IGX

For almost 40 years, Carole Hinders has dished out Mexican specialties at her modest cash-only restaurant. For just as long, she deposited the earnings at a small bank branch a block away — until last year, when two tax agents knocked on her door and informed her that they had seized her checking account, almost $33,000.

The Internal Revenue Service agents did not accuse Ms. Hinders of money laundering or cheating on her taxes — in fact, she has not been charged with any crime. Instead, the money was seized solely because she had deposited less than $10,000 at a time, which they viewed as an attempt to avoid triggering a required government report.

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.

The median amount seized by the I.R.S. was $34,000, according to the Institute for Justice analysis, while legal costs can easily mount to $20,000 or more.

There are often legitimate business reasons for keeping deposits below $10,000, said Larry Salzman, a lawyer with the Institute for Justice who is representing Ms. Hinders and the Long Island family pro bono. For example, he said, a grocery store owner in Fraser, Mich., had an insurance policy that covered only up to $10,000 cash. When he neared the limit, he would make a deposit.

Law enforcement agencies get to keep a share of whatever is forfeited.

Banks are not permitted to advise customers that their deposit habits may be illegal or educate them about structuring unless they ask, in which case they are given a federal pamphlet, Ms. Van Steenwyk said. “We’re not allowed to tell them anything,” she said.

terra wrote:Wow, I thought the ATO was bad...

Link?

Shafpocalypse Now wrote:No shit. It's completely appalling that when they do discover their error, they just keep the property anyway.

Turdacious wrote:

Shafpocalypse Now wrote:No shit. It's completely appalling that when they do discover their error, they just keep the property anyway.

The important thing is that it hurts small businesses, because the last thing we need is for small businesses to do bad things like creating jobs.

Hilary Clinton wrote:Speaking at a campaign event Friday for struggling Massachusetts gubernatorial candidate Martha Coakley, Clinton offered this argument against “trickle down” economics – which focuses on cutting taxes and regulations so businesses can grow:

“Don’t let anybody tell you that it’s corporations and businesses that create jobs. You know that old theory, trickle-down economics. That has been tried, that has failed. It has failed rather spectacularly.