Karen Sowers initially wanted to deposit $12,000 earned from a weekend farmer’s market. “If I wanted to hide it, I would have put it in a can. We have trouble paying our bills and don’t need the government coming and taking money from us.”
Despite settling previously with the government, the Sowerses and Johnson say they are owed all of the assets, and initially had to settle for fear of losing the full amount seized and potentially more assets.
Congress has even gotten into the fray. The House Ways and Means Subcommittee on Oversight took up the Sowers case, and asked the Treasury Department to review similar cases.”
The related cases include Khalid “Ken” Quran, who owns a convenience store in Greenville, North Carolina. He had more than $150,000 seized in June 2014 after he unknowingly agreed to forfeit his bank account when IRS agents visited his store, accusing him of skirting reporting laws. Quran denies the charges.
“He said, ‘You need to sign a paper,’ and I told him my English is not right,” said Quran, an immigrant from the Middle East. “Then he read it to me like you would read the newspaper and said you need to sign it.” Quran said he did nothing wrong. “No bank told me that. No bookkeeper told me that,” he said.
He has not received any of his money back, and the Institute for Justice has also filed a petition on Quran’s behalf. On Tuesday, the legal nonprofit send a letter to the IRS, asking for his petition to be reviewed.”
The IRS and Department of Justice should work immediately to make these cases, and possibly others, correct again. The seizures, as they were practiced prior to the changes made in 2014, were egregious and improper.