# Please explain the legality of an IRS money seizure. **URL:** \ **Category:** Factual Questions\ **Created:** [October 28, 2014, 6:22am UTC](https://boards.straightdope.com/t/please-explain-the-legality-of-an-irs-money-seizure/702721 "2014-10-28T06:22:44Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [October 28, 2014, 4:45pm UTC](https://boards.straightdope.com/t/please-explain-the-legality-of-an-irs-money-seizure/702721/41 "2014-10-28T16:45:27Z")
> [@Si\_Amigo](#): > > But there are always perks like a bigger office, quicker promotions and higher positions of power with more individual autonomy that come with raking in more money. A bigger paycheck isn’t necessarily the only thing driving employees to be “inventive”. 1. No. IRS employees have cubes, not offices. 2. Nope, promotions are almost entirely based upon having enough accounting courses, getting your CPA and seniority. Mostly seniority. 3. individual autonomy? It is to laff. It’s true that _management_ promotions are based more than they should be on office politics, brown nosing etc. But Managers dont seize funds. Line employees do. They are Civil Service bureaucrats. Promotion is mostly by “time in grade”. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [October 28, 2014, 4:46pm UTC](https://boards.straightdope.com/t/please-explain-the-legality-of-an-irs-money-seizure/702721/42 "2014-10-28T16:46:50Z")
> [@TriPolar](#): > > There was no underlying crime. She wasn’t required to pay a fine, instead they stole her money on the fiction that it was assets from criminal activity. 1. How do you know? 2. She deliberately structured her deposits to avoid reporting laws. That’s illegal. ---
**Author:** ![Telemark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/telemark/32/372_2.png) [@Telemark](https://boards.straightdope.com/u/Telemark)\ **Post date:** [October 28, 2014, 4:48pm UTC](https://boards.straightdope.com/t/please-explain-the-legality-of-an-irs-money-seizure/702721/43 "2014-10-28T16:48:28Z")
> [@Si\_Amigo](#): > > A bigger paycheck isn’t necessarily the only thing driving employees to be “inventive”. But for all intents and purposes, it’s the only one that matters. ---
**Author:** ![Si\_Amigo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/si_amigo/32/2877_2.png) [@Si\_Amigo](https://boards.straightdope.com/u/Si_Amigo)\ **Post date:** [October 28, 2014, 4:48pm UTC](https://boards.straightdope.com/t/please-explain-the-legality-of-an-irs-money-seizure/702721/44 "2014-10-28T16:48:56Z")
> [@DrDeth](#): > > That was\* their \*term. > Where does any “small, cash-only restaurant” get that much cash in a short period? Yes, I wasn’t saying you said that. _They_ said that. It’s always _they_ who say infer such things. 😃 ---
**Author:** ![Little\_Nemo](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/little_nemo/32/3120_2.png) [@Little\_Nemo](https://boards.straightdope.com/u/Little_Nemo)\ **Post date:** [October 28, 2014, 4:53pm UTC](https://boards.straightdope.com/t/please-explain-the-legality-of-an-irs-money-seizure/702721/45 "2014-10-28T16:53:16Z")
> [@UDS](#): > > It’s legal because what the woman was doing is against the law. 31 USC s. 5324 makes it unlawful to structure your transactions so as to evade bank reporting requirements. The policy reasons underpinning such a law are obvious. In this case on the taxpayer’s own evidence her purpose was to evade the reporting requirements, so it seems like an open-and-shut case. > > The controversial bit is that the money has been seized before the taxpayer has been charged with that offence, much less convicted. They’re entitled to do that under 31 USC s. 5317(c)(2). The thinking, I suspect, is that the offence is likely to be committed as part of a larger pattern of money-laundering, and that if they wait to get to the bottom of things, the money will be well and truly laundered. I agree that the law makes these deposits illegal. But as you noted, the controversial part is that the IRS is able to presume guilt and go immediately to confiscation. This is like the police having the power to arrest you for a felony and then drop you off at prison to begin your sentence - there needs to be a hearing at some point. The IRS procedure seems to be a Fifth Amendment violation. ---
