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Government The Almighty Buck United States

Law Lets IRS Seize Accounts On Suspicion, No Crime Required 424

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."
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Law Lets IRS Seize Accounts On Suspicion, No Crime Required

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  • by Anonymous Coward

    It's time for the people to take back the world. The massive bureaucracy with its bloated laws and indifferent employees have got to shrink!

    • by flyneye ( 84093 )

      I agree. Close your bank accounts, use check cashing services and pay everything with cash or money orders.
      Done by enough people, loudly enough, would be incentive to get stodgy steak-fed Congress-clowns to fix their blunder.
      Likely? No. But , I can see there will be outcry if they abuse this law publicly enough. More stupid bullshit from the "superior" overlords we elected. Wait! You elected them! I didn't vote for any Repubmocrats! You did!
      You Goddamn fix it! You made the mess, now clean it up! And quit vo

      • by queazocotal ( 915608 ) on Sunday October 26, 2014 @09:18AM (#48233797)

        https://www.youtube.com/watch?... [youtube.com]
        Last Week Tonight with John Oliver: Civil Forfeiture (HBO)

        • Whoa, that's messed up!

        • by fafalone ( 633739 ) on Monday October 27, 2014 @02:00AM (#48238389)
          Hey, it could be worse right? It's not like they'll forcibly rape you in the ass without evidence.

          Oh, wait. [huffingtonpost.com]

          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 [buzzfeed.com]), 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).
      • Re: (Score:2, Funny)

        by Anonymous Coward

        Not a good idea either, since the cops can seize the cash. So between the cops and the IRS, you need to resort to barter. Better carry your assets in the form of stainless steel nails that can be weighed by the pound.

      • by ruir ( 2709173 )
        Have you noticed it is increasingly difficult to find higher denomination bills even when withdrawing larges amounts of cash? Yep, war on "drugs" my ass.
      • by slick7 ( 1703596 ) on Sunday October 26, 2014 @10:20AM (#48234043)
        The IRS is grabbing everything they can because of the BRICS alliance. The banksters have taken too much, for too long, and now the backlash is poised to bring it all to a grinding halt. First it was the bail-out. Now it will be the bail-in. Look at the bankster rules, your money in the bank is NOT your money. You deposited it and you can withdraw it ( for now ) during bankster hours, however, a time is soon approaching where this will end. Putin kicked out the Rockafellers out of Russia after paying off their debt to the crooks. Now look what is happening to Russia. The same thing will happen to the U. S. when the shtf. The Babylonian banking system needs to be cleaned from the top, down. Repossess these bastards with the same cold-blooded efficiency of a foreclosure.
      • by BringsApples ( 3418089 ) on Sunday October 26, 2014 @11:03AM (#48234233)
        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.
        • by julesh ( 229690 ) on Sunday October 26, 2014 @04:31PM (#48235897)

          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.

        • by jayveekay ( 735967 ) on Sunday October 26, 2014 @04:48PM (#48235993)

          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.

      • by CanHasDIY ( 1672858 ) on Sunday October 26, 2014 @11:38AM (#48234395) Homepage Journal

        I agree. Close your bank accounts, use check cashing services and pay everything with cash...

        Until you get pulled over by a police officer and he confiscates all your cash under the exact same fucked up law.

      • Comment removed based on user account deletion
        • by LVSlushdat ( 854194 ) on Sunday October 26, 2014 @05:29PM (#48236225)

          No, you pretty much have to have a bank account nowadays, whether it's safe from the government or not. Try keeping your balance as low as possible to minimize the risk.

          Ummm... Banks can suck my balls.. I've had my money in a credit union for the last 30 years or so.. They don't fee you to death, getting a loan is a piece of cake, and usually as convienient (or sometimes moreso) as a bank. Not to mention, if you have a problem, which I did, once, with my current credit union, I placed a call to the CEO of the credit union, whose phone number is plainly listed on the CU website.. Problem was solved WHILE I WAS on the phone with him... Try THAT with a bank... I dare ya..

    • by Wonko the Sane ( 25252 ) * on Sunday October 26, 2014 @09:02AM (#48233749) Journal

      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.

      • by peragrin ( 659227 ) on Sunday October 26, 2014 @09:11AM (#48233781)

        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

        • What happens when bitcoin crashes?

          When the exchange rate goes down, I interpret it as a pay raise.

