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Law Lets IRS Seize Accounts On Suspicion, No Crime Required
schwit1 writes: The IRS admits to seizing hundreds of thousands of dollars of private assets, without any proof of illegal activity, merely because there is a law that lets them do it. From the article: "Using a law designed to catch drug traffickers, racketeers and terrorists by tracking their cash, the government has gone after run-of-the-mill business owners and wage earners without so much as an allegation that they have committed serious crimes. The government can take the money without ever filing a criminal complaint, and the owners are left to prove they are innocent. Many give up and settle the case for a portion of their money.
'They're going after people who are really not criminals,' said David Smith, a former federal prosecutor who is now a forfeiture expert and lawyer in Virginia. 'They're middle-class citizens who have never had any trouble with the law.'" The article describes several specific cases, all of which are beyond egregious and are in fact entirely unconstitutional. The Bill of Rights is very clear about this: The federal government cannot take private property without just compensation."
'They're going after people who are really not criminals,' said David Smith, a former federal prosecutor who is now a forfeiture expert and lawyer in Virginia. 'They're middle-class citizens who have never had any trouble with the law.'" The article describes several specific cases, all of which are beyond egregious and are in fact entirely unconstitutional. The Bill of Rights is very clear about this: The federal government cannot take private property without just compensation."
it's a bad law and i don't think it should exist but most of the examples in the article are people highly likely to be cheating on their taxes by running a cash only business and under reporting their revenues.
Ok.
But there are existing processes to investigate and prosecute tax cheats. Use them.
I guess the IRS saw the 2.5B dollar haul local cops have brought in since 9-11, and said "oooo look! I bet we can do that too...thanks 9-11! thanks Patriot Act!! thanks terrorists!!!"
The revolution already happened - it's called Bitcoin.
I've spent the last year bank-free.
I live in the US, but work for a Swiss software company and get paid the CHF equivalent of $160k/year.
They pay me in Bitcoin.
I have no bank account.
Everything I need to buy I either pay for directly in Bitcoin, or in cash.
When I need cash, I use LocalBitcoins to find somebody who wants to trade.
The "massive bureaucracy with its bloated laws and indifferent employees" can fuck off. They can point their guns at secp256k1 all they want but it won't do them any good.
I just have to laugh at people who still care about or participate in politics - it's a complete waste of time. Within a few years Bitcoin has accomplished the change which many decades of voting have failed to provide.
IRS agent: Gentlemen you're accounts have all been seized, no doubt you're curious as to why.
Walmart CEO: Yeah what gives? is this a mistake?
Oracle CEO: We filed our taxes last month! as you can see we owed nothing.
GE CEO: Hes right! we didnt owe a damned thing on that 20 billion in profit we made
IRS Agent: yes through a system of complex accounting and offshore assets you've managed to not only avoid paying taxes but in some cases demand millions in tax refunds. So we got to thinking...who would be so nefarious as to intentionally defraud the government in such a malevolent way. And thats when we decided you're all drug dealing terrorist shariah muslim ISIS fighters.
Microsoft CEO: we are not! we make helpful electronics and software for everybody to become more productive!!
IRS Agent:....Thats exactly what id expect some Zune making terrorist to say...
Good people go to bed earlier.
What happens when bitcoin crashes? Also as you live in the USA you are subject US taxes. even if it is bitcoin. if you are not paying taxes the IRS can treat you like they treated Al capone.
The IRS
i thought once I was found, but it was only a dream.
https://www.youtube.com/watch?...
Last Week Tonight with John Oliver: Civil Forfeiture (HBO)
Since it sounds like it breaks multiple amendment in the bill of rights, to be specific the 4th, 5th, and 8th. Let's see, the 4th prohibits unreasonable seizures which this is. You'd think it breaks the 5th since that literally says "nor be deprived of life, liberty, or property, without due process of law". (How is taking property with no ability to get it back not expressly prohibited by that?) Finally it breaks the 8th in my mind because "Excessive bail shall not be required, nor excessive fines imposed, nor cruel and unusual punishments inflicted." to me means the only appropriate punishment if there has been no crime proven is no punishment at all.
Did you know 80 to 90% of the moderators on slashdot wouldn't recognize a troll even if one dragged them under a bridge.
Then we come over all indignant when that law (which is "on the books") is used outside its originally intended area of application.
Am I the only one who thinks that Congress is to blame here (for passing sloppy legislation), not the IRS or The Government?
Might it not be a good idea to work harder to phrase legislation in such a way that it's difficult to abuse? Or would that cramp the style of "tough-on-crime" politicians?
No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation.
It's a Fifth Amendment issue, but I think it's more to do with the bolded text.
Please stand clear of the doors, por favor mantenganse alejado de las puertas
Taking from people with no proof of a crime, is unconstitutional.
I agree with you 100%, but the history of civil asset forfeiture would seem to indicate the courts beg to differ.
