Cash Deposits Seized By Irs

[Chantay]

This story in the news doesn't give a lot of details, maybe there are not any, but it sounds pretty scary.

 

 

 

http://www.theblaze.com/stories/2014/10/29/the-irs-closed-this-grandmothers-bank-account-and-seized-nearly-33000-from-her-but-wait-until-you-hear-her-crime/

[Stephen]

I saw that too, there must be a lot more to it than the lady is letting on. If the IRS was simply running around grabbing business receipts form retail businesses it would be really big news. My guess is that they at lest think she is laundering money. But you're right the article is a chilling reminder of just how much power the IRS and the government in general has.  

[DirtRoads]

You would think there is something more going on .... but maybe not.

 

 

http://www.redflagnews.com/headlines/irs-targets-private-bank-accounts-seizes-funds-of-innocent-americans-without-charge-or-trial

 

I've heard of structuring before but that used to apply mostly to people doing repeated transactions of 9k to 9.9k.  There was some change in a law that has made this possible.     Interesting the IRS does not have to show any reason or do an audit.     And you have to fight to get your money back.  I noticed both seizures were in the 30k range.   And were business accounts.   Wonder if they were LLC's or sole proprietorships/partnerships.  From what we read, these businesses were not even being audited.

 

I'll definitely keep my business account below 20K from now on.    This really doesn't make any sense to me because considering this amount of money if someone was trying to "hide" they would logically just not deposit.   Not like this is sustantial amount.    But I have zero faith in our government now days.     Seizing bank accounts/property after an audit or failure to pay after collections is common practice, but random assessments based on "structuring", especially for amounts in the 30K range seem out of order.   Seriously ... what drug dealer would be dealing in such a small amount as 30k .......

[Roberta12]

Geez Louise!  All my deposits to my business account are small.  I am a small business.  Should one put their money in a sock? 

hmm

[GEP]

So based on the lack of details in both of the articles, and their alarmist-sounding tone, I ran them past my accountant asking if this was even possible. Turns out the IRS and Treasury Department DO have the authority to seize your bank account if your banking activity contains certain suspicious patterns. He also said that legitimate small businesses have nothing to worry about. These laws exist to combat the drug trade.

 

Specifically, the behavior is called "structuring" which means you routinely make bank deposits that are slightly less than $10,000. When you make deposits of $10,000 or more, banks are required to report that to the Treasury Dept. So making routine deposits of just under $10,000 looks like you are trying to avoid IRS detection.

 

Does your pottery business behave like this? If not, then don't worry about this.

 

Is it possible for legitimate small businesses to behave like this by accident? Of course, and it's too bad if this happened to innocent people. This is another reason why it pays to have a good accountant. Hypothetically, if I landed a huge wholesale account that involved a $9,800 order every quarter, I'm confident my accountant would notice it and say "let me explain structuring to you, and why you should renegotiate this order."

[Mark C.]

I have known about the 10,000 rule since the 90s. Its always reported for over 10,000 cash deposits by banks to the IRS.

I actually had to deal with this once in the early 2000,s when buying a boat.I paid with way over 10k in cash at a bank.

My account and I dealt with the fallout that year-its a whole other story but none of this is news really. If your straight up in business this will not effect you.

Mark

[DirtRoads]

http://rt.com/usa/199883-irs-structuring-civil-asset-forfeiture/

 

and "The IRS announced in a written statement Thursday that it will “no longer pursue the seizure and forfeiture of funds associated solely with ‘legal source’ structuring cases unless there are exceptional circumstances justifying the seizure and forfeiture and the case has been approved at the director of field operations (D.F.O.) level.â€"   So apparently they were under pressure and this will stop happening .......

 

Reading this I can see where number of cases went from 114 in 2005 to over 600 last year.  And 80% were innocent.  But then it is CASH deposits.   You definitely would not want to horde up cash and make deposits 9k to 9.9k.  Yes these innocent people lost money.