Law Lets I.R.S. Seize Accounts on Suspicion, No Crime Required | Hacker News Reader

Law Lets I.R.S. Seize Accounts on Suspicion, No Crime Required

nytimes.com

236 points001sky130 comments

Before, I wondered how such things could not be found in violation of the constitution, while they were obviously taking property without prosecution, guilty until proven innocent, etc.

The answer is simple: because someone in power said so, and with his thugs buddies pressured the right people to turn it into law - aka "might makes right"

A recent US exemple: civil forfeiture, even of the money you set aside for your own legal representation, is totally ok, even if it actually impedes your right to defend yourself, cf http://www.economist.com/blogs/democracyinamerica/2014/02/ci...

To those who still can't believe civil forfeiture in the US, here is a sweet example in the EU. The constitution explicitely says : "The Union shall not be liable for or assume the commitments of central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of any Member State" (article 125 of the Maastricht treaty aka constitution)

Yet the european court of justice, equivalent to the supreme court, found that bailing out Greece etc. by the European Stability Mechanism (purchase of dubious greek debt) was perfectly kosher.

Now people object to the idea of the european central bank doing quantitative easy, for similar reasons - because it's against the basic premises of the ECB, the constitution, etc, but it will be done, regardless of what the law says, if enough pressure is applied by those in power to result in what is in practice disregarding the law.

Basically, you can have a crystal clear constitution saying X is strictly illegal, but unless it's followed in practice, it's as worthless as the freedom of expression that was granted to the citizens of USSR by its own laws.

There used to be a separate judiciary power - even the state was subject to laws. It is no longer the case. This separate power is being swallowed by the state.

Is it profond disrespect of not just the spirit, but the letter, of any constitution? Whatever. "Might makes right"

(Edit: clarified)

I think in the end you have to realize that 'rule of law' is really a restricted form of 'rule of man', since it has to be enforced by people.

And laws are written by people too.

And broken by them - it just depends on who you are or what power you wield as to how you are handled for breaking them.

I've said it several times before here, and I'll say it again. US needs a "Constitutional Court" that filters out unconstitutional bills after they are signed by the president, and before they become law. Some might still get through, but everything else will function just like it does today, so there will still be a chance for for that bad law to reach the Supreme Court and be struck down once and for all.

The benefit of a Constitutional Court however is that it should filter out most of the unconstitutional bills trying to pass the government. I feel that right now it's way too easy for Congress/president to pass an unconstitutional bill, and then waiting anywhere from 5 to 20 years (or to never), to strike down that law, time in which a whole generation can be abused by the government (which I find unacceptable - bad laws should be struck down much sooner).

I also think special Courts are usually bad news as they tend to become biased towards their purpose. So for example a "patent Court" will become biased towards patents, a spying Court will become biased towards spying and so on. But in this case, a Constitutional Court becoming biased towards the Constitution would actually be a good thing.

How do you set up the incentives so that it's in the interest of the court to do its job, and not bow to the inevitable pressure to rubber-stamp bills?

If you asked Washington or Jefferson probably something like death for those who have (treasonously) knowingly violated the constitution.

That isn't treason, actually. Treason is specifically defined in the Constitution:

> Treason against the United States, shall consist only in levying War against them, or in adhering to their Enemies, giving them Aid and Comfort.

Perhaps not to that definition but the according to websters. 'the betrayal of a trust or confidence; breach of faith; treachery.'

Then perhaps Washington or Jefferson would point out the specious reasoning in summary executions for having " (treasonously) knowingly violated the constitution" using a definition of treason which is unconstitutional.

"Rightful liberty is unobstructed action according to our will within limits drawn around us by the equal rights of others. I do not add 'within the limits of the law' because law is often but the tyrant's will, and always so when it violates the rights of the individual." -Thomas Jefferson

If you want to argue that personal liberty should take precedence over the authority of governments, fine.

You can't, however, argue for strict constitutionalism and what appears to be a form of anarchism at the same time.

That the constitution should be treated as a sacred body of law for which an 'improper' interpretation by the government could be a killing offense is not actually a constitutional precept, and it's not one with which the will of the majority would agree, nor is it an interpretation which legal precedent supports, your single, not actually legally binding quote by Thomas Jefferson notwithstanding.

So pick one. If it's the latter, the redefinition of treason is indefensible as a pretext. If it's the former, dispense with the constitution altogether, as it interferes with the efficient execution of popular will.

Does the constitution define all laws? No. There is nothing about petty theft, or murder even. The truth is corruption runs rampant in this country and Jefferson knew that sometimes the only solution to tyranny is the tyrant's head at the end of a pike. This isn't about 'improper interpretations', its about the theft of liberty.

And who enforces that? The Constitutional Court Court? You've only moved the problem.

The people, if you can get a representative number of signatures the individual is incarcerated and a measure is put on the ballot.

That is a pretty broad shift from the theory of how courts operate in the U.S.

We have an adversarial system where the legality of a law attacked by someone harmed by that law and defended by the government. Who would a constitutional court represent? Dead white guys from 1780? Someone else?

If created, the first thing the court would do would be to rule itself out of existence, because the Supreme Court is at river of what is/isn't constitutional... And has been recognized as such since John Jay.

"If created, the first thing the court would do would be to rule itself out of existence, because the Supreme Court is at river of what is/isn't constitutional... And has been recognized as such since John Jay."

If created through a constitutional amendment, this isn't a concern...

And yet the FISA Court is not adversarial.

I like the sentiment of the idea but in practice, I'm not sure it actually works. The major issue is embedded within this quote in the article: "Using a law designed to catch drug traffickers, racketeers and terrorists by tracking their cash, the government has gone after run-of-the-mill business owners and wage earners without so much as an allegation that they have committed serious crimes"

Maybe that law would have been caught by the constitutional court, and maybe not. But in any case, it's clear that the modus operandi of too many government agencies is to find an existing law that can be most easily bent or twisted from it's original purpose and context in order to allow them to most effectively enforce what they want to enforce.

Perhaps what's really needed is more upfront transparency - transparency by design. Which, of course, is exactly what governments don't want. But that might be the only truly effective approach, because you aren't going to stop bureaucrats from doing what they do, and power by it's very nature corrupts. But whether it's this case, or the spying scandals, or police abuses, the thing that got the most results, fastest, was exposure of the situation to the public.

