
Inspector General criticizes the IRS for seizing money from innocent people - jackgavigan
https://www.washingtonpost.com/news/wonk/wp/2017/04/05/the-irs-took-millions-from-innocent-people-because-of-how-they-managed-their-bank-accounts-inspector-general-finds/
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cbanek
So now you can take my money if I keep it in cash and travel with it, or if I
deposit it to a bank in under $10k increments, and if it's more than that,
that's also suspicious. I guess just having money is suspicious these days...
we're all supposed to spend it on fancy phones.

Overall, it just feels like the IRS felt jealous of the civil forfeitures.

~~~
mc32
Those things are not illegal per-se but can be signals of things resulting
from illegal transactions. So, they are more a heuristic --but not following
procedure because it can be used to evade detection is made illegal.

The one thing I don't understand is why some of those figures rarely keep up
with inflation. I think they should. 10,000 isn't what it used to be.

~~~
nhebb
From the article:

> The IG took a random sample of 278 IRS forfeiture actions in cases where
> structuring was the primary basis for seizure. The report found that in 91
> percent of those cases, the individuals and business had obtained their
> money legally.

That's not a very good signal. Even if the numbers were reversed and 91% had
obtained their money illegally, I'd say that a 9% false seizure rate would
still be way too high.

~~~
mc32
I agree it's a rough tool and one they likely could replace with better tools
in this day and age. And one hopes they would.

~~~
HashThis
It isn't okay to use a rough tool to steal. The IRS is stealing from people.
They need proof people have this money illegally or they are an outright
criminal who is stealing.

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tomohawk
The previous president appointed Loretta Lynch as AG, who made a name for
herself with civil asset forfeiture.

[http://www.rawstory.com/2015/01/loretta-lynch-civil-
forfeitu...](http://www.rawstory.com/2015/01/loretta-lynch-civil-forfeiture-
hirsch/)

If he didn't want this sort of nonsense to be a front and center policy of the
DOJ, then he would have appointed someone else.

What about Jeff Sessions? Policy wise, he's also a supporter of this policy,
although he doesn't have the proven track record of using it as a tool like
Lynch did. Maybe there's a small ray of hope there, but I doubt it.

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addled
I work on software banks use to look for fraud or money laundering. Fraud
always made sense, since there was a feedback loop with the end customer to
confirm transactions were legit or not. We could adjust our algorithms from
there.

I don't think the same exists for BSA. The main incentive for banks is to
avoid fines for not reporting suspicious activity and the Fed doesn't let the
bank (or us) know whether the suspicious activity submitted turned out to be
legal or not. I would love to reduce the number of false positives from our
system, but have no way to build a proper training set. Sounds like the IRS
doesn't know what it should really be targeting either.

~~~
arafa
There is sort of a feedback loop based on the reports you do file, whether the
Fed ends up accepting or complaining about them, and also (sadly) news
reports. It works OK.

Monitoring structuring mostly works fine at larger banks. The problem here is
that the IRS doesn't have the same network of analysts and other quality
control measures. At a bank, someone can take their money elsewhere and be
held liable. The IRS has a smaller budget and much less incentives (very hard
to switch governments) and so there's a failure.

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efoto
TL;DR Do not try this at home: "The IRS’s own internal watchdog found that the
IRS had a practice of seizing entire bank accounts based on nothing more than
a pattern of under-$10,000 cash deposits."

~~~
lutorm
I would think the vast majority of cash deposits are under $10k, so I assume
what they mean is repeated deposits of _close to, but slightly under_ , $10k.

~~~
freditup
Also called "structuring" \- intentionally making small transactions to avoid
the oversight that comes with large ones [0].

[0]:
[https://en.wikipedia.org/wiki/Structuring](https://en.wikipedia.org/wiki/Structuring)

~~~
timv
And the law in question specifically says

 _No person shall, for the purpose of evading the reporting requirements of
section 5313 ..._