**Author:** ![Saint\_Cad](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/saint_cad/32/18907_2.png) [@Saint\_Cad](https://boards.straightdope.com/u/Saint_Cad)\ **Post date:** [October 28, 2014, 4:58pm UTC](https://boards.straightdope.com/t/please-explain-the-legality-of-an-irs-money-seizure/702721/46 "2014-10-28T16:58:39Z")
There should be a way for a person in pro per to file a motion for just the filing fee requiring the agency to justify their seizure. So Cobb County Sheriff Bigbossman has to come to court, explain why a) money is reasonably suspected of being involved of a crime, b) present evidence available at time of seizure and c) explain why with the same evidence the person was never charged. ---
**Author:** ![Steve\_MB](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/steve_mb/32/5339_2.png) [@Steve\_MB](https://boards.straightdope.com/u/Steve_MB)\ **Post date:** [October 28, 2014, 5:06pm UTC](https://boards.straightdope.com/t/please-explain-the-legality-of-an-irs-money-seizure/702721/47 "2014-10-28T17:06:17Z")
> [@DrDeth](#): > > Where does any “small, cash-only restaurant” get that much cash in a short period? I’ve seen small restaurants with lines to get in halfway down the block. I’d guesstimate that under those circumstances the daily take could easily be above $10K. ---
**Author:** ![Grumman](https://avatars.discourse-cdn.com/v4/letter/g/43a26b/32.png) [@Grumman](https://boards.straightdope.com/u/Grumman)\ **Post date:** [October 28, 2014, 5:08pm UTC](https://boards.straightdope.com/t/please-explain-the-legality-of-an-irs-money-seizure/702721/48 "2014-10-28T17:08:29Z")
> [@DrDeth](#): > > 1. She deliberately structured her deposits to avoid reporting laws. That’s illegal. She was going out of her way to be compliant with reporting laws. Having a second “Gotcha!” law that makes it illegal to act in compliance with the law if you’re doing it deliberately is obscene. If the suspicious nature of the deposits meant they were investigated despite being under the mandatory reporting threshold, that would be a reasonable response. _This_ is not. ---
**Author:** ![Really\_Not\_All\_That\_Bright](https://avatars.discourse-cdn.com/v4/letter/r/e8c25b/32.png) [@Really\_Not\_All\_That\_Bright](https://boards.straightdope.com/u/Really_Not_All_That_Bright)\ **Post date:** [October 28, 2014, 5:09pm UTC](https://boards.straightdope.com/t/please-explain-the-legality-of-an-irs-money-seizure/702721/49 "2014-10-28T17:09:34Z")
> [@Saint\_Cad](#): > > There should be a way for a person in pro per to file a motion for just the filing fee requiring the agency to justify their seizure. So Cobb County Sheriff Bigbossman has to come to court, explain why a) money is reasonably suspected of being involved of a crime, b) present evidence available at time of seizure and c) explain why with the same evidence the person was never charged. These are not civil forfeitures we’re talking about. ---
**Author:** ![DrDeth](https://avatars.discourse-cdn.com/v4/letter/d/b487fb/32.png) [@DrDeth](https://boards.straightdope.com/u/DrDeth)\ **Post date:** [October 28, 2014, 5:13pm UTC](https://boards.straightdope.com/t/please-explain-the-legality-of-an-irs-money-seizure/702721/50 "2014-10-28T17:13:16Z")
> [@Grumman](#): > > She was going out of her way to be compliant with reporting laws. Having a second “Gotcha!” law that makes it illegal to act in compliance with the law if you’re doing it deliberately is obscene. > > . In fact she was going out of her way to NOT comply. ---
**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\ **Post date:** [October 28, 2014, 5:13pm UTC](https://boards.straightdope.com/t/please-explain-the-legality-of-an-irs-money-seizure/702721/51 "2014-10-28T17:13:38Z")
> [@DrDeth](#): > > That was\* their \*term. > Where does any “small, cash-only restaurant” get that much cash in a short period? That was one of my thoughts. My wife managed a medium-sized McDonalds and proceeds exceeded $10,000 on the good days - busy weekends. Of course, here in Canada, more than half was debit and credit, so maybe $3,000 cash plus or minus. However, the article said that at one point to keep going they were up to $300,000 in hock to some suppliers once they were reduced to cash-only, so this is no “small restaurant”. Yes, structuring the payments to avoid the $10,000 limit was structuring and so in and of itself illegal. It seems that the IRS has decided not to prosecute since they have the discretion to charge or not, and seizing the money - effectively a back-door extra-judicial “fine” - is adequate for their purposes. Should you be surprised that the enforcers abuse the law? A few months after the Patriot Act was passed, authorities in the Justice Department were apparently giving seminars on how to take the powers intended to surveil or search or detain terrorists, and apply these to every petty criminal that popped up on local enforcement’s radar. Until the congress and senate are replaced by smart, reasonable politicians (sorry) not beholden to interests or susceptible to lobbying by special interests, the steady erosion of liberty will remain a fact of life. ---