Well, we already have a version of that for the Executive branch in the form of the Office of Legal Counsel, and that's how we got John Yoo and Jay Bybee.

You know that governments tend to abuse their power over us, so you want one arm of the government to keep the other one in check? One head of the Hydra will prevent the others from biting you?

The US is a prime example of how a limited government just doesn't stay limited. Words on a piece of parchment don't actually prevent psychopath rulers from abusing us. The USSR had a constitution too, and it "guaranteed" free speech just as well as any other constitution would, ie. not at all.

There's no political solution to the abuses caused by an arrangement of rulers vs subjects. The only way to improve things is to realize we should not have rulers at all.

"I've said it several times before here, and I'll say it again. US needs a "Constitutional Court" that filters out unconstitutional bills after they are signed by the president, and before they become law."

We already have this. It's called The Supreme Court. The Supreme Court can already declare any law unconstitutional.

Yeah but they don't have an automatic veto before legislation goes into effect. As he said, they only examine the issue, if at all, years later.

> I've said it several times before here, and I'll say it again. US needs a "Constitutional Court" that filters out unconstitutional bills after they are signed by the president, and before they become law.

The reason the US does not have such a thing is that the principal of the US judicial system is to operate on real controversies with real, concrete interested parties rather than dealing with abstract, theoretical conflicts.

> I also think special Courts are usually bad news as they tend to become biased towards their purpose. So for example a "patent Court" will become biased towards patents, a spying Court will become biased towards spying and so on. But in this case, a Constitutional Court becoming biased towards the Constitution would actually be a good thing.

I think you mistake the way that specialty courts become biased -- like other regulatory bodies, they become biased by developing a strong relationships with the most-frequently involved parties appearing before them. For a Constitutional Court, where the potential pre-implementation challengers of a law are varied, but the defenders are the same, the expected bias is probably not in the direction you'd like.

I'm not sure the Greek debt thing is relevant. The fact that the EU is not liable for Greece's debts does not mean it can not choose to give money to Greece.

I think you can easily say the same thing about every single amendment in the Bill of Rights. Might does indeed make right and usually might is money. While the article points out that making deposits below 10k is not illegal and while that maybe technically correct, just like many things that were not explicitly illegal in the Communist system could harm one greatly, many things that are not strictly illegal in the US can harm one greatly. I think we need to start looking at things another way.

For lack of better words (though I'm open to suggestions) it is essentially illegal in the US to travel with cash, make deposits under $10k, or really, anything the government authorities deem to be illegal vis a vis money that can be taken via civil forfeiture laws. If one can't run a business or even save for his children's college without fear of losing the money to the government, what then is the difference between our system and that of authoritarian regimes if both systems are not ruled by laws but by the greed of police and government agencies?

More poignantly, what is the difference between our system and the system of English law in effect at the time of the Revolutionary War?

> what then is the difference between our system and that of authoritarian regimes if both systems are not ruled by laws but by the greed of police and government agencies?

That is not fair. There is a huge difference between the systems, I have lived in both a communist totalitarian country and in US.

And the difference is this:

US government and the culture as a whole has much better handle on PR and brainswashing. In the communist regime I know, very few privately believed or respected any of the ideals about the "party". All those slogans and so on.

In contrast in US many believe in fantasies and have a very distorted view of reality. Either that government is totally useless and evil or that one should obey, listen, be proud of it, and sign up to go fight wars on its behalf when it asks you, because it is the "best country in the world".

In rest, effectively, how much power the "lower classes" have is about the same as in the other regime. With some trade-offs. For example. Here they have the "freedom of speech". So anyone can grab a megaphone and go stand at the corner downtown, and yell about space lizards. That is nice. In the communist country they would be in an mental institution or maybe a work camp. Also here they can buy an iPhone, say, if they save enough and maybe sell enough food stamps. But on the other hand, they don't get free housing and healthcare. Which is what the communist regime had.

My parents grew up in the Polish People's Repuplic and they basically come to the same conclusion. I've heard several time that none of their friends believed the propaganda, they just all played by the rules.

Yes, I agree that the US brand of tyranny is much more clever and doesn't need to suppress things like speech because it realizes that "free speech" is mainly irrelevant and does not threaten its all out rule. Also, having lived under both systems, I agree with the conclusion that most people under Communism, at least the Eastern European kind, did not believe the government B.S. and thus were generally much smarter than the people who believe that B.S. here in the US despite having very few connections to the outside world and unbiased information compared to US citizens.

In the end however, there is no difference and this is more than a fair comparison. Tyranny is tyranny. Being able to buy an iPhone or gab into a megaphone doesn't change a thing.

I feel that our system is just a lot more subtle. It mainly gives the illusion of freedom and choice.

Once you get over what a mess the system is, once you lower expectations, instead of being depressing it can actually be interesting. Try to see it from a detached observer status, even though it affects you and people you love, because you cannot do anything about it anyway. A great teaching tool about our powerlessness is the StarPower game, play it with people someday:

http://en.wikipedia.org/wiki/StarPower_(game)

I'm of the opinion this sort of thing cannot be changed, it's just a mechanism of humanity. Cynical, selfish people rise to the top, those who optimize for power get it. They self-select. Ambition for power, for control over others is not something people with empathy would want to work hard for.

Revolutions just change who is in power, they never change the dynamics, and often make it much worse. Think Animal Farm.

Western Democracies have a shit load of problems, but I actually think they're the least worst option. At least we mostly get free internet and free press.

I actually think one of the worst problems we have is that so many people are actually ok with violence against black people. Trayvon Martin, police shootings, rampant prison violence. That's probably the thing I am least OK with in our society, well that and violence against women, but these are actually a problem with the attitudes of the general population and local governments, not a big bad corrupt federal government.

I also think the FBI is a pretty good organization when it comes to fighting political corruption. FBI agents are seriously committed to rooting out corrupt politician, and if anything the FBI's capabilities to go after politicians was actually a threat to our democracy when Hoover was running that organization. So even if you mistrust the FBI, that's something to be thankful for.

