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IG: IRS Took $17.1M From Innocent People Over Banking Patterns

Image: IG: IRS Took $17.1M From Innocent People Over Banking Patterns
(AP)

By    |   Thursday, 06 Apr 2017 08:57 AM

The Internal Revenue Service seized $17.1 million from innocent people and businesses over how they managed their banking account, according to a Treasury Inspector General for Tax Administration (TIGTA) report.

In a classic case of seize first, ask questions later, TIGTA found that the IRS from 2012 to 2015 targeted individuals and businesses that on the surface seemed to be violating anti-structuring provisions — making deposits under $10,000 to avoid scrutiny and proper reporting under the Bank Secrecy Act (BSA).

The BSA is in place to identify profits from drug dealers or money laundering efforts e.g. and prosecute accordingly.

However, TIGTA found that the IRS' Criminal Investigation (CI) unit, using a strategy of "quick hits" — "where property was more quickly seized and more quickly resolved through negotiation" — instead targeted individuals and businesses whose income was legally obtained.

TIGTA looked at 278 random cases of the IRS enforcing anti-structuring provisions and found that 91 percent of them were bogus seizures; deposits under $10,000 were made out of necessity or because individuals were unaware of anti-structuring provisions.

As for fighting to get their money back, TIGTA found that "property owners were left to prove their innocence, and many gave up trying."

According to TIGTA:

  • In 54 cases, the property owners provided realistic defenses or explanations for deposits under $10,000.
  • In 43 of those cases, there was no evidence they were considered by CI.
  • In 202 interviews, the property owners were not adequately informed of important information, such as the purpose of the interview.
  • In 37 investigations, the Government appeared to have bargained non-prosecution to resolve the civil case.

"TIGTA determined that, in most cases, CI generally relied on the pattern of currency transactions to support the seizure rather than initially seeking information from the property owners," the report read.

"Most people impacted by the program did not appear to be criminal enterprises engaged in other alleged illegal activity; rather, they were legal businesses such as jewelry stores, restaurant owners, gas station owners, scrap metal dealers, and others."

The IRS said the practice of "quick hits" is no longer authorized, The Washington Post reported.

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The Internal Revenue Service seized $17.1 million from innocent people and businesses over how they managed their banking account, according to a Treasury Inspector General for Tax Administration (TIGTA) report.
IRS, millions, banking patterns
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2017-57-06
Thursday, 06 Apr 2017 08:57 AM
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