According to testimony given at a hearing led by U.S. Congressman Peter Roskam (R-IL6) last week, the IRS owes 75 percent of taxpayers refunds for wrongful civil asset forfeiture seizures. Despite this, only 16 percent have received refunds.
For three years, Roskam, who ranks fourth among the House Republican leadership, has led the fight in Congress to stop abuses of civil asset forfeiture by the IRS. His work has broad bipartisan support. In 2017, together with John Lewis (D-GA5), Roskam pushed to have refunds given to those who had had assets taken without reason.
Roskam also cosponsored the Restraining Excessive Seizure of Property through the Exploitation of Civil Asset Forfeiture Tools (RESPECT) Act with Joseph Crowley (D-NY14) in 2016. Had the bill become law, the IRS would have needed to charge the property owner with a crime before being allowed to seize their property. The House passed the bill 415-0.
“Today we took a big step toward delivering justice for victims of IRS abuse,” said Roskam at the time. “It’s clear to everyone involved that the IRS and DOJ abused their authority and took money from people who did nothing wrong. With today’s legislation, we’re making sure they can never do it again.”
The bill was the result of a two-year investigation by the Ways and Means Oversight Subcommittee examining the use of civil asset forfeiture by the IRS. According to the Bank Secrecy Act of 1970, cash transactions exceeding $10,000 in one day are automatically reported to the Financial Crimes Enforcement Network. Here, they are flagged for possible investigation for tax evasion or money laundering.
The cases investigated by the subcommittee involved companies which “structured” their cash transactions to make sure they were below the $10,000. If the IRS saw multiple cash transactions just below the $10,000 limit, they often became suspicious that the company is engaged in illegal activities. From here, the IRS could then seize the company’s assets based purely on this suspicion. They would not need to file criminal charges to do so.
A government report published on March 30 this year, stated that the IRS “mainly pursued law-abiding citizens and businesses when seizing assets in civil forfeiture cases because they were easier to go after.” Between 2012 and 2014, the IRS seized $17.1 million across 231 cases.
“The IRS has acted particularly egregiously in regard to civil asset forfeitures, and Congress has a responsibility to hold them accountable on behalf of the people we represent,” explained Roskam.
Despite receiving unanimous support in the House, the Senate’s companion bill, cosponsored by Tim Scott (R-SC) and Sherrod Brown (D-OH) was passed over by the Senate leadership and never voted on.
This year, the provisions of the RESPECT Act were included in the Taxpayer First Act which seeks broad reform of the IRS. The bill passed the House unanimously on April 18. Although it would not reform the underlying civil asset forfeiture procedures which have increasingly come under attack as promoting “policing for profit,” it should at least reduce abuse of the system by the IRS.
The Taxpayer First Act now moves to the Senate for consideration.
Civil Asset Forfeiture Attorney
If your lawful property has been seized, then you should hire a lawyer. Contact us to set up a free initial consultation and work with one of Florida’s most experienced civil forfeiture defense attorneys.