> I'm of the opinion this sort of thing cannot be changed, it's just a mechanism of humanity. Cynical, selfish people rise to the top, those who optimize for power get it. They self-select. Ambition for power, for control over others is not something people with empathy would want to work hard for.

In that regard, things are quite a bit better than they were, say, in the fourteenth to sixteenth centuries. Eighteenth century Europe brought a kind of reform to business, the new discipline of economics started to hold politicians at least somewhat accountable for forwarding the cause of trade for its own sake. They of course still routinely interfered with commerce in service of their own ends, but this sort of thing became frowned upon enough to become a major issue in the democratic revolutions of the period.

So I wouldn't say that it can't be changed, our ability to organize on levels large and small is slowly evolving for the better, and one of the big drivers of that evolution is outrage.

At one point in human history, effective leadership was a big stick and the strength to wield it. Now even the most brutish strongman needs to have certain social graces or he won't be in power for long.

I agree with both of you. The system cannot be changed within our lifetime, so sit back, grab some popcorn, and enjoy the show. That being said, over the long-term, there does seem to be slow progress.

> He added that making deposits under $10,000 to evade reporting requirements, called structuring, is still a crime whether the money is from legal or illegal sources.

I don't understand this. How can anyone know whether what they are doing is wrong unless those rules are built into the structure of the law and the infrastructure of banks?

From how I read this, one government 'report' gets triggered if deposits are over 10,000$. Another government 'report' gets triggered if deposits are made for an indeterminate period of time under 10,000$.

> Instead, the money was seized solely because she had deposited less than $10,000 at a time, which they viewed as an attempt to avoid triggering a required government report.

How can they assume this?

There's really no hard rule. It's based on the feeling of whoever is reviewing your account transactions. Even if you deposit $2-3k every month, your account could still be under suspicion.

They have more guns than we do. They can do pretty much whatever.

Bank employees are instructed to file reports on people who deposit funds in ways that appear to be avoiding reporting requirements. Even inquiring about limits can trigger one.

http://en.wikipedia.org/wiki/Suspicious_activity_report

Also you've triggered a MIL report if you've ever used a money order or cashier's check for more than 3k. A lot of this stuff is old and they haven't adjusted the amounts.

It isn't just the act of making deposits less than $10,000 that is structuring, as you quote, it's making deposits under $10,000 to evade reporting requirements.

If you run a small business and make deposits of $5,000 because that's all you build up in a week, you have a pretty good chance of making the case that you are just doing your business. If you need $35,000 for some purpose and make 4 or 5 trips to the bank to get it, your explanation of why you needed to make 4 or 5 trips is sure to amuse the investigators.

It is none of their business why I needed my money or how many trips it took.

I understand what you are saying, but the law says different. My main aim with the comment was to point out the (apparent) subtlety, not to declare my views on the situation.

> If you need $35,000 for some purpose and make 4 or 5 trips to the bank to get it, your explanation of why you needed to make 4 or 5 trips is sure to amuse the investigators.

Because walking with $35K in your pocket is simply stupid?

Taking multiple trips would make the risk of being robbed at all go up but the amount taken could never be more than whatever fraction of $35K you decided to walk around with.

Anything over $5000 is madness. once in my life I walked around with in excess of $10K on my person and I felt decidedly funny even though nobody could have seen the difference between the skinny kid in jeans with and without that kind of money on him. Never been more nervous in my life on the street, it was as if there was a huge red light on my forehead spelling out 'target'. I could totally understand why someone would not withdraw $35K all at once but rather make multiple trips with much smaller amounts.

My bank seems to agree with this principle because it is impossible to transfer more then 20K in one go even from my own account to one of their internal accounts.

I wonder if the 20k is due to a similar reporting requirement?

Is that for all types of transactions, like if you had a business account and wanted to wire money to the U.S.?

I don't know, I've not yet had the need to wire such large amounts outbound. It might be a limit tied to my checking account or a more general limit. (I was paying off a mortgage so I ended up doing a whole pile of 20K transactions just to get around the block.)

Yes. Banks are required to file CTRs (currency transaction reports) for transactions over $10k. They also have an obligation to file SARs (suspicious activity reports) for suspicious transactions as low as $5k or less in some cases.

The former Governor of New York, Eliot Spitzer attempted to obfuscate a $5,000 wire to an escort agency, his bank's compliance department filed a SAR, bringing his activities to the attention of Federal prosecutors, and led him to resign to avoid a worse fate.

This is a huge problem for operators of cash businesses... It's easy to screw up when they try to avoid paying taxes and get too greedy.

There are also Monetary Instrument Logs (MILs) for purchases of cashier's checks and similar items for amounts between $3,000 and $10,000

Maybe I'm just dense, but who are you and all these people who have large sums of cash stolen by law enforcement dealing with that has to have it in cash? When I had to get $7500 to the dealership where I bought my car, I just got a cashier's check. The $10 they charged me was more than worth the peace of mind I got from knowing it was safe against thieves both with the force of law behind them and without.

I don't think I'd do business with anyone that wouldn't take a cashier's check.

I've moved more than 10k in cash around just to avoid paying that 10 bucks. $10 is still $10.

The phrase for this is "Penny wise and pound foolish."

So when you get your change from the local shops, do they give you a cashier's check? One of the things I did at my mother's bookshop was take the weekly cash takings to the bank, and bring back some change for the next week. Those trips were usually in the low- to mid- four figures.

I'm interested in how you propose to have a retail worker somehow convert the cash on their premises into a cashier's check, so they can walk to the bank and deposit it.

Sure, for that use case, you do actually need to haul around cash. Assuming it's not economical to use an armored car service. Also the stakes in this case are much lower. Losing a week's worth of revenue isn't quite the same as losing the down payment of your mortgage. But that wasn't what the grandparent was referring to.

Cash deposit for a store I worked for.

It's totally subjective.

I have never had 20K in my pocket, just 5K. But when I plan to withdraw money, I dress less than nice, I don't shave myself, I may use my uglier shoes, etc.

And they I forget the money. So I don't look funny, because I'm not thinking about the money. I'm probably eating something bought in the street, so I'm focused on the food.

But of course I do agree with everything you say.

