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IRS Seizing Funds Without Even Bringing Charges

Yet more unintended consequences from the so-called War on Drugs. According to The New York Times, the IRS has been seizing funds from small businesses and individuals without even presenting a criminal complaint using a draconian law passed to prevent drug money laundering. Under the law the IRS can seize funds that appear to be suspiciously transacted to avoid a $10,000 limit to be flagged and it is incumbent on the person whose funds were seized to prove they are innocent rather than for the government to prove they are guilty.

Many of those who have had their funds taken are small businesses and low wage earners who give up fighting to get back their money despite doing nothing wrong. Those that are part of the process to seize the funds are allowed to keep portions of it, including law enforcement agencies that first identify the target of the seizure to the IRS. This perverse incentive structure means law enforcement can make up budget gaps by issuing more targets for seizure knowing those working class targets will likely not fight to get the money back.

Not surprisingly, law enforcement has been accused of abusing the unchecked power.

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.

“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.”

After being questioned about the flawed program by the Times the IRS said it would ease up on the practice of taking money from people and not bringing charges. Though the apparent ad hoc rule change will not apply retroactively so the people who have already had their funds seized won’t be getting them back.

It is worth remembering that while the mutilations to our society from the so-called War on Terror are more fresh, the War on Drugs was destroying civil liberties and a just order well before the towers fell. So while gargantuan funds are being directed to the homeland security industry they will merely augment a pre-existing police state apparatus created for the last “war.” Taste the freedom.

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Dan Wright

Dan Wright

Daniel Wright is a longtime blogger and currently writes for Shadowproof. He lives in New Jersey, by choice.