Facing criticism, IRS alters civil asset forfeiture policies – II

On Behalf of | Jun 19, 2016 | Tax Crimes

In our last post, we began discussing how the Internal Revenue Service recently announced that it would be revising its civil asset forfeiture policies going forward in response to growing public criticism and pressure from influential members of Congress.

We’ll continue this discussion in today’s post, exploring the changes proposed by embattled IRS Commissioner John Koskinen in a letter to Reps. Peter Roskam (R-IL), the chair of the House Ways and Means Oversight Subcommittee, and John Lewis (D-GA), a ranking committee member.

What did Koskinen indicate the IRS would be doing concerning civil asset forfeiture going forward?   

According to the commissioner, the IRS will be mailing out notices to the people and/or business entities implicated in more than 700 structuring investigations from October 2009 onward. These notices will inform them that they can file a petition with the agency to determine whether they qualify for a return of some or all of their seized money.

Those cases in which the parties were ultimately referred for prosecution will not receive a notice.

What happens after the petition is filed?    

It appears that once the petition is filed, the IRS will either make a recommendation to the Justice Department in civil judicial forfeiture cases or make a determination in administrative forfeiture cases. In the latter scenario, the petitioner would need to present evidence showing the funds at issue were secured legally and there must be no evidence of illegal structuring taking place.

When will these notices be mailed?

Koskinen’s letter indicated that the notices were mailed last week.

Did the IRS commissioner state that the agency would be changing anything else about its civil asset forfeiture policies going forward?

Interestingly, Koskinen also made clear that henceforth all IRS agents will be required to include evidence demonstrating an illegal source in sworn affidavits prior to seizing money.

It will be interesting to see how much of a difference all of this makes going forward. Stay tuned for updates.

If the IRS has accused you of any sort of tax-related malfeasance, consider speaking with an experienced legal professional as soon as possible.