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The IRS Took $950K from Andrew Clyde. His Case Inspired Federal Civil Asset Forfeiture Reform

guns-2203656_1920-200x300President Trump has signed into a law a bill reforming the use of civil asset forfeiture by the Internal Revenue Service (IRS). The bill passed both houses of Congress unanimously this year.

The bill was partially inspired by the case of Andrew Clyde. In April 2013, Clyde’s gun shop in Athens, Georgia, was doing amazing business. In response to fear that the Obama administration may limit access to firearms, Clyde’s store, Clyde Armory, was virtually empty.

“We had sold everything in the store. I normally have 1,500 guns in this store on display. There might have been 100 [left], maybe less than that,” said Clyde.

While Clyde was celebrating his success, the IRS seized $950,000 from his account. “I didn’t have any money for payroll,” explained Clyde. “I had to go borrow $80,000 in order to make payroll and to pay some of the accounts payable of the stuff that had started to come in.”

The IRS used civil asset forfeiture to take Clyde’s money. This is a legal procedure where law enforcement agencies may take an individual’s property or money if it is suspected of being involved in a crime. In most states, no criminal conviction—nor even a criminal charge—is required before property can be taken.

The IRS accused Clyde of “structuring” his bank deposits. “Structuring” is an illegal practice where an individual knowingly parcels what should be a single, large bank deposit into several smaller ones of less than $10,000 each. In this way, the individual is able to avoid reporting requirements. Structuring is often found in federal indictments involving financial crimes such as money laundering.

For his part, Clyde denies he was structuring payments and instead asserts his insurance only covered him for off-premises losses of $10,000. Regardless of this, the IRS never filed criminal charges against Clyde. “They audited my tax records for four years,” said Clyde, “and they found absolutely nothing.”

“I personally believe they thought I was an easy target. All they really wanted was money,” said Clyde.

After six months, the IRS eventually agreed to settle, and they returned $900,000 to Clyde. They did, however, retain $50,000.

“At that point, I decided that $50,000 was going to be my retreat,” said Clyde, a U.S. Navy veteran. “It was going to guarantee my survival, and it was going to allow me to retreat so I could fight another day.”

Clyde’s case helped inspire Representative Doug Collins of Gainesville, Georgia to introduce the Clyde-Hirsch-Sowers Respect Act, later known as the RESPECT Act. Under the RESPECT Act, the IRS may only use civil asset forfeiture to seize money in cases of structure after prosecutors have demonstrated probable cause that the money was obtained or used illegally. The bill was co-sponsored by Representative John Lewis of Atlanta, Georgia.

“For too long, hardworking individuals and small business owners like Andrew Clyde have fallen victim as the IRS has abused civil asset forfeiture,” said Collins. “With the RESPECT Act finally becoming law, law-abiding citizens can rest easy knowing they no longer have to fight the federal government just to prove their innocence.”

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.

Source

2019-07-03 Trump Signs Collins’ IRS Civil Asset Forfeiture Bill