          Right now, my expenses are far lower than my income, so I'm adding to my savings substantially every month.

          Over the last few months as the exchange rate has gone down, the result has been that the number of bitcoins I am paid has been going up, therefore the rate at which my savings is accumulating has been increasing.

          Intra-month fluctuations don't affect me, because I sell what I need to cover expenses on the

          • by Xenx ( 2211586 ) on Sunday October 26, 2014 @10:45AM (#48234161)
            Sure, you can go to another country. But, you are in the USA. Regardless of your opinion on it, you're responsible for paying (or not) your taxes.
            • by LynnwoodRooster ( 966895 ) on Sunday October 26, 2014 @01:14PM (#48234859) Journal
              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.
            • by Charliemopps ( 1157495 ) on Sunday October 26, 2014 @02:57PM (#48235373)

              Sure, you can go to another country. But, you are in the USA. Regardless of your opinion on it, you're responsible for paying (or not) your taxes.

              Given what our government does with most of our tax dollars, I'd argue you have a moral obligation to deprive them of as much money as possible. That said, the IRS is the scariest, most lawless 3 letter agency we have. I don't screw with them and I don't recommend you do either.

          • by Anonymous Coward on Sunday October 26, 2014 @10:49AM (#48234179)

            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.

          • Comment removed (Score:5, Informative)

            by account_deleted ( 4530225 ) on Sunday October 26, 2014 @10:52AM (#48234197)
            Comment removed based on user account deletion
        • While bitcoin remains volatile it is smart to hedge against this volatility holding another form of currency. This way the consumer can actually benefit from the volatility of bitcoin by only spending Bitcoins when the are valued higher than the purchased price or when they were received, otherwise spend your Fiat. In order to do this one must have one to two weeks of spending cash saved; but shouldn't everyone encourage this behavior anyways instead of living paycheck to paycheck?

          Some companies and indi

        • if you are not paying taxes the IRS can treat you like they treated Al capone.

          It certainly will be interesting to see how the IRS and authorities deal with bitcoin in the future. How do they find funds they don't know exist or belong to an individual? How do they access capital gains on assets that are spent, lost or transferred to a wallet not associated with your identity? How do they seize funds that can be made immune to asset forfeiture?

      • Re: (Score:2, Insightful)

        by rmpotter ( 177221 )

        Sure, you can freeload in your own country & take advantage of the infrastructure that other people pay for. Do you think your approach can scale?

        • by codebonobo ( 2762819 ) on Sunday October 26, 2014 @11:07AM (#48234243)

          Sure, you can freeload in your own country & take advantage of the infrastructure that other people pay for. Do you think your approach can scale?

          You are making two flawed assumptions. The poster never gave an indication as to whether or not he pays taxes, he merely insinuated that he doesn't care about or participate in politics. Secondly, if we assume he is avoiding paying taxes, you cannot automatically posit that he doesn't contribute to the country or infrastructure with the funds saved. Many anarchists are conscientious objectors who will purposely invest money not paid towards funding the military industrial complex or subverting our privacy for non-profit causes instead.

      • Umm, the federal government has already seized someone's bitcoins, they could do the same to yours if they so chose.
  • 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. they should really just get a safe deposit box and keep the cash in there and mostly use cash in their daily life

    • by Anonymous Coward on Sunday October 26, 2014 @08:46AM (#48233685)

      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.

    • Re: (Score:3, Insightful)

      by Anonymous Coward

      most of the examples in the article are people highly likely to be cheating on their taxes by running a cash only business

      What happened to be "innocent until proven guilty"? Nothing wrong with investigating people with hard-to-track business models. But fleecing them just because their business model makes total control harder to do? Not exactly an incentive to be honest when you are going to be fleeced anyway, is it?

