The I.R.S. Can Seize Accounts Simply On Suspicion, No Criminal Charges Required


An Iowa business owner had all her bank accounts seized last year by the I.R.S. on suspicion she was attaining the money through illegal means.

By Zach McAuliffe @ Ben Swann

Carole Hinders owns a small, cash-only restaurant in Arnolds Park, Iowa, and all earnings from her restaurant were deposited in a single account. Her account totaled about $33,000, but two I.R.S. agents informed her all of the money from her business had been seized by the organization under a suspicion. These suspicions arose because she deposited just less than $10,000 at a time into the account.

This seizure isn’t illegal though and the I.R.S. acted under the protection of law. According tot he law, any bank deposit larger than $10,000 must be reported to the I.R.S. However, if transactions are just below the $10,000 mark, the transactions are still viewed as suspicious.

The law in question, according to the New York Times, “was designed to catch drug traffickers, racketeers and terrorists by tracking their cash.” Former federal prosecutor David Smith however, said the law affects “middle-class citizens who have never had any trouble with the law.”

Hinders was never charged with any criminal offense in relation to the seizure of her accounts.

This is not the first time this has happened either.

According to Institute for Justice, the IRS made about 640 account seizures in 2012 under the coverage of this law. Of those, only about 120 were prosecuted under criminal charges.

When contacted by the New York Times, the IRS said they would no longer perform this practice an would focus their efforts on cases where the money is believed to have been acquired illegally.

The chief of Criminal Investigation at the I.R.S. released a statement which said the policy would be updated to reflect the refocusing of the agencies efforts, but deposits just under $10,000 would still call for an investigation and possible seizure.

This article originally appeared at Ben Swann