**Author:** ![Grumman](https://avatars.discourse-cdn.com/v4/letter/g/43a26b/32.png) [@Grumman](https://boards.straightdope.com/u/Grumman)\ **Post date:** [October 28, 2014, 5:52pm UTC](https://boards.straightdope.com/t/please-explain-the-legality-of-an-irs-money-seizure/702721/52 "2014-10-28T17:52:54Z")
> [@DrDeth](#): > > In fact she was going out of her way to NOT comply. A sober driver and a drunk pedestrian are both acting in compliance with drunk driving laws. ---
**Author:** ![Xema](https://avatars.discourse-cdn.com/v4/letter/x/9de053/32.png) [@Xema](https://boards.straightdope.com/u/Xema)\ **Post date:** [October 28, 2014, 6:09pm UTC](https://boards.straightdope.com/t/please-explain-the-legality-of-an-irs-money-seizure/702721/53 "2014-10-28T18:09:42Z")
> [@DrDeth](#): > > In fact she was going out of her way to NOT comply. As presented in the article, she believed that she was reducing the burden on her bank (and herself) by keeping the deposits under $10K, and that it was okay to do so. She did not know this was contrary to any law, and so it cannot validly be said that she was trying not to comply. ---
**Author:** ![TriPolar](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tripolar/32/3008_2.png) [@TriPolar](https://boards.straightdope.com/u/TriPolar)\ **Post date:** [October 28, 2014, 6:29pm UTC](https://boards.straightdope.com/t/please-explain-the-legality-of-an-irs-money-seizure/702721/54 "2014-10-28T18:29:42Z")
> [@Xema](#): > > As presented in the article, she believed that she was reducing the burden on her bank (and herself) by keeping the deposits under $10K, and that it was okay to do so. She did not know this was contrary to any law, and so it cannot validly be said that she was trying not to comply. I think they went to civil forfeiture to avoid questions of intent. Clearly she did not intend to violate any laws. ---
**Author:** ![Xema](https://avatars.discourse-cdn.com/v4/letter/x/9de053/32.png) [@Xema](https://boards.straightdope.com/u/Xema)\ **Post date:** [October 28, 2014, 6:46pm UTC](https://boards.straightdope.com/t/please-explain-the-legality-of-an-irs-money-seizure/702721/55 "2014-10-28T18:46:58Z")
> [@TriPolar](#): > > I think they went to civil forfeiture to avoid questions of intent. Or any other troublesome questions. When the choices are “Let’s see if we can prove she did something wrong” and “Let’s simply seize her money and walk away”, it’s easy to predict how things end up. It should be noted that if rules of due process were applicable, in order to seize the money the IRS would have to prove not simply that the deposits were structured, but that the money was illegally obtained. As it is, they get to treat a restaurant owner unaware of reporting requirements just as they would someone financing terrorism. ---
**Author:** ![txtumbleweed](https://avatars.discourse-cdn.com/v4/letter/t/278dde/32.png) [@txtumbleweed](https://boards.straightdope.com/u/txtumbleweed)\ **Post date:** [October 28, 2014, 7:07pm UTC](https://boards.straightdope.com/t/please-explain-the-legality-of-an-irs-money-seizure/702721/56 "2014-10-28T19:07:14Z")
> [@Amateur\_Barbarian](#): > > Missed edit - To answer the OP, it’s legal because the IRS has been granted powers the other three-letter agencies can only have wet dreams about. The other three letter agencies are in on it, too. If a law enforcement officer likes your car and can come up with a probable cause, he can seize your car and his department can sell it and keep the proceeds regardless of whether you’ve actually been charged, much less have committed, a crime. Cops and DA’s work together to quite literally commit highway robbery: > **[Punishment Without Crime](https://www.newyorker.com/magazine/2013/08/12/taken?currentPage=all)** > > Under civil forfeiture, Americans who haven’t been charged with wrongdoing can be stripped of their cash, cars, and even homes. [http://www.texasmonthly.com/story/silverado-fought-law-and-law-won](http://www.texasmonthly.com/story/silverado-fought-law-and-law-won) ---
