In college, I was vice president of the Auburn University Libertarians. I was an extreme libertarian. I was an anarcho-capitalist, and as a result I thought the only truly just society would be one without a government and with free markets and free people.
I’ve left the extremism over the years. I’m not an anarcho-capitalist; I’m not even certain I’m a libertarian. My political views are very much in flux right now.
But I am still close enough to libertarianism and traditional conservatism to distrust the government. I want the government on a short leash, and I still view it as one of the biggest––if not the biggest––threats to freedom.
So when I read an article on MSN.com about a law that lets the IRS seize assets on the mere suspicion of criminal activity, I got concerned.
The banks have to report deposits of $10,000 and more to the government. Criminals know this, so they often structure their deposits so that they are only depositing less than $10,000 in each deposit. They do not want their deposits reported and bring any unwanted attention to their activities.
The government has outlawed structuring deposits to avoid the bank reporting deposits of $10,000 or more. If a string of deposits under $10,000 are deemed suspicious by the IRS, then they can seize your money without having to prove that you were doing anything criminal.
The article says:
“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.
‘How can this happen?’ Ms. Hinders said in a recent interview. ‘Who takes your money before they prove that you’ve done anything wrong with it?’
The federal government does.”
Unlike a criminal charge where you are innocent until proven guilty, the government can seize your assets and put the burden on you to prove you weren’t illegally structuring your deposits for sinister purposes.
“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 and settle the case for a portion of their money.”
And the following fact just makes this even more suspicious:
“Law enforcement agencies get to keep a share of whatever is forfeited.”
I understand that the government has used rules like this to detect criminal activity and, in addition, to make criminal activity to occur. I’m not opposed to the government getting reports about large deposits. But why do they need the right to seize the money without proving their case? Why is the burden on the individual to prove their innocence?
Would it slow down and hamper criminal investigations and prosecutions? It might slow them down, but I cannot see how much. After all, the IRS still has to refer the cases to the U.S. Justice Department for a criminal investigation. I don’t see how requiring the IRS to have more than just a suspicion would slow down any criminal investigation.
If the IRS had a heavier burden of proof than mere suspicion, it would probably reduce the number of innocent people who have had their assets unjustly seized. As the article says, there are good reasons for people to keeping their deposits under $10,000:
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, some grocery store owners in Fraser, Mich., had an insurance policy that covered only up to $10,000 cash. When they neared the limit, they would make a deposit.
Thankfully, the article reported that the IRS was going to limit these seizures in the future.
Join other dedicated readers of Thinking and Believing and subscribe to the email list. You'll receive every new post in your inbox, so you never have to worry about missing a post. Click here to subscribe.