Easy explanation:

To avoid getting stopped by cops who'd "confiscate" it just because carrying so much money is suspicious and drug-dealer-like.* Or, what amounts to the same thing: To avoid losing such an amount of money in a mugging.

* http://www.washingtonpost.com/sf/investigative/2014/09/06/st...

>You have a pretty good chance of making the case that you are just doing your business

Did you read the article? Specifically the story of the business that made <10k deposits because they had theft protection of max 10,000 ?

By the time you "make a case" you're already out lawyer fees and risk your business being closed. Please read the article (again). IRS does not need to show that you were trying to evade reporting requirements to seize the money. They don't even need to file a case!

There's millions of small businesses, there must be hundreds of thousands making frequent medium sized cash transactions and they made 600 seizures.

A statistic like that doesn't make things any more just for the 600, but it serves as some sort of guide for how much a cash business should worry about it.

My problem isn't with the statistics. My problem is that the law depends on fuzzy bits of information that are easy to rhetorically manipulate in order to direct a case towards (complete and total financial asset seizure, immediately) or (not). It's not logical. The seizure is not reliant on facts. It is not reliant on evidence.

This demonstrates an imbalance between ability to determine truth, and ability for the powers that be to act. It is dependent purely on abstract pattern. Other commenters have pointed out that that model can be used to accurately represent the behavior of innocents.

I'd much rather see data on the effectiveness of this law. Does it actually track suspicious activity? Does it work, and is the value of that work enough to justify the grief it creates to the few you refer to that the law affects?

I think I'm just separating concerns more than most here. I guess because I'm not that outraged by society doing something unjust (because look around).

Does it sound like the law is being used unfairly? Yeah.

Does it sound like the law as written is easy to use unfairly? Maybe, probably yes.

Would I oppose changes to the law intended to make it harder to abuse? No.

Do I think it is a major practical concern for a typical small business or individual? No.

I don't think it is inconsistent or difficult to hold all those ideas at once.

This is the problem. The law requires intentionality. The enforcement of the law "divines" intentionality. Seems a clear problem because the executive branch (enforcement) is essentially playing judge, jury, and executioner. And by doing so is essentially dis-regarding the intentions of the law as it was written. (cue: irony).

> How can they assume this?

Because they don't have to prove anything to seize the money. You are assuming that you are dealing with a system based on rule of law when this is clearly not the case.

> I don't understand this. How can anyone know whether what they are doing is wrong unless those rules are built into the structure of the law and the infrastructure of banks?

Criminalizing secondary and tertiary acts related to a crime is a disturbing trend. There's an act that is broadly regarded as a crime -- in this case, tax evasion or money laundering. Well those crimes are hard to detect. So we create a new reporting requirements law. Well, that's easy to circumvent by moving money in smaller amounts. So we create a new law that makes it a crime to move money in smaller chunks if it is related to avoiding reporting requirements.

This is problematic. It makes acts illegal that viewed in isolation are widely regarded as perfectly legal. Even worse, these secondary acts are commonly done legally by many citizens. What citizen doesn't move money around in small chunks? This gives a lot of discretion to the government to charge you with a crime. Afterall, your actions on their face are very similar to that of tax evaders. In fact, even my earlier example of money laundering is one of these secondary crimes because it is used to clean the money obtained through illegal activity.

The law is a tool used against the population. Your right to make cash deposits counts for nothing in light of the State's right to fuck anyone they think might be criminal. False positives don't matter. They just create more work, and grow the department. You'd think they'd have more reliable tools but this is their bread and butter.

How on earth can these practices continue in a country which prides itself - to the level of claiming so in the last line of every stanza of its anthem - on being the 'land of the free and the home of the brave'? This type of injustice should be taught in history and literature classes in the guise of Prince John and the legend of Robin Hood. It should definitely not be part of the government curriculum.

Required reading to become successful in the injustice department:

    Robin Hood
    1984
    Brave New World
    ...

Robin Hood?

Part of the story of Robin Hood is where Prince John, in need of more money to satisfy his personal needs, increases 'taxes' on the population and sends his collectors around to basically take what they can - a rather strong resemblance to the situation as described in this article.

True, although nobody got to vote for Prince John.

Right but if you're inferring that by comparison the average person has an influential voice in our legal or political power systems... by voting... then you are extremely naive. Regardless of who wins, the end result is the same.

You know, unless you're gay, or a woman or....

That attitude of justice and fairness, is now mostly a facade. The culture has been rotting for some time. The good things that remain, are left-overs from a culture that no longer exists. The people that find the government's behavior outrageous, find that they have no means or power to stop what's happening, they are in the minority.

When was that culture of fairness and justice in effect? I can't think of any such time.

You guys are depressing. Try living in the Soviet Union. It's all relative !

Oh, no, I'm being an optimist - I don't think the US and/or world is moving from a fair and just culture to a terribly unfair one. I actually think the world is, by and large, somewhat better than before. Depressing would be to think that we lost a fair and just culture, no?

    The Prince

1984 and BNW present two very important macroscopic anti-patterns, but they aren't so great at documenting the day-to-day banal tyranny that make the system what it is. The Prince, OTOH, was a real eye-opener.

To someone at the bottom of the corporate food chain, very little of its advice was directly applicable, but it really helped explain the behavior of the people above me. It turns out they're not nearly as irrational and narrow-sighted as I was often tempted to believe. They were just shamelessly putting their own needs first. I probably had a dozen "Ohhhhh... THAT's why X did Y despite the obvious pitfall Z!" moments scattered throughout my first reading.

I credit The Prince with singlehandedly doubling my ability to predict turbo-assholery and saving my skin at least once. Seeing a trap before it is sprung can really make all the difference. It should be mandatory reading for anybody who hasn't yet had ample opportunity to observe the dark patterns of office politics first hand.

Sounds like a great read. Which edition / print would you recommend? (There's about 5 on amazon)

There's a public domain copy for Australians from The University of Adelaide: https://ebooks.adelaide.edu.au/m/machiavelli/niccolo/m149p/

Awesome! thank you.

This has been the case for a long time. The IRS works on a guilty-until-proven-innocent basis. Take the case of collectible gain tax, if you do not have evidence to prove the value of the item on the date it was acquired, then the IRS calculates the tax based on the total value of the item, not just the profit. So if you buy something that might increased in value at a later date, you better keep the receipt.

