IRS Also More Than Willing To Steal Money Under The Pretense Of Crime Fighting

from the because-involuntary-taxes-aren't-thieving-enough dept

The Department of Justice and its underlings (the FBI and nearyl every law enforcement agency in the nation) have turned the ideal of asset forfeiture (defund drug dealers; return money to the defrauded, etc.) into a free-roaming, many-tentacled opportunistic beast, one that “liberates” any amount of “suspicious” cash from tourists, legitimate business owners or anyone else who just happens to have “too much” cash in their possession.

The IRS is in on this as well. The agency doesn’t need to prove anyone is guilty of anything before seizing assets. It just needs to feel that things aren’t quite right.

For almost 40 years, Carole Hinders has dished out Mexican specialties at her modest cash-only restaurant. For just as long, she deposited the earnings at a small bank branch a block away — until last year, when two tax agents knocked on her door and informed her that they had seized her checking account, almost $33,000.

The Internal Revenue Service agents did not accuse Ms. Hinders of money laundering or cheating on her taxes — in fact, she has not been charged with any crime. 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.

The person whose money has been seized isn’t necessarily guilty of anything. Hinders hasn’t been arrested, nor does there appear to be any sort of ongoing investigation. The IRS hasn’t hit Hinders with tax liens for unpaid taxes or subjected her to an audit. All it did was look at records for her deposits and decide that because none of them surpassed the $10,000 mark (which triggers automatic reporting), everything in the account must be somehow illegal.

Here’s the brain-bleeding explanation of IRS’s civil forfeiture program.

Civil forfeiture is an in rem proceeding against the property itself, not the owner of property. Civil forfeiture is a process that is separated from, and not dependent on, a criminal prosecution. Civil forfeiture can proceed administratively or judicially.

Hinders never needs to be charged. In fact, she never needs to be heard from again. The IRS can seize and hold this money indefinitely and decide whether or not the $33,000 is “guilty” without any input from Hinders. To opportunistic agents, any sub-$10,000 deposit is “evidence” that the depositer is deliberately avoiding reporting requirements, rather doing so for any number of more mundane, less criminal reasons.

Take this IRS seizure from last year, for example.

Since he bought it in 1978, Terry Dehko has owned Schott’s Supermarket in Fraser, Michigan. His daughter, Sandy, began working at the store when she was 12 and now helps her father run it. The IRS has not argued before a court of law that Terry and Sandy have committed a crime, but that has not stopped it from seizing their entire bank account, worth over $35,000. The IRS claims that Terry and Sandy violated federal anti-money laundering laws by making regular deposits of cash in amounts less than $10,000.

But the IRS has offered no evidence that money laundering has occurred. In fact, it has done nothing more than seize Dehko’s money. The explanation for Dehko’s deposit patterns make perfect sense, but perfect sense won’t fund further IRS activity.

Their insurance policy, aimed at small businesses like their grocery store, protects them from theft, but only up to $10,000. Since any dollar over 10,000 left in the store is liable to uninsurable theft, Terry and Sandy make sure their revenues are deposited in their bank account before accumulating above $10,000.

Anyone nailed by an IRS seizure can fight for the return of their money, but there’s nothing resembling due process here. Those choosing to do so would have to file a lawsuit intervening in the IRS’s forfeiture case. In other words, the situation must be forced. Simply showing up and defending money from accusations of wrongdoing isn’t enough. In fact, it isn’t even a possibility, at least not in this case. Prosecutors for the Dehko case offered the them a “deal:” an implicit admission of guilt via a plea bargain (presumably on behalf of the guilty money) and the return of 20% of the seized funds.

There are more stories like this. A dairy had $70,000 seized by the IRS after a string of deposits following the sale of farm equipment raised bank eyebrows. Again, prosecutors offered a pennies-on-the-dollar settlement to the couple whose assets were taken. A 27-year-old vending business, heavily reliant on cash flow, had nearly $450,000 seized. Again, “structuring” of deposits was the excuse used to justify the government’s theft of earned income. The IRS civil forfeiture system is every bit as crooked as the one being abused by law enforcement agencies. Perverted incentives have demolished restraint and fairness and turned it into an extremely efficient way to stockpile cash.