    • by itzly ( 3699663 )
      If they put their cash in a box, what's going to stop federal agents taking the box, using the argument that anybody that keeps their cash in a box is highly likely to be cheating on their taxes ?
      • by alen ( 225700 )

        they have to know about the box in the first place. what sets them off in this case is you have people running a small business and depositing thousands of dollars into their bank accounts, but under the $10,000 reporting requirement. and doing it on a regular basis. and if you look at their tax returns they are probably running the business for a small profit.

        if you have cash in a safe at home and pay for things in cash, no one will ever know

        • by itzly ( 3699663 )
          Running a small business without putting money in the bank is just as much reason to investigate. And if they do an audit on a restaurant, and there's a bunch of stuff, like food stocks, equipment, furniture, vehicles, that aren't in the books, it won't take a genius to figure out what's going on.
          • by alen ( 225700 )

            not if you have a good accountant who reports losses in the right years and profits small enough to let you live on in others

      • by DingerX ( 847589 )
        Actually, if they put their cash in a box, local police can seize it, as that much currency is only hoarded for criminal purposes.
        • by alen ( 225700 )

          the cops will need a search warrant to enter the house. that takes some evidence and can be contested by the worst legal aid lawyers. this is why they are seizing from banks accounts, faster, easier, no warrant, very little legal oversight and the burden of the cost and time of getting money back is on the person who lost the money

        • Actually, if they put their cash in a box, local police can seize it, as that much currency is only hoarded for criminal purposes.

          They cannot seize a multi-sig Bitcoin wallet either through hacking or by physical invasion. The assets can even be designed to automatically move with a dead mans switch after a certain length of time or moved to a nTimelock where the funds cannot be spent for a certain length of time.

    • It's a bad law and I don't think... kinda says it all. I do think and I believe the Fed runs the biggest cash business of all. Stop the printing presses, back a government currency backed by precious metals. Hang all these "above the law" bankster cartels and their bought-dog politicians. Rescind the insane belief that corporations are persons. Go after the real persons in these corporations and put them out of our misery.
  • by SpankiMonki ( 3493987 ) on Sunday October 26, 2014 @08:47AM (#48233691)
    I guess the IRS saw the 2.5B dollar haul [chicagotribune.com] 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!!!"
  • by ganjadude ( 952775 ) on Sunday October 26, 2014 @08:50AM (#48233709) Homepage
    Just because something is a law, does not make it A- correct, or B - constitutional. Taking from people with no proof of a crime, is unconstitutional. I hope these people get a damn good lawyer, and sue the fuck out of the IRS. I mean the IRS has always been a clusterfuck, but i cant think of any other time in my admittedly short life that the IRS has been involved in so many scandals
  • by Applehu Akbar ( 2968043 ) on Sunday October 26, 2014 @08:54AM (#48233727)

    ...Is going to have to be to drive a silver stake through the whole civil forfeiture beast.

  • by lennier1 ( 264730 ) on Sunday October 26, 2014 @09:07AM (#48233765)

    Since legalized theft through Civil Forfeiture pumps billions of dollars every year into the coffers of police departments throughout the country, the IRS simply wants their piece of the pie as well.

  • by account_deleted ( 4530225 ) on Sunday October 26, 2014 @09:09AM (#48233773)
    Comment removed based on user account deletion
  • by NotSoHeavyD3 ( 1400425 ) on Sunday October 26, 2014 @09:21AM (#48233809) Journal
    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.
    • Re: (Score:2, Insightful)

      by Anonymous Coward

      Asset forfeiture law has been violating the Constitutional rights of suspected drug dealers since the 80s. The public seems to enjoy this phenomenon, especially since many of the non-cash assets are sold at a fraction of their market value at auction by the police departments that perform the seizures. Apparently we Americans don't mind running roughshod over the rights of drug traffickers, but if you try to wipe out some Mexican restaurant owner that *might* be a tax cheat, well then we have a problem wi

    • by Solandri ( 704621 ) on Sunday October 26, 2014 @04:02PM (#48235729)
      When they seized the assets of drug dealers, I did not speak out because I was not a drug dealer.
      When they seized the assets of the drug users, I did not speak out because I was not a drug user.
      When they seized boats from boat owners, I did not speak out because I was not a boat owner.
      etc...

      It was a violation of the Constitution in the 1980s when boat owners were complaining about losing their boats because (unbeknownst to them) a passenger had a joint in their pocket. But the public was more interested in hearing that a pothead had been caught and punished, before turning the channel so they could watch the season finale of Dallas. As with all things, government expands until it feels pushback from the public, and we're only just getting to that point.

      It is an object lesson on why laws must be judged based on the principles they follow, not on the type of people that are being targeted. Why before they're convincted we should treat terrorist suspects as if they're innocent.
  • by argStyopa ( 232550 ) on Sunday October 26, 2014 @09:27AM (#48233841) Journal

    ..at least from the article it seems to me that the victims in this case are entirely innocent.

    It seems entirely unjust, and obviously so.

