Following is the type of hypothetical that has turned into a harrowing reality for a sufficient number of Americans to warrant a close congressional look at one problematic government program and foster some material changes to it.
The proprietor of a small “mom and pop” store — often something like a family-run pharmacy or neighborhood grocery store — makes recurrent bank deposits of cash receivables. Those transactions understandably feature money in an amount under $10,000. Notably, anything at or above that threshold triggers IRS reporting requirements under the federal Bank Secrecy Act.
That legislation was enacted some years back to give authorities insight into unlawful cash-linked behaviors, like money laundering tied to drug trafficking.
It has turned out to be the case in myriad instances in recent years that IRS agents and other law enforcers have come to view many deposits of just under 10 grand as unlawful efforts to bypass the federal reporting mandate, with the intent of depositors allegedly being to hide gains realized through criminal behavior.
Although that suspicion has indeed yielded arrests in bona-fide cases, it has also resulted in the flat-out summary seizures of good-faith citizens’ cash and other assets pursuant to a program called asset forfeiture. The IRS smells illegal activity and simply pounces, depleting bank accounts, taking homes and confiscating other property. In the past, some people who did not commit any criminal act have struggled mightily for years — sometimes in vain — to get their property back.
Many members of Congress have looked with disfavor and suspicion on the forfeiture program, which has reportedly padded IRS coffers with more than $240 million in seizures in recent years.
Although the inflow might continue, House members want to see program requirements materially tightened up going forward. Last week, the House unanimously passed a bipartisan bill that, if ultimately enacted as law, will put stricter controls in place to regulate seizures, enhancing citizens’ rights in the process.
“It’s encouraging to see hundreds of representatives stand together against this inherently abusive practice,” noted one commentator in the wake of the bill’s passage.