And of course, anytime the government freezes your asset and property, it takes a tremendous amount of time and effort to get it back. Meanwhile, you won't have any means to hire a good lawyer.

And if you do have the means to hire a lawyer they would likely require you to travel to Virginia and pick a lawyer from their list of lawyers approved to represent people in that specific district.

Our justice system is a complete joke, I wonder if it's always been this way or if it's just common knowledge now that every indiscretion is publicized on the internet.

Basically, once your asset has been frozen, the game is nearly over. Even without any charge being pressed, it takes years to get back the seized asset/property, if it's given back at all, that is.

If you were charge with a crime and this gets dismissed later for whatever reason, things get even tougher.

Additionally, if you even get arrested, you won't have any money for bond (a good time to call up the rich relatives), and you could be in jail for a long time.

And if you do have the means to hire a lawyer they would likely require you to travel to Virginia and pick a lawyer from their list of lawyers approved to represent people in that specific district.

Completely false. You can hire any lawyer you want, wherever you want in the US. And you can force the IRS to litigate in the federal district court of your choice.

Practice before a federal court merely requires admission to practice in any state court.

That's not what happened with Ladar Levison (the Lavabit case). He couldn't use his lawyer, he had to find a new one in that particular district in Virginia.

So I know for a fact the last half of your statement is not true, although it might apply to cases that aren't related to certain government agencies.

Keep in mind, this is the only government entity who spent millions of dollars to figure out how to continue to collect taxes in the event of a nuclear war and the collapse of society.

Great book if you want to get really scared about how much power the IRS actually has: http://www.amazon.com/Law-Unto-Itself-Abuse-Power/dp/0679732...?

I wonder whatever happened to the "kinder gentler" IRS we were supposed to get with the Restructuring and Reform Act of 1998?

Just in case you're lazy: http://en.wikipedia.org/wiki/Internal_Revenue_Service_Restru...

> this is the only government entity who spent millions of dollars to figure out how to continue to collect taxes in the event of a nuclear war

There is an odd implication to that statement, that you apparently believe multiple government agencies should have developed such plans.

I read it the other way around, that other governments wouldn't do something so ridiculous.

"in response to questions from The New York Times, the I.R.S. announced that it would curtail the practice"

While it's upsetting that this practice happened in the first place, and even more upsetting that the judiciary seemed to allow it, it's a relief to know that the New York Times here fulfilled the intended role of a free press.

I heard both Tom Friedman and Paul Krugman were on the phone call and really had at them.

Even more upsetting than that is that they're just agreeing to curtail the practice, but the law is still on the books, waiting to be abused by the next administration, or the one after that. As I'm apparently quoting the hell out of founders and statesman today:

"The best way to get a bad law repealed is to enforce it strictly."

- Abraham Lincoln

Two good additional pieces. One is John Oliver's segment on this from his show Last Week Tonight.

https://www.youtube.com/watch?v=3kEpZWGgJks&sns=em

The other is a piece by two of the people who were originally behind the law but say it has failed and should be abolished.

http://www.charlestondailymail.com/article/20140923/DM04/140...

So as an individual who wants to conduct transactions involving more than $10,000, in increments of less than $10,000, what do you do?

You can't file a Currency Transaction Report on amounts less than $10,000. You could demand that the bank file a "Suspicious Activity Report" on you, to make it very clear that you're not trying to evade limits, but ... they're under no obligation to do so, are they? And my understanding is that there's a Gag Order attached as well, and the recipients of the report probably won't get the nuance that "you asked for it" at all.

I think the "structuring" rules are kept vague because well-defined rules would be used by people who wanted to avoid attention, for various reasons.

For the 8 trillionth time, let me point out that this is a perfect example of why people should vote for Libertarian candidates. Pretty much NO Democrat or Republican is going to take any strong stand against this behavior... OTOH, pretty much ALL Libertarians would fiercely oppose this.

So, this November, when you go up to that ballot box...

I still fail to see how this kind of thing avoids violating the Fourth and Fifth Amendments.

The Constitution is full of weasel words like "due" and reasonable".

It does violate the US Constitution. They simply don't care that it does, and there is nobody left to stop them. The US has an increasingly extra-legal, extra-constitutional government. What consequences have there been to the vast violations, lying to Congress, law breaking in the spying programs? None, and there never will be. That's a system beyond any decent rule of law.

So, carry $18,000 and it gets seized by highway cops because law-abiding people just don't carry that much cash http://www.washingtonpost.com/sf/investigative/2014/09/06/st.... But take it to the bank in two batches of $9000 and it gets seized by the IRS because law-abiding people don't avoid large deposits.

Meanwhile corporate tax abuse has no criminal consequences for decision makers in the corporate!

Innocent until proven guilty doesn't apply when all three branches of government agree that it doesn't apply.

That's an understatement. The entire Constitution doesn't apply if two branches of government agree it doesn't.

Sadly, I think only one branch is needed these days.

Sidebar: the IRS also has special privileges when it comes to viewing your private data. Most folks don't know this. If your account is "flagged" (for whatever reason by a worker) they can go online and take just about any personal data of yours they want.

The only reason more people don't know about this is that they haven't started abusing it as much as they do funds seizure.

The IRS (and tax law) has some egregious structural defects that will not be fixed with a law here or there. A complete overhaul is desperately needed.

And there's that boot again, grimly stomping on a human face...

How about a workaround: if you want to deposit less than $10K in cash, you first withdraw an amount that, when added to your original deposit, totals $10,001. This automatically triggers the reporting requirement. If enough people made every deposit reportable, it would be like a denial of service on banks and the IRS.

It won't be a denial of service TBH, since the american government in general has complete knowledge of financial transactions that go on between US financial institutions. This kind of report anyway can be reduced to a 1kb tuple.

And your suggestion is an active behavior that will be done by a minority, that doesn't work.

You'll be surprised at all the people making "large" cash deposit, seemingly oblivious to the law. FinCEN is already bombarded with tons of information.

In the process, some criminals slide under the radar and innocent people get caught up in the net.

The $10,000 limit is not a hard boundary. Banks can and often do report people for making much smaller deposit than this, just to cover their ass. With inflation going higher, $10k is not that big of amount as it used to be.

