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Despite Policy Change, IRS Continues Civil Asset Seizures.

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Surprise, surprise! Even though last year the IRS announced, under pressure from Congress, that it would stop pursuing American businesses that have had no ties to drug dealing, money laundering or other illegal activities in their Civil Asset Seizure program, it seems nothing has really changed. Recently the IRS turned the life of a small business owner in North Carolina upside down and inside out by seizing $107,000 from his bank account.

I’ve written about the practice of Civil Asset Seizures in the past, but for those of you who may not know, it is a law that gives the government authority to seize money from regular folks, either individuals or businesses simply based on the pattern of cash deposits under $10,000.

In the particular case in North Carolina, the businessman was advised by a bank teller to keep his deposits just under $10,000. This is exactly the type of behavior that arouses suspicion of illicit activity. Fortunately for the businessman, the Institute for Justice got wind of the case and took it on a pro-bono basis. Not surprisingly, within days of this news, the IRS and Justice Department announced they were dropping the case and returning the $107,000. They were not however, inclined to return the tens of thousands of dollars the man had to pay to prove his innocence. According to the attorney handling the case, and rightly so, the Institute for Justice is going to do everything they can to make things right for their client.

As the attorney stated, “The government cannot turn my client’s life upside down and then walk away as if nothing happened. He should not have to pay for the government’s lapse in judgment.” And more importantly, why should the government be allowed to profit from its misbehavior by keeping the interest that it earned while holding an innocent citizen’s money. (

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