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Beware: If You Make a Series of Deposits Totaling $10K, The IRS Could Seize Your Accounts

Law abiding, small business owners and ordinary citizens must be increasingly cautious to avoid getting into trouble with the IRS. For the last few years, the IRS has been implementing a process referred to as “civil asset forfeiture” to seize bank accounts and other assets. Originally created as a way to track the cash of criminals such as drug traffickers and terrorists, the IRS has turned their sights to average business owners even though they have no criminal records, nor have they committed any serious crimes.

Once the IRS seizes an account, they can take the money without filing a criminal complaint. It is the responsibility of the business owner or individual whose assets have been taken to prove that they are innocent.

This is no joke. What the IRS looks for are a series of deposits made to an account under $10,000. This practice is referred to as “structuring” or “smurfing” and is often done in an attempt to evade reporting requirements.

Innocent business owners across the country have been targeted. And, even if the person proves their innocence, the IRS never returns the funds.

Under 31 USC 5324, if a person’s “transaction could have been conducted as a single transaction and that person took actions to break it up to avoid a currency transaction report,” he is considered to be in violation of the law.  According to the Bank Secrecy Act of 1970, “Any persons who receive more than $10,000 in one transaction or a series of related transactions, while conducting their trade or business, must file a Form 8300.”

You may not have broken the law, but if for any reason you decide to make a number of small deposits that total $10,000, you could be targeted by the IRS as a lawbreaker and your assets could be subject to seizure.

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