But the report indicates that the IRS made no attempts to determine whether
the supposed "structuring" was done _for the purpose of evading the reporting
requirements_ , and simply ignored any evidence the showed that the pattern of
deposits had a legitimate explanation.

~~~
wav-part
Is "for the purpose" predefined ? If not, we have only ourselves to blame for
including such subjective terms in such serious matters.

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matt4077
There's this recent story which makes it seem likely the practices of asset
forfeiture won't stay as they are for too much longer:
[https://www.theatlantic.com/politics/archive/2017/04/clarenc...](https://www.theatlantic.com/politics/archive/2017/04/clarence-
thomas-civil-forfeiture/521583/)

~~~
Shivetya
One can hope. Still, it just amazes me how the police forces of this country
can just take actions known to cause even more public distrust and continue
them when they know they are in the wrong morally if not legally.

~~~
mistermann
It amazes me that otherwise intelligent people can observe this and still
believe we live in a genuine democracy.

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hirundo
Stories like this make it hard to maintain the illusion that government
employees are public servants, except in the sense that cowboys are servants
to cattle.

~~~
programmarchy
Fool me once, shame on you. Fool me a thousand times, well, what choice do I
really have anyway?

~~~
dmichulke
I know it's so 90s to bash neither the current nor the last POTUS but I can't
resist

 _Fool me once, shame on - shame on you. Fool me - you can 't get fooled
again._ \- G.W.Bush

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Isamu
91% of 278 randomly-sampled cases were wrongfully seized. Jesus.

> More troubling, the report found that the pattern of seizures — targeting
> businesses that had obtained their money legally — was deliberate.

That part is not surprising to me, given how many cases were wrongful, that it
was deliberate. There is no oversight, except for occasional investigations
like this one.

This will not result in rolling back this power, though. They'll just put
"stronger oversight" in place, to make sure the wolves guarding the hen house
are on their best behavior.

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phkahler
The problem isn't their policy, the problem is the law that allows this. These
asset grabs are clearly unconstitutional violations of the 4th amendment -
that doesn't change just because of a law. They're taking assets without a
warrant or even probably cause. If you want to take the drug money after
you've proven and convicted someone of a drug offense then maybe (that's a
different debate). But this is simply authorized theft. The justification
really isn't there (excuses are there).

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CommieBobDole
What gets me is the audacity of making a suspicious activity that may be an
indication of a crime, the crime itself. It's as if they outlawed having a
suspiciously high power bill, or looking over your shoulder a lot while you
browse items in a store.

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caf
It seems to me that data processing capacity must have increased to the point
where they could just reduce the reporting level to zero (ie every transaction
is reported) and so remove the entire need for rules against "structuring".

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nickpeterson
I wonder if you would just be better off refusing these kinds of actions as a
private citizen. I'm pretty sure you could make enough noise about it that it
wouldn't be worth their while. Same with those videos of police officers
trying to cease cash from people after pulling them over. I would just refuse
to give it to them. Are they going to shoot me for money on the side of the
road?

~~~
sigstoat
> Are they going to shoot me for money on the side of the road?

you're simply not given an opportunity to "refuse". it's usually going to go
something like:

1) "mr doe, step out of the car." refuse? you're getting tased and definitely
going to jail for refusing a lawful order.

2) "mr doe, i'm going to search your car now." well you're out of your car.
you can (and should) say "no", but your car is getting searched regardless.
maybe you jump the cop? or shoot at them? now you're definitely going to jail
for assaulting the cop, if you even survive the night.

3) they find cash. they bundle it up, pull it out and probably just go stuff
it in their car. if they're smart they're not even going to tell you what
they're moving until it's locked up in their trunk. if you figure it out and
say "hey you can't take that blah blah", they're going to ignore you. so
you're back to assaulting them somehow. you're definitely going to jail.

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maxxxxx
I can see how these transactions can trigger an alert but why don't they give
people a chance to clarify the situation first before taking action? This
seems extremely unproductive and a big burden for someone who can't afford a
lawyer easily.

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pascalxus
I think we're all guilty of this one - that is anyone with a job that pays
less than 10K per pay-check.

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known
IRS algorithm is screwed :)

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draw_down
You should see what law enforcement does.

