The House Ways and Means Committee approved legislation on Thursday that U.S. Rep. Peter Roskam (R-IL) introduced to protect small business owners who obey the law from unjust asset forfeiture by the IRS.
Roskam introduced the Clyde-Hirsch-Sowers RESPECT Act after convening a subcommittee hearing in 2016 on the IRS and Department of Justice (DoJ) seizing the assets of citizens based on allegations of “structuring” cash deposits. Structuring is a criminal offense involving the execution of cash transactions in a specific way so as to avoid banking regulations, such as in money laundering and tax evasion.
The bill is named for Andrew Clyde, Jeffrey, Richard and Mitch Hirsch, and Randy Sowers, all small business owners whose assets were seized on allegations that they structured cash deposits to shirk record and reporting requirements of the Bank Secrecy Act (BSA).
“… We took another step forward in our fight to end abusive civil asset forfeiture practices,” Roskam, the chairman of the Subcommittee on Tax Policy, said. “It’s clear to everyone involved that the IRS and DoJ abused their authority and took money from people who did nothing wrong. This bill will end that practice once and for all.”
Under the RESPECT Act, or specifically, the Clyde-Hirsch-Sowers Restraining Excessive Seizure of Property through the Exploitation of Civil Asset Forfeiture Tools Act, H.R. 1843, the IRS would only be able to seize assets if it can prove that the property was generated by an illegal source, and that transactions were structured to conceal a criminal violation under the BSA.
Under pressure from Congress, the IRS sent letters to people from whom it had improperly seized assets based on allegations of structuring cash deposits, and the individuals can get some or all of their money back, Roskam said.
“Furthermore I am pleased with the progress that we have made with the Internal Revenue Service, and I look forward to the Department of Justice following suit and returning funds seized from innocent Americans using a law intended to target drug traffickers, terrorists and criminal enterprises,” Roskam said.