And we're not just talking about cash deposits here, everything is monitored including money order, wire transfer, checks. For example, if you have regular incoming wire transfer, and it doesn't even have to be international, you better have all the documents and explanation prepared when the IRS knocks on the door.

In this scenario, if the bank is feeling generous, it will refuse to service your account and ask you to go somewhere else. Often times though, there won't be a warning. Your account will just get frozen, "pending reviews from our security department."

Never before have I felt cash under a mattress was safer than in the financial system.

When might makes right how far behind is a revolution to clean out the bullies and tyrants who made it possible? Have leaders not learned what turns the majority or vocal minority against them... not just at the ballot box, but by the guillotine, armed resistance, suicide bombers, snipers etc?

The IRS violates the Bill of Rights directly and deliberately. They must realize that it will be defended. If these words for example were pulled down that would be a violation of the first amendment. The IRS is violating the 4th and 5th and 6th and 7th and 9th amendments which means they steal your money without lawful reasons.

The 6th amendment is violated because they even deliberatly take additional money given to you to defend yourself in court and so they knowingly sabotage your ability to defend yourself because of the thefts out of your bank accounts. The 6th is also violated because the IRS cause legal delays and you have a right to speedy legal redress but they deliberatly delay this.

Bill of Right in Plain English ------------------------------ First Amendment: Speak your mind freely for it is your right. Each and every persons has a right to freedom of speech, religion of choise, freedom to write what they like in the press or on the internet, freedom to gather, freedom to petition or protest against injustices.

Second Amendment: Defend yourselves and your nation. Keep and bare armes in a well diciplined militia. The reason is that goverments often turn on the people so that we the people must be allowed to defend ourselves or defend against foreign invasion if the government itself fails to do this. An example of defending your country is defending the Mexican border against ISIS terrorists or against Ebola spreading because the government cannot or will not.

Third Amendment: Your home is your home, it cannot be taken over by the army or navy or airforce or government force of any kind. You shall not be forced to house in your house soldiers even if they pay rent. For the same reason your property cannot be taken for military use even in a crisis and no other law can override this right.

Fourth Amendment: No government agency shall search, spy on or steal from it citizens. Simply put the government shall not carry out unreasonable searches and seizures. This applies to the person, vehicles, houses, businesses, telecommunications equipment and computer equipment like your phone. This law makes intercepting information or hacking by goverments without warrents illegal because it is theft, and ureasonable spying. Thefts from bank accounts without legal warrents is theft and you can arrest those responsible both for theft and for violating the 4th Amendment.

Fifth Amendment: No government agency or person shall take anything from you without due process and they sall not short cut such a process of law. You shall not be deprived of your life or liberty and freedom without being able to call upon the law to bring a possible defence using witnesses. Your property cannot be taken without the process of Law. You shall not be forced to talk if you do not wish to talk. You cannot stand trial twice for the same crime event. A court cannot presume guilt by you pleading the 5th.

Sixth Amendment: You have the right to legally defend yourself. You have the right to a speedy public trial and access to witnesses.

Seventy Amendment: If you are accused you have the right to a jury trial. The jury cannot be selected or illegally influenced in such a way as to cause a bias for or against you.

Eighth Amendment: Government persons or agencies or any organization shall not sadistically or maliciously punish you. You shall not be given unrealistic bail or unrealistic fines. You shall not suffer cruel and unusual punishment. Common sense and fair!

Ninth Amendment: You have many basic human rights as do visitors to your country. Even if these rights are not listed they shall not be taken from you nor violated. Examples include the right to defend others, the right to defend your country against socialist communists because they are destroying your country. The right to pronounce any laws that violates any of the Bill of Rights as invalid and to arrest those that attempt to destroy the Bill of Rights. The right to take photographs or videos in public places without being molested or threatened. The right to warn everybody that the US government is passing laws that violate all 10 amendments at the same time! The right to have the same rights as an American so as not be abused as a tourist or visitor. The right not to be sexually violated at the airport. The right to prove that personal violations at airports and ports is causing other nations to stop trading with the USA! The right to prove that the stock market is ultra fragile and represents false illusionary wealth. The right to arrest the police when they commit a crime. The right to lay down your life for the US Constitution and Bill of Rights without being accused of being a terrorist. The 9th amendment allows you to explain in plain English the meanings of all the amendments and to teach them is schools! The ninth allows you to put on death row with due process anybody for treason who tries to remove the Bill of Rights simply because attempting to remove or water down this law can result in the murder of millions of Americans, so you are legally obliged to prevent mass murders because of the 9th. The 9th amendment allows you to object to carrying out illegal orders even from the president himself.

Tenth Amendment: The federal government shall not attempt to create laws that override state or local laws or act in any way outside its federal jurisdiction. FEMA for example has grown by combining many federal agencies together and frequently and illegally acts to violate the 10th as well as most of the other amendments. Instead of FEMA being a protective rescue organization it has become an internal brown shirt thug agency with military vehicles and gun boats. FEMA has become a predatory agency who are not your friends but your ultimate deadly enemy. Passing laws that violate state laws is a blatant violation of the 10th Amendment.

Conclusion the Bill of Rights or Amendments to the Constitution of the United States of America is YOUR FRIEND it was written by a genius to defend you, lose it and your own lives are is at risk. Your children's lives are at risk.

The weakening of the Bill of Rights is already deadly to your family.

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“You Nation of Cowards!”, says Eric Holder in his speech to the people of the USA. Yes he is calling us cowards! Holder is Obama's man, he is also the fall guy too. Perhaps he calls us cowards, because Americans put up with so much s-t from Obama, Holder, Bloomberg and Napolitano and do nothing. Is the IRS controlled by the mafia? Yes it is, but not for much longer!

"We the people" do noting even to defend the very Constitution that saves us from these criminals. There is a heap of criminal evidence against them all, growing by the second, but everybody is a powerless coward! WHY? The judges are paid-off by this gov mafia. All it takes for them to have power is a threatening phone call.

Sane legal teams that defend normal people are accused and sacked and then the mad legal teams take over - predictors against ordinary good people like you, like your sister or your brother or your father.