    I'd say it's a perfect case where someone would go to their congressman or senator and start getting some crap stirred up.

  • by Anonymous Coward

    On Thursday, in response to questions from The New York Times, the I.R.S. announced that it would curtail the practice, focusing instead on cases where the money is believed to have been acquired illegally or seizure is deemed justified by “exceptional circumstances.”

    Oh, well, that's okay then, liberty and justice for all. Nothing to see here. "Move along. I said, move the !@#$ along!"

    Thank goodness the system is self-correcting. All you need to do is catch the !@#$sucking, mother!@#$ing sons of whores doing it, and they'll stop. Simple. Hoorah! USA!1!

    Why did it take a MSM article for them to think of whether it was acquired illegally or that they had justification? When do we get our Magna Carta?

  • Oh boy ... (Score:5, Insightful)

    by golodh ( 893453 ) on Sunday October 26, 2014 @09:35AM (#48233881)
    First we pass a law that is an open invitation to unintended use (like this seizure law) because it conveniently neglects to mention where it is to be applied and where it isn't.

    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?

    • Am I the only one who thinks that Congress is to blame here (for passing sloppy legislation), not the IRS or The Government?

      Allowing an action, mandating an action, and performing an action are all separate things. Congress didn't mandate this action (for which the IRS could be viewed as ethically blameless as long as they sought ways to mitigate damage). According to the summary, the action was allowed, so while not legally culpable, the IRS can be blamed for poor ethics by choosing to exercise power in this fashion. Congress is to blame for one thing (allowing this activity), and IRS the other (choosing to engage in this

      • Put this way, I agree with you.

        My comment was posted before I'd thought things through. The Slashdot virus must have infected me.

    • I blame people who say idiotic things like "if you've got nothing to hide you've got nothing to worry about".

  • I'm not sure I understand why people don't take the matter to court (and involve the press) to expose the unconstitutional actions of the government. How could a court decide in favour of the government when the person hasn't committed a material crime?
    • Re: (Score:2, Insightful)

      by Anonymous Coward

      Because fighting in court demands money: the one they just took out from you.

    • Because it's very expensive.

    • by NormalVisual ( 565491 ) on Sunday October 26, 2014 @11:08AM (#48234253)
      I'm not sure I understand why people don't take the matter to court (and involve the press) to expose the unconstitutional actions of the government.

      Because the Supreme Court has already ruled [wikipedia.org] that it's not unconstitutional. I personally disagree with their opinion, but that's how the law is interpreted at present. You can prove you're an innocent owner, but there's legally absolutely nothing to keep the government from taking the property anyway.

      It's disturbing, because when there aren't any legal avenues available to address this kind of theft, eventually people with nothing left to lose will start to work outside the legal system for redress.
  • Rotten (Score:5, Insightful)

    by PopeRatzo ( 965947 ) on Sunday October 26, 2014 @10:48AM (#48234175) Journal

    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.

  • by walterbyrd ( 182728 ) on Sunday October 26, 2014 @12:36PM (#48234673)

    Repubs, and dems, don't give a crap. They are both owned by corporations. Congress has, something like, a 10% approval rating, and a 90% retention rate.

    Throw the bums out, vote 3rd party. It is the only way we will ever have real change.

    • That's a nice idea, but the majority has been brainwashed into believing that any vote that's not D or R is "wasted". Ridiculous, but that's what happened.

      Sadly, even the 3rd parties don't give some of us much to work with. I generally like Libertarian ideals, but the reality is that if they got everything they want we would end up with a government by and for the corporations. Which is basically what we have now, other than that they wouldn't bother to try to hide it. Greens would do basically the same, bu

  • by cellocgw ( 617879 ) <cellocgw.gmail@com> on Sunday October 26, 2014 @12:40PM (#48234689) Journal

    Quote: "'They're going after people who are really not criminals,' said David Smith, a former federal prosecutor "

    Ummm, hey Mr. Lawer Dude: why should they be allowed to impound ANY non-criminal item from ANYONE? It's one thing to remove, say, guns and illegal drugs when arriving with a warrant. It's another to say "hey, I bet that cash and those guns are illegal so let's take them " (and the car they're in -- the car is often taken as well) It's been pretty well established that local police depts use the forfeiture laws as a moneymaking operation. How about we take property the old-fashioned (joke) way: after conviction, or at the very least, grand-jury indictment?

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