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Another Asset Forfeiture Fiasco: Dressmaker Edition

I have continuously written about the deplorable practice of asset forfeiture via the IRS. Many of the cases involve circumstances where the business is accused of “structuring” cash deposits to stay under $10,000 — which the IRS considers to be “suspicious,” not unlike drug money laundering.  In such instances, the IRS can swoop in and seize the business bank accounts of the “offenders” while simultaneously NOT charge them with any crime.

This latest case regarding a business called Mii’s Bridal and Tuxedo involves an alleged IRS tax debt that had been in dispute between the business and the IRS. Just like in previous cases, the owners had not been charged with anything. In this instance, however, instead of raiding a bank account, the IRS seized the store’s inventory and liquidated its entire contents within four hours — while violating numerous IRS practices and federal laws along the way. In the end, another American business and the livelihood of its owners was destroyed.

According to the Dallas News,Mii’s, a small Garland business owned by an elderly immigrant couple from Thailand, was never accused in court of violating any federal laws.” Within hours of IRS agents arriving in March 2015, “Mii’s Bridal & Tuxedo was out of business after serving customers for decades. Its entire inventory of wedding gowns and dresses as well as sewing machines and other equipment were sold at auction. The hastily-called sale held inside the store netted the IRS about $17,000 — not enough to cover the roughly $31,400 in tax debt alleged, court records show. The balance is now likely unrecoverable.”

Violations by the IRS agents include:

-“The lead agent brought four children to join the armed agents and tag along during the entire process. The children sat on a pallet with several boxes of pepperoni pizza while watching events unfold.

-The Dallas police assisted in the raid, and an off-duty Dallas Police officer in plain clothes bid on and purchased an auction item.

-Agents seized items they shouldn’t have, such as a Vietnam veteran’s hat left at Mii’s to have badges of honor sewed into it. The IRS refused to return the hat.

-The agents also seized video game consoles, a surround-sound music system and a 65-inch TV, which was not authorized by the judge’s order.”

What’s more, “When the agents arrived for the seizure, they told the Thangsongcharoens to give them a $10,000 check within two hours to avoid the sale of their roughly 1,600 “designer” gowns, worth more than $615,000.  Regarding the speed of the sale, the government said in legal filings that the IRS used a special law that allows for a streamlined procedure if the agency determines the goods seized could “perish or waste” or become greatly reduced in value.

As a result, the IRS didn’t have to post advance public notice of the Mii’s sale or wait at least ten days before selling the goods, as is normally required. The provision also says a speedy auction can be used if storing the property would cost the IRS ‘great expense.'”

In response, the shop owners are suing in federal court, arguing “that the agents deliberately marked down the inventory to about $6,000 so they could claim it would cost more to store than it was worth. That comes to less than $4 per dress.” This allowed them to justify and proceed with the liquidation that destroyed their business, and forms a basis of their $1.8 million lawsuit.

That case has yet to be resolved. It doesn’t make up for the fact that everything hard-working couple had built over the last 30 years had been destroyed in one afternoon, when no crime had ever been committed. This is just one of a long list of citizen abuses that have happened under the egregious asset forfeiture laws that pervade the IRS and rob Americans of their civil liberties and their livelihoods, often with little to no recourse.