Please stand clear of the doors, por favor mantenganse alejado de las puertas
This seizure of assets stuff is one of the biggest scandals that isn't being widely discussed in the media. It's happening with organizations with police powers at every level in the US, from local sheriff's to municipal police right on up to Federal police agencies like the IRS.
The most insidious part of the story is that it is really nothing more than a tool of upward redistribution of wealth - upward. Like most things in government since at least 1980, the government is all about redistributing wealth upwards.
By far, asset seizure is being used more often against people in the lower half of the socio-economic scale. In Chicago, I see it every day with cars being booted for non-payment of parking tickets, and it's accelerated since the cost of street parking went up 20-40x over the course of three years.
You are welcome on my lawn.
FYI, the US and Libya are the only two nations that tax their former citizens _after_ they renounce citizenship (for the US, it is 10 yrs. after). You can tell the US to fuck off, but you might find it puts a crimp in your abilty to travel, even with your shiny new non-US passport.
If you are a US citizen, you must file a US federal income tax statement regardless of who you are working for or where. Recent legislation has put a lot of pressure on other countries to report earnings of US expats there. If you were to fall afoul of the local tax authorities (which is not a rare occurrence for expats, especially those who boast a large income as you do), it's quite likely the news will reach the IRS too. Furthermore, to obtain residency in many countries, you must show proof of income, and this always means a pay slip or a bank statement. Bitcoin salary or not, circumstances may force you to hold a bank account nonetheless.
Only those that have been depositing less than $10,000 in a way that 'leads folks at the bank to think' (triggering?) that you are doing it in a way to avoid depositing $10,000, in a way to avoid "triggering".
So if you deposit $10,000 in a bank, it causes (you and) the bank to file paperwork that you deposited $10,000 - this is called triggering.
Triggering: A 1970 anti-money-laundering law known as the Bank Secrecy Act spells out the rules for large cash withdrawals. In general, banks must report any transaction involving at least $10,000 in cash. That includes not only withdrawals but also deposits, currency exchanges (such as swapping dollars for euros or Japanese yen) and the purchase of traveler's checks.
So in this case, if you deposit slightly less than $10,000 then that also triggers the bank to privately report you to the government. All of the people mentioned in the article deposited slightly less than the $10,000 to avoid triggering, and they knowingly avoided it, although for different reasons (some did it because they thought it was a hassle for the bank, and they were trying to be nice?). So if you need to deposit $10,000+ in an account, then fucking do it! In this case, it "triggers" an event, but that event doesn't remove your money.
Politics; n. : A religion whereby man is god.
They especially can't afford a good lawyer after their assets have been seized.
READ THE ARTICLE! They can take the cash and then negotiate with the 'accused', (well - accused isn't the right term since they haven't accused anyone of anything), lets say 'suspissioned' to decide what percentage they are going to give back to keep it from costing the ... lets use the word 'VICTIM' from being bankrupt with legal fees and the futile aspect of fighting the IRS. ...
"First they came for the Tea Party, but I did not speak out because I wasn't a fiscal conservative."
"They they came for
Ever seen a big government that wasn't bad? I sure can't think of any.
An enigma, wrapped in a riddle, shrouded in bacon and cheese
If they've done nothing wrong, they have nothing to worry about.
I hope you were being sarcastic but it's modded 'insightful' so that's not how people are reading it! Even if you are completely innocent of all wrong doing having your accounts frozen will have a massive impact on your life. Suddenly accessing your paycheque to pay the mortgage/rent, purchase food etc. becomes impossible all you have is you cash on hand for however long it takes them to realize that you are innocent and to pay it back. That will have a massive impact on your life and to be able to do that simply because some overworked policeman has a suspicion seems highly unreasonable. In fact I'm guessing that you'll need to go to court to get the money back and who knows how you'll be paying for the lawyer or whether you can also reclaim the expenses of the court case from the US government.
I'm all for supporting law enforcement but seizing money on a suspicion without any court oversight is just wrong. If they need to act fast then let them freeze an account for 24 hours to give them the time to go to a court and make a case for seizure. This gives them the ability to act rapidly, keeps the system open to public scrutiny and would ensure that they have some evidence before peoples lives are impacted. Why do governments find it so hard to put reasonable balances like this into laws?
It went out of fashion in the 1990s. Because War On (some) Drugs.
Seriously, people, this civil forfeiture bullshit has been going on since the late 20th century. It's legal roots go back to the 1600s, but it was the U.S. in the 1990s where it started to get egregious.
Are y'all just learning about it? Start with the wik for a decent overview.
Tom Swiss | the infamous tms | my blog
You cannot wash away blood with blood
And cash gets stolen by police using "civil forfeiture" laws - apparently having a lot of cash on you is good enough reason.