Everything that is good is accused of being totally evil and everything that is evil promoted by the media and government, promoted out of Obamas own mouth. It's all upside down political correctness barking madness!

The IRS is controlled by this mafia. The USA has gone to hell in a madhouse. The police are predictors dressed in black just like Na- zi storm troopers that shoot your own kids in the back! The law does not apply to the police and your life is worthless to them. You know that is true because of their swagger and they behave like school thugs. Police carry military hardware and shoot innocent people every day!

A few good cops, a few good sheriffs, a few good military commanders are a threat to Obama. HE REMOVES THEM. I guess we voted the wrong man in because he has removed over 300 good US military generals and captains! The consequence is ISIS or ISIL take over - off with your heads and all this when Obama is playing golf.

NOW! We draw a line in the sand. IT STOPS HERE! ----------------------------------------------- _______________________________________________ NO MORE!

So then the ARCH CRIMINAL HOLDER is actually right about: "WE THE PEOPLE BEING COWARDS". Is he right? He is laughing in our faces, except he does not realize that bravery starts out with inaction, starts with cowardly acts, or with shameful thoughts.

Eventually a few brave men and women wake up, they are ashamed by their yellow bellies, ashamed by their drug habits, their past horrible mistakes are shameful, ashamed because they fail to defend their friends in trouble.

Injustice is how a revolution starts and yellow bellies quickly become hard and brave and angry. DETERMINED NEVER TO BE COWARDLY AGAIN! NEVER TO TOLERATE EVIL SOCIALIST COMMUNISTS AGAIN.

The USA will wake up, but will it be too late? Has the police state taken over already? Yes, it has! America is NOT free anymore! Worse Obama is dragging the rest of the world the same way.

It is never too late and it is time to defend the Constitution which anticipated exactly these criminal minds taking over. For that reason the Constitution is an unrecognized genius that defends YOU against death by your own government. Obama knows exactly this fact and so he hates the Constitution of the United States of America. Almost every signature on paper makes him ARCH anti-Constitution reinforced.

It is so obvious - it is as if 80% of Americans do not know their own constitution and are high on dope!

Do you agree that clean minds must rule not criminals? Do you agree that you often tolerate what the rest of the world does not tolerate? If the IRS act like mafia then the IRS ARE MAFIA! If you simply tell them NO and everybody stands firm they absolutely cannot act against you. Why not say NO? Why not bring determined charges against them and charge them with treason because clearly their actions are killing the USA. Please Reply.

Deposit less than $10,000 dollars at a time and the IRS seals your bank deposit - no evidence no charges required! ISIS chops heads off but IRS is chopping its own head off. Trust has gone, common sense, gone, justice gone. Picking on Mum and Pop businesses that deposit less than $10 000 and confiscating the money is a sickness. I have studied the constitution and casual violation of the amendments by authorities for mad reasons is a sure way to destroy the USA. Then ISIS can step in. My idea is to VOTE somebody in that ENFORCES THE CONSTITUTION so that violations require capital punishment BACKDATED! That would be fair and legal and can save the USA instead of kill it. It seams that applying laws because of criminals that clobber innocent people is brain less. Come to England and start your own business - you pay about 20% TAX. Please come away from the USA about to destroy itself.

Just out of curiosity: Can someone dealing purely with cryptocurrencies (like bitcoins) avoid this situation?

Not really, you have to first funnel your funds into bitcoin, which may trigger a review. Heck, if you use a US-based cryptocurrency "bank" like coinbase or similar, they may even "review" your account.

(guess it's cash under the mattress for now ;)

Woohoo, I don't need to change my Russian habits!

He did say using purely cryptocurrencies, so if one was paid in crypto from the get-go and didn't have to convert to or from fiat, then an individual could protect their money, so long as they could keep their private keys secure. #opsec

... until you want to eat, and then realize you have to convert to a fiat currency because the grocery store doesn't accept bitcoins.

Bitcoins are pseudonymous, rather than anonymous - and worse, every single transaction ever is documented in the blockchain.

The IRS, I'm sure, is quite happy about this complete documentation, and while they haven't gotten around to (ab)using it, I'm sure they will sooner or later.

You can buy food with Bitcoin [1], although options are currently limited. I think this will continue to improve in the future as the counter-economy grows.

And I agree that Bitcoin's lack of anonymity is a big problem. However, there are techniques one can use to keep transaction histories private, like using stealth addresses and decentralized, trustless mixing services like dark wallet and coinjoin [1]. Other cryptocurrencies like Darkcoin [2] have built privacy features into their protocol. These solutions are not yet perfect, but again I think they will continue to improve.

Further agree that abuses by the IRS as well as other state agencies will continue. But why make it easier for them? It's only going to get worse in the future if we do nothing.

[1] https://bitdazzle.com/food [2] https://wiki.anoncoin.net/Anonymity_of_cryptocurrencies [3] https://www.darkcoin.io

Absolutely, if you buy your coins with cash (ie using localbitcoins).

You're still at the mercy of the volatility of the currency though.

Sure, until you need real coin of the realm to buy stuff in large quantity. How many people are able to convert Bitcoin off the radar into liquid commodities like gold? not many, and anyone you find that can is probably working for the police or tax authorities in your jurisdiction.

Senorita and US Citizens. Hopefully the system works as well as in Meixco and Venezuela or the former Chile under the 'strong supreme leader.'

1.)big corporation tax loopholes. reason dot com. So with tax receipts falling thee is an incentive to crack down on small business . 2.)small business is the engine of growth, but there is no need due to printing of money in the shadow banking system. the shadow banking is a TECHNICAL TERM used by the Federal Reserve and global banking system.

3.)Maybe the shadow baning system hides in the shadows with the derivatives. Oh.... NO, NADA, NONE derivatives have been seized like the ';working captial' of small business?

4.)BUT the IRS is well run according to talk radio like the lawsuits about the IRSgate Lois Lerner scandals? Strange how all the government records 'disappeared.'

5.)this only happens to Mexican-Americans for perhaps the FREE AGENTS, consultants, small business and even shoe repair will be targeted?

6.)So, there is a BIG drug war going on. It is global, but the USA is the leader, IMHO. Using OUR leadership skills in making the world save for democracy and the US leadership in IRAQ and the list of other 39 countries....