According to the Institute for Justice, the Department of Justice’s Asset Forfeiture Fund held $93.7 million of seized assets in 1986. In 2008, that fund was greater than $1 billion…

Fortunately for the Dehkos, they won their battle against the government and had the seized funds returned. The IRS was ordered to produce proof of wrongdoing or release the funds. It chose the latter and was additionally held responsible for $71,500 in attorneys’ fees. Dropping the case also allowed the IRS to walk away from the debacle without further legal examination of its civil asset seizure policies. So, while the Dehkos obtained a win, the IRS ultimately learned nothing from the experience. The fact that the average forfeiture battle racks up over $20,000 in legal fees means that more often than not, the IRS will get to keep nearly everything it seizes.

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Comments on “IRS Also More Than Willing To Steal Money Under The Pretense Of Crime Fighting”

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tqk (profile) says:

Re: Re:

Can we use civil forfeiture (since it’s a civil action) to seize, say, IRS assets?

Someone should suggest this to the Institute for Justice. Seize the IRS agent’s house, car, bank account, as they’re obviously proceeds of criminality. They can have 60% of the value returned if they win their intercession court case, the other 40% goes to their victims and to pay the lawyers.

Quiet Lurcker says:

Re: Re: Re:

I’d suggest dramatically more than that. My proposed scenario is on these lines.

IRS seizes Joe Citizen’s assets. Joe Citizen then goes into court – any court, any where – as late as five years after the fact, and demonstrates to the court that IRS seized assets in any amount. He doesn’t have to show he was found innocent, or that the seizure was unjustified. He just has to show that it happened.

The court then must order the arrest of the agent in question, who will be imprisoned for absolutely not less than 1 month for every dollar’s value of assets seized. The court must also order any sheriff’s deputy or constable to seize assets from the agent and his family, identical to those seized by the agent. Bank accounts replace bank accounts. Cars replace cars. Houses replace houses, and so on. And if there’s a problem with Joe’s credit rating, well, the hapless agent has the privilege of putting that right with whatever he has left. If there’s anything left after that, 95% goes to Joe Citizen, and the agent gets to keep 5%, with any fines, fees, interest, penalties, and the like deducted from it.

tqk (profile) says:

Re: Re: Re:

It seems to me that this issue is ripe for a class action civil rights suit.

In my experience, tax authorities believe they are above all other laws, constitutional or otherwise. It is the lifeblood of the state, the raison d’etre, yada yada, and good luck convincing anyone in authority otherwise, or that it’s not extortion. Taxes, tithes, vig, render unto Caesar, & etc. Suggest otherwise and you’re obviously a tax cheat, a libertarian, an anarchist, hate children, …

Doug says:


“Civil forfeiture is an in rem proceeding against the property itself, not the owner of property.”

We’re just one step away from granting personhood to property! Call in the Supreme Court!

Owner: “You stole my property.”
Gov’t: “No. Your property broke the law.”
Owner: “I’ll take you to court.”
Gov’t: “You don’t have standing.”

Ehud Gavron (profile) says:

It's not just about cash anymore

The difference between normal LEOs and the FBI doing it vs the IRS doing it is that the former go after “large amounts of cash”.

The IRS is actively taking money out of bank accounts and directly transferring it away.

Do you have lots of cash? The next traffic stop can fix that for you.
Did you leave it in the bank for safekeeping? The next hungry IRS agent can fix that for you.

Taking bets on which next agency gets into the racket?


art guerrilla (profile) says:

Re: Re: It's not just about cash anymore

AND just had personal experience with the banksters who are giving you the stinkeye about CHECKS over 10000, which is SUPPOSED to be totally ILLEGAL (to hassle you over non-cash), but they do it anyway because they are scumbag banksters who have gotten away WITH -literally- EVERYTHING…
dog damn i hates me some banksters…

024601 says:

Why set a limit at all if you are going to arbitrarily go after anyone who follows the rules? It’s like pulling over someone for going 55 MPH in a 60 MPH zone.