Perhaps you should get YOUR facts straight. The central law, the Bank Secrecy Act and its various amendments, which is what created this legal situation, were ALL passed by a Congress where BOTH Houses were controlled by the Democratic Party. These were not "Republican policies". Since they were signed into law by Republican Presidents, I must conclude that they were bipartisan,
It is possible this conclusion is wrong, so I will not argue with anyone providing evidence that this was primarily a Democratic Party idea (I can think of several explanations as to why a Republican President would sign a bill into law that he mildly disagreed with, but cannot conclude that any of those are true in this case without doing more work than I am willing to at this time).
Conclusion: This is not a "Republican policy". It is a bipartisan policy and should be unconstitutional (and that the Framers of the Constitution would be horrified that anyone could think that it was not).
The truth is that all men having power ought to be mistrusted. James Madison
The differences between our two parties on many important issues around privacy, rule of law, and freedom of speech are mostly negligable. Both parties are pretty pathetic, if not defacto evil.
Administrative seizures of money without an associated criminal case began in earnest in 2012. I don't recall, who was running the administration? Perhaps he had more flexibility after he was re-elected.
If you're a US citizen OR green card holder, it doesn't matter where you reside or work. You owe taxes in the US. Even if you never step foot in the US for the entire year, you still have to report your worldwide income and file a tax return - and pay taxes owed.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
If they have YOU, there is no reason to have your bitcoins. Having a vault full of cash, but no way to access it, is as good as not having any cash at all. With the IRS, you're basically presumed guilty until proven innocent, so they'll just hold you - or garnish your wages, or take your hard physical assets (cars, property, 401Ks, Social Security, clothing, computers) and continue to do so until you prove your innocence.
Browsing at +1 - no ACs, I ignore their posts. So refreshing!
I'll jump to the conclusion that government has already started going bad before it got big.
Very true. The ink was hardly dry on that "goddamn piece of paper". In fact there were many warning signs before the thing was drafted. The aristocracy is alive and well...
“He’s not deformed, he’s just drunk!”
> If they've done nothing wrong, they have nothing to worry about.
Are you kidding? The whole point of this is that you can have ALL of your stuff taken without the slightest hint you've done anything wrong. That's the whole point of this "due process" thing. It ensures that there is actually a reason to mess with you.
They can take your stuff and never give it back and they don't even have to try to prosecute you or anything.
You just lose your stuff and have to deal with all of the nice fallout of that.
Chances are, it will be a COMPUTER that spits out an audit request to trigger all nonsense.
Think automated DMCA takedown.
BTW, your attitude is how the really heinous stuff can happen. All of this bogus "it can't happen to me" or "it can only happen to the bad people" enables things like the purges of Stalin and Hitler's various atrocities. (our own japanese internment camps too btw)
A Pirate and a Puritan look the same on a balance sheet.
So in this case, if you deposit slightly less than $10,000 then that also triggers the bank to privately report you to the government. All of the people mentioned in the article deposited slightly less than the $10,000 to avoid triggering, and they knowingly avoided it, although for different reasons (some did it because they thought it was a hassle for the bank, and they were trying to be nice?). So if you need to deposit $10,000+ in an account, then fucking do it! In this case, it "triggers" an event, but that event doesn't remove your money.
At least one had an entirely different reason - they were banking their cash before it reached $10,000 each time because their insurance policy had a $10,000 limit on claims for cash. Another was described as depositing wildly varying amounts at regular intervals, apparently just banking their business's weekly takings (or whatever) that just happened to always be between $5k and $10k.
Yes, there were a couple of cases where the avoidance of the limit sounded to be intentional, but that wasn't the case in all of the instances presented in the article.
Let me guess, in 1970 when they passed this law they did not index the amount to inflation?
Inflation since 1970 means that in 2014 the amount triggering the law is about 84% lower than it was in 1970, and that in another 100 years your kids' weekly allowance will trigger the law. Given the inability of Congress to pass anything, I do assume that the law will be unchanged for the next 100 years.
If the $10,000 dollar amount were indexed to inflation then it would be about $61,000 in 2014 dollars.
Every business is guilty of structuring under these rules.
Yes, that's the beauty of it. Everyone can be stolen from. Right now, it's happening in small increments. If there's a real financial crisis, I can foresee every small business in the USA losing their money on the same day.
Please do not read this sig. Thank you.
Hey, it could be worse right? It's not like they'll forcibly rape you in the ass without evidence.
Oh, wait.
Thinking of cops as anything but thugs that view everyone else as the enemy, who they can lie to, kidnap, steal from, and beat/tase/mace with total impunity, is naivete now reserved only for the people who have not yet been unfortunate enough to catch a cops eye (which doesn't require doing anything illegal). These people think that not all cops are bad simply because they see them not abusing someone, and the fact that many targets of the police are criminals who need to be removed from society. That doesn't excuse the fact that any cop who doesn't, at least sometimes, violate peoples rights (the friendly cop who helped you out probably also civilly forfeited his department a new margarita machine/zamboni/trip to disney-all real, btw), is at a minimum covering for his buddies that do. The entire system is rotten to the core: there are no good cops, only cops that are less pure evil and closer to how cops should act (that is, they occasionally arrest someone who deserves it without violating their rights).