7.)So, there is a BIG drug war which is why most of the law enforcement highway stops are GOING SOUTH TO MEXICO. Why?

7a.)no great interest in stopping ttravelers GOING NORTH with possible durgs.

7b.)Travelers including average citizens GOING SOUTH have cash. reason dot com - police can seize it AND KEEP IT for 'police use.' Police use can include training - where else LAS VEGAS where prostitution is legal? Police use can include LUXURIES.

8.) this is in alleged possible preparation for the Cyprus bail-ins, where the governemtn seizes not only cash, but the bank accounts.

9.)First, raise the 10,000 ten thousand reporting requirment to ten times that or one hundred t. That allows any transaction, even 99,999$ to be investigated - that is seized.

Of course, of course, the 'informal handshake merchants' as in the mid east and bitcoin, digital currency are still operating.

so, perhaps most small businesses will go BIITCOIN?

22.)Will your local Chinese restaurant be affected?

IMHO, NO! Eventually ALL the chinese restaurants, especialy those iin the nationa's captial will refuse to serve those who are 'tax collectors.' perhaps you may look at the references in the bible about tax collectors.

PLEASE TARGET ALL CHINESE RESTAURANTS.

what is your opinion? Better off, with no chinese restaurants - most are family owned and deal with cash.

standard governnment advice is to use the offical bureaucratic procedures. Senorita

1.)take the day's receipts and WORKING CAPITAL to Walmart, 24 hours

2.)wire it to MEXICO, with no questions asked

3.)need money every week to buy supplies of food? then have MEXICO holding company wire it back to you.

4.)send copies to nation's capital, with copies to Mr. President and if needed the lolcal police station. SERVE them the copies with videoape evidence when they arrive to eat. Make sure to blank out any identifiers or ask them to hold up the 'mask in front of the face.'

5.)raise the prices and also lower your profit, for

THIS IS COST OF DOING BUSINESS IN THE USA, for

Mr. President says, small business is the engine of growth in the USA and we have no recession.

not legal or business advice, may be submitted to Colbert Report and other satire shows.

In two out of the three given examples, the people involved admit to deliberately structuring deposits to avoid reporting requirements. That is a crime, in and of itself. Ignorance is not a defense.

These people were given bad advice by bank tellers and accountants, but they are still guilty. Being offered a settlement by the IRS is more than they should have hoped for.

If anything, they're lucky to have been subject to civil forfeiture. In a criminal process, they would have lost all of the money, and also potentially spent time in prison.

"ignorance is not a defense" - It is a defense. Any reasonable person would accept "i did not know this thing i was doing, which hurts no one, was illegal" as defense against charges of a crime.

It's just not a _legal_ defense because the legal system unreasonably expects people to know and comply with the massive, ever-growing battery of laws.

"It will be of little avail to the people that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood; if they be repealed or revised before they are promulgated, or undergo such incessant changes that no man who knows what the law is today can guess what is will be tomorrow."

– James Madison

Not only that, but the law in question explicitly references motive. Breaking a large deposit into smaller deposits is only illegal if you do it to avoid triggering reporting. So ignorance of the reporting requirements is a defence. If you didn't know it existed, how could you try to avoid it?

If that's the case, they should have been prosecuted. Then they would have had the opportunity to defend themselves. Civil forfeiture mocks the the idea of justice.

One hundred times - yes. There is a reason the judicial process exists. There is a dangerous trend where federal 3-letter agencies and the executive branch is trying to bypass due-process at every chance possible to make their jobs easier.

It's even more amazing how many regular citizens come out supporting this activity. Often because they are 'tough on crime' or they think because they are criminals they deserve it or have no rights. This popular indifference to whether or not people charged with a crime should be treated as innocent until proven guilty is depressing.

This quote keeps getting repeated recently but its important: "A policeman's job is only easy in a police state." - Orson Welles

"Opportunity?" They openly admit committing crimes to the press.

I'm as outraged by the practices of civil forfeiture and asset seizing as the next guy (our government is increasingly looking like a stationary bandit [1]).

That being said, I'm not at all surprised that it happens and frankly not very worried: it's on a ridiculously small scale. There's a reason the NYT article focused on specific stories—the overall stats aren't exactly that scary.

Of 639 seizures in 2012, 128 were legitimate. While 80% false positives doesn't seem good at first glance, consider that it's out of over 700,000 reports. Less than 0.1% of reports actually led to people's money being wrongfully seized—that's a low enough rate that it's hardly worth worrying about. If anything, I'm more worried that they're not catching more money launderers and tax evaders (only 128 seems awfully low in a country of 316 million).

I think most of us would be hard-pressed to come up with a system which had a similarly low error rate. Paypal, for example, hardly does any better. Probably the biggest problem here is just that we don't provide effective enough mechanisms for remedying it.

But this article doesn't even provide sufficient evidence of that. Take the Hirsch brothers who have been having trouble reclaiming their money. While that's unfortunate, I can totally understand how an all-cash family business which paid vendors in cash might have trouble providing adequate records. If I were with the IRS, I would have flagged them as well—tax evasion runs rampart in those sorts of family businesses.

Yes, there's a small problem in our justice system (that it's hard to correct false positives). But it's hardly something the average person will ever be affected by. Focus on the scarier things, like systemic wiretapping.

1: http://en.wikipedia.org/wiki/Mancur_Olson

> Less than 0.1% of reports actually led to people's money being wrongfully seized—that's a low enough rate that it's hardly worth worrying about.

Unless of course it is your money that is being wrongfully seized.

And how many of the 128 were "drug traffickers, racketeers and terrorists"?

There are always bigger problems. If a discussion thread just becomes long enough, eventually you get people telling us to be happy because there are others in Africa not having food.

This saying comes to mind.

"It is better that ten guilty persons escape than that one innocent suffer"

Not to mention innocent until proven guilty.

If the rate is really 128 proper seizures out of 739, it makes no sense to keep this automatic seizure. Instead have them do more investigative leg work before seizure so that it is whittled down further. Or even freeze the money only for a month before which the IRS needs to make a case to a judge about why further time is warranted before returning the money.

I can easily come up with a system with a lower error rate. Just get rid of this silly reporting law so we no longer have the opportunity to make mistakes with it.

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