By law, you must report to the IRS bank transactions of $10,000 or more. It is one government tool for curbing white collar crimes. Manipulating deposits so that they come just under the reporting requirement is called “structuring,” and it is illegal. The IRS can seize bank accounts without notice to the account holder when structuring is suspected, and they have done so freely in the past, even if the money is obtained legally.
It is obvious to Commissioner Koskinen that this policy is way too harsh. Today the commissioner apologized to taxpayers who have not been treated fairly “under the code.” I don’t know how to take this apology. It seems a little half-hearted to me. It’s like saying, “we are sorry for seizing the accounts of law-abiding citizens, but we were only doing what we are permitted to do under the code.” And it’s not necessarily a win for taxpayers until some changes are made to the code. Semantics aside, it looks like a step in the right direction.