**Author:** ![Telemark](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/telemark/32/372_2.png) [@Telemark](https://boards.straightdope.com/u/Telemark)\ **Post date:** [October 28, 2014, 7:26pm UTC](https://boards.straightdope.com/t/please-explain-the-legality-of-an-irs-money-seizure/702721/57 "2014-10-28T19:26:26Z")
> [@Grumman](#): > > A sober driver and a drunk pedestrian are both acting in compliance with drunk driving laws. She changed the amount she was depositing for the sole purpose of avoiding the reporting rule. Her motivation behind that could be innocent or not so innocent, but her actions were not in compliance with the law that says you can’t structure your deposits to avoid reporting. She appears to be violating the letter and spirit of the law. Or, in other words, what in the world does your quote mean? ---
**Author:** ![dstarfire](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/dstarfire/32/5762_2.png) [@dstarfire](https://boards.straightdope.com/u/dstarfire)\ **Post date:** [October 28, 2014, 7:39pm UTC](https://boards.straightdope.com/t/please-explain-the-legality-of-an-irs-money-seizure/702721/58 "2014-10-28T19:39:14Z")
One reason the IRS has seemingly ridiculous powers to seize funds/property is the ease of hiding and/or relocating money. One of the simplest (and oldest) ways is simply by giving\* assets to friends or acquaintances. Look at how well the mob was able to hide their financial activities for so long. Normally, we (as a society) want money movement to be easy and unhindered, to facilitate commerce. However, since law enforcement agencies realized that tracking money is a great way of solving crimes and finding the perpetrators, a lot of laws have been passed to make this tracking easier and prevent people from avoiding it. \*or selling at a massive discount (e.g. selling a successful restaurant for $100) ---
**Author:** ![md2000](https://avatars.discourse-cdn.com/v4/letter/m/73ab20/32.png) [@md2000](https://boards.straightdope.com/u/md2000)\ **Post date:** [October 29, 2014, 5:03am UTC](https://boards.straightdope.com/t/please-explain-the-legality-of-an-irs-money-seizure/702721/59 "2014-10-29T05:03:09Z")
> [@Telemark](#): > > She changed the amount she was depositing for the sole purpose of avoiding the reporting rule. Her motivation behind that could be innocent or not so innocent, but her actions were not in compliance with the law that says you can’t structure your deposits to avoid reporting. She appears to be violating the letter and spirit of the law. > > Or, in other words, what in the world does your quote mean? “She changed the amount she was depositing for the sole purpose of avoiding the reporting rule.” That is essentially a felony in and of itself; 5 years, or 10 if the total in a year exceeds $100,000 if I recall. The reason for structuring and source of funds are irrelevant. It’s still a crime. The fact the bank staff had mistakenly told her it was better to do so does not matter, she broke the law. The problem is twofold - (1) too many damn stupid and esoteric laws and (2) As I understand, the seizure is a civil suit the USA vs. $330,000 not the USA vs. Hinders. Therefore, the Hinders cannot demand a civil jury trial (which, one presumes, the IRS definitely wants to avoid) because the lawsuit does not involve them, it involves the money… Which makes it a slam dunk for the IRS. They think they are being generous offering pennies on the dollar to settle. They know damn well how a jury would rule given the chance. ---
**Author:** ![grude](https://avatars.discourse-cdn.com/v4/letter/g/e47774/32.png) [@grude](https://boards.straightdope.com/u/grude)\ **Post date:** [October 29, 2014, 5:32am UTC](https://boards.straightdope.com/t/please-explain-the-legality-of-an-irs-money-seizure/702721/60 "2014-10-29T05:32:26Z")
What stops the authorities from claiming ANY deposit or withdrawal is an attempt to avoid reporting requirements and therefore illegal? What I mean is I deposit $4,000 on the 1st, and then $5,000 on the 15th, and then $1,000 on the 20th. They claim this is obviously an attempt to break up a reportable amount into smaller amounts, boom seized. Or hell I deposit $200 dollars for the month, obviously trying to avoid reporting and I am hiding the rest at home. If the only criteria for having your money seized is depositing less then ten grand, well basically anyone can be nabbed. I am now realizing the genius of the law. [Previous page](https://boards.straightdope.com/t/please-explain-the-legality-of-an-irs-money-seizure/702721.md?page=2) [Next page](https://boards.straightdope.com/t/please-explain-the-legality-of-an-irs-money-seizure/702721.md?page=4)