When Lyndon McLellan, owner of a convenience store in North Carolina, was suspected of “structuring,” he received an unwelcome visit from federal agents at his store. In a small town, this kind of thing doesn’t happen all the time, and gossip travels very quickly. But that wasn’t the worst of it; the IRS also seized $107,000 from his business bank account, and when word got around about that, the facts got seriously twisted. It was rumored that McLellan’s account was frozen because the government was investigating possible drug dealing activities. Even though he appears to be innocent, the damage has been done as far as his reputation around town. And although the incident occurred back in October 2014, he is still fighting the IRS to get his money back. Well, we are talking about the IRS here, so that timetable sounds about right.
It’s called civil forfeiture — the seizing of money and assets without criminal charges — and it is completely legal, but it is also something that the IRS wants to back away from. This is not the kind of thing that the IRS wants their name on, especially not now with their public image already in the dumps.
Last year the IRS promised it would no longer pursue structuring cases without some other proven element of criminal activity. And earlier this year the IRS Commissioner, John Koskinen, offered an apology to people in McLellan’s predicament. It seemed that there would be some backpedaling by those in Criminal Investigations who are charged with investigating so called “structuring” cases. If McLellan’s story is any indication, I don’t think that has happened. It appears that mere policy changes are not enough to curb this irrational and unjust practice. What we need is binding congressional reform not an apology and a promise from the Commissioner.