By Cole Lauterbach/Illinois Radio Network
Federal lawmakers have renewed a push to rein in the IRS’ ability to seize assets, saying the tax collection agency makes victims out of law-abiding small business owners.
According to the Institute for Justice, the IRS seized $43 million in property in seven years. All of that was seized based on patterns of bank deposits or withdrawals and not criminal behavior.
U.S. Rep. Peter Roskam, R-Wheaton, wants to pass into law a provision banning the IRS from freezing anyone’s assets purely based off of a pattern of bank activity. Instead, the department would need a warrant showing the activity is connected to crimes. While structuring payments to avoid federal reporting laws is illegal, Roskam says the IRS has been wrongfully victimizing small businesses for years by freezing assets before getting the whole story.
“The Internal Revenue Service was coming to a conclusion that ‘structuring’ was happening even when it wasn’t, and it led to a very bad end,” he said. “With no notice, no phone call, no discussion, they just put the hammer down and create an incredible hardship.”
Following public pressure, the IRS now has seizure rules similar to the legislation, but Roskam says it’s important to have this written into law.
“If there’s a change in administration, if there’s a change in disposition, if there’s a change in attitude, then all of a sudden they could go right back to it,” he said.
This method of asset seizure was the mechanism used to freeze the assets of former House Speaker Dennis Hastert. Roskam says his bill would not have stopped the IRS from taking control of those funds because they were tied to his sexual abuse of an underage boy.
The bill is named after a dairy farmer whose assets were frozen after he made cash deposits from money raised at farmers markets. A similar bill died in the Senate last year before session ended.
