Congress pursues legislation to fight IRS asset-seizure abuses

On Behalf of | Dec 12, 2014 | Tax Crimes

Last month, we wrote about a scandal involving seizures by the IRS of privately held bank accounts and other assets. The agency has been able to seize these assets without a warrant and without criminal charges under a process known as civil asset forfeiture.

The powers granted to the IRS and other government agencies are intended to help fight money laundering, terrorist organization funding and all other manner of financial crimes. But too often, civil asset forfeiture is used to take money from law-abiding citizens and small-business owners. And unless these individuals have the money, time and resources necessary to prove that their assets were not used for criminal purposes, they are essentially forced to let those assets go.

After major news outlets brought widespread attention to the issue, the IRS has essentially said it will no longer pursue forfeiture and seizure cases related to alleged “structuring,” except in circumstances deemed exceptional. But as the old saying goes: talk is cheap. What is to stop the IRS from going right back to its current practices once media attention dies down?

Thankfully, media reports have prompted bipartisan legislative action, which is a rarity these days. One proposed bill is called the “Taxpayer Protections Against Abusive Seizures Act.”

If passed, it would allow individuals to challenge the seizure of their assets in a very timely fashion. Within 14 days of receiving a notice that their assets had been seized, individuals could request a probable-cause hearing in court, which would need to occur within 14 days after the person filed the request. The law would ensure that if the hearing was not held in time of if the government failed to demonstrate probable cause for the seizure, assets would be automatically returned.

Hopefully, this bill or one like it will be passed without delay. Abuses of civil asset forfeiture laws are unacceptable, and all Americans deserve an opportunity to challenge such actions in court.

Source: Accounting Today, “Congressmen Introduce Bill to Curb IRS Civil Asset Forfeitures,” Michael Cohn, Dec. 11, 2014