The U.S. Senate has voted to curtail the nearly unchecked ability of the Internal Revenue Service to confiscate cash from someone, make a few allegations but never file any charges and then keep the money.
Called forfeiture, it’s been in the news lately in several egregious cases. The U.S. Supreme Court warned in an Ohio confiscation case earlier this year that states must follow the Constitution’s ban on excessive fines in such situations.
It is the Institute for Justice that is talking about the Senate’s approval of a bill adopted by the House that is being sent to President Trump for his signature.
“The IRS used civil forfeiture to take hard-earned money from innocent small-business owners,” said Institute for Justice Senior Attorney Darpana Sheth, who heads IJ’s National Initiative to End Forfeiture Abuse. “With Congress so bitterly polarized, it’s encouraging to see hundreds of representatives stand together against this inherently abusive practice.”
The Clyde-Hirsch-Sowers RESPECT Act would restrict forfeiture for currency “structuring” only when the funds in question are derived from an illegal source or used to conceal illegal activity.
It also would let property owners challenge a seizure at a prompt, post-seizure hearing. Previously, property owners targeted for structuring had to wait months or even years to present their case to a judge, IJ said.
The bill is named partly for Institute for Justice clients Jeff Hirsch and Randy Sowers, two victims of the IRS’s aggressive seizures for so-called “structuring.” Through structuring laws, the IRS has routinely confiscated cash from ordinary Americans because they frequently deposited or withdrew cash in amounts under $10,000. And by using civil forfeiture, the IRS can keep the money without ever filing criminal charges, IJ noted.
The RESPECT Act was originally introduced by Reps. John Lewis, D-Ga., and Doug Collins, R-Ga., after Hirsch and Sowers told the House Ways and Means Oversight Subcommittee about their experiences.
“Jeff had over $400,000 seized from his convenience store distribution business on Long Island while Randy, a Maryland dairy farmer, lost $29,500 to the IRS. Neither man was ever charged with a crime,” IJ said.
While they ended up getting their money back, it took years.
“The Clyde-Hirsch-Sowers RESPECT Act is an important first step to address one type of forfeiture abuse by one federal agency,” Sheth noted. “But civil forfeitures by other agencies continue unabated. With today’s vote revealing a broad consensus, Congress should seize the opportunity to pass comprehensive reform of federal forfeiture laws and protect the constitutional rights of all Americans.”
IJ explained: “Forfeiture reform is the rare political issue that transcends party lines. The national platforms for both the Democratic and Republican Parties have endorsed forfeiture reform, as have the editorial boards for over 135 different newspapers. In February, the U.S. Supreme Court unanimously ruled that state civil forfeiture cases are bound by the Eighth Amendment’s ban on ‘excessive fines.’ And in the past five years, 33 states and the District of Columbia have enacted forfeiture reforms.”
WND reported just days ago an IJ study revealing that policing for profit, the use of forfeiture programs, has “no meaningful effect on crime fighting.”
The report, called “Fighting Crime or Raising Revenue?” finds the nation’s biggest forfeiture program doesn’t help police fight crime, but they use it to boost revenue, “in other words, to police for profit.”
It looked at local crime, drug use and economic data from a variety of federal sources and compared the results to data from the Department of Justice’s equitable sharing program, which provides that state and local law enforcement cooperate with the Drug Enforcement Administration and other DOJ agencies – and get up to 80 percent of proceeds of forfeitures.
IJ said its conclusions call “into question whether distributing billions of dollars in forfeiture proceeds improves police effectiveness. The new evidence undercuts claims by prominent forfeiture supporters, such as former Deputy Attorney General Rod Rosenstein, who called forfeiture an ‘important tool that can be used to combat crime, particularly drug abuse.'”