CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. IRS Pushed To Return Past Civil Asset Forfeitures

IRS Pushed To Return Past Civil Asset Forfeitures

by Mike Godfrey,, Washington

28 March 2016

The US House of Representatives Ways and Means Oversight Subcommittee sent letters on March 23 to the Treasury Department, the Internal Revenue Service (IRS), and the Department of Justice (DOJ) to review all civil asset forfeiture cases and return money to victims where warranted.

Signed by all the Subcommittee's members, the letters called on the agencies "to give all due consideration to all pending petitions," "to remit funds as appropriate," and to "establish a process to review all similarly-situated cases to determine if funds should be remitted."

In February 2015, the Subcommittee held a hearing at which it was testified how the IRS had seized funds from small businesses based on allegations that they were "structuring" their cash transactions – i.e., making transactions of under USD10,000 to avoid anti-money-laundering banking law reporting requirements.

It was then pointed out that, in a number of cases, the IRS had used the law against small business owners whose funds came from legal sources. In his testimony to the Subcommittee, IRS Commissioner John Koskinen apologized to those businesses and also confirmed that, after the practice was publicized in October 2014, the IRS had decided to "focus its resources on cases where evidence indicates that the structured funds are derived from illegal sources."

In August last year, the Subcommittee called on the IRS and DOJ to review all past cases in which the IRS had seized money that came from legal sources and to return those funds if appropriate. However, at a follow-up meeting with the IRS in February this year, the agencies appeared not to have made any progress on this front.

According to the letters, the IRS said at that meeting that "the agencies were unsure they legally could review closed cases and that, even if they did have the legal authority to review the cases, the agencies may not have created or maintained a sufficient evidentiary record that would allow them to determine whether remitting funds would be justified. Moreover, even if the agencies reviewed cases and determined that justice would require remitting the funds, there may be no money available to make the victims whole."

The letters professed that the Subcommittee was "troubled by the agencies' response." It was added that "the agencies' representatives at that meeting did not provide any legal reasoning for why such a review would be illegal, and they seemed unconcerned that the IRS and DOJ's actions in these cases unfairly harmed American citizens and have undermined Americans' trust in their government."

TAGS: money-laundering | compliance | tax | small business | business | tax compliance | law | banking | Internal Revenue Service (IRS) | tax authority | United States

To see today's news, click here.


Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »

Stay Updated

Please enter your email address to join the mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.

To manage your mailing list preferences, please click here »