“Oh you got really close to the speed limit but didn’t go over, so we are going to assume you stayed below the limit to avoid suspicion, which is suspicious.”

Ninja (profile) says:

Re: Re:

Brings back to the suspicious if you travel alone/in a group/blend in/remain isolated etc etc. Everything is suspicious.

What’s most outrageous is that such seizures can simply ruin a business to the ground. And taking Dehko’s case it could mean the Govt would be screwing the daughter’s future by depriving her of money for her college.

This is incredibly disgusting and while the original intent of such procedures could be considered noble (depriving slippery drug dealers of their funds) it was quickly and predictably twisted and abused. But remember kids, the Govt will never abuse its surveillance capabilities, Obama swears it.

Anon says:

Hinders Broke the Law

In the NY Times article, Hinders admits she did break up some deposits to less than $10,000 – because the bank employees told her it would mean less paperwork!! A new management applied the strict letter of the law – must report any “structuring” of deposits that appear designed t circumvent the $10,000 reporting limit – which they were, and is in itself illegal.

So yes, she broke the law because it was complex, she did not know any better, and the bank she dealt with did not really understand the law at first either.

The law is simple – assets can be seized whether there is evidence of wrong-doing or not. This is the problem:

-assets can be seized civilly, rather than as part of a criminal judgement.
-assets can be seized even if legitimately earned.
-the IRS can then make “offers” to cash-strapped citizens rather than returning legally earned money. Like innocent people who take plea deals just to get out of the system, the IRS bargains from an unfair advantage since it holds all the cards and the pot.

JWW (profile) says:

Re: Hinders Broke the Law

In my opinion, unfounded silly laws that make doing lawful things one way legal and doing them another way illegal, do not deserver to stay laws.

And yes, I am for jury nullification. We have a lot of ricky tacky laws to cross people up. So many that its nearly impossible for citizens to remain lawful no matter how hard they try.

Almost Anonymous (profile) says:

Re: Re: Hinders Broke the Law

I’m going to join your partial derailment here. I too support jury nullification. However, there are a couple of major problems with the concept.

First, judges hate it. They won’t discuss it, they won’t allow it to be discussed, and in fact most judges’ instructions could be read to deny the very existence of jury nullification.

Second, it takes a pattern of nullification for a particular law to be seen as needing change. How many cases have you heard of lately that were resolved on the basis of jury nullification? None? Yeah, me too.

I guess what I’m suggesting is that jury nullification is one of the best kept secrets of judiciary, and is likely to remain that way.

DigDug says:

Re: Hinders Broke the Law

Time to start listing IRS employees names, addresses, phone numbers and social security numbers…

Then they will act responsibly or people will know how to “contact” them to get these illegal (it’s theft when you didn’t do anything wrong, and if the bank tells you to do it that way, the onus is on the bank, not the person) thefts reversed, and such that they do not happen again.

If a person has a history, say 20+ years in an industry doing daily deposits, then wth? That itself should be reason enough to not report.

Then add in that the bank told her to do it that way, then reported her when she did – makes you wonder how much that banker got back from the IRS for “reporting” what they told their customer to do.


The someones involved @ the bank and @ the IRS should be shot, repeatedly, with 12 gauge rubber bullets to their privates until they are black, blue, orange, yellow and brown, then left to their own misery.

Anonymous Coward says:

Re: Hinders Broke the Law

None of this is signs of ill intentions from Hinders as far as I am concerned. What should have come of this was that the IRS did their damned job and looked at the books to determine if it was some sort of front or illegal activity.
At the MOST they should have given her a small fine proportionate to income. Instead they choose to take all of her savings and maybe doom her to financial struggling or even bankruptcy.
This is so thuggish that it can only be compared to the way gangs operate.
How about these lowlifes go after one of the big companies that keeps money enough in tax-shelters to run the whole country for a couple of years. Nooo it’s too hard.

Anon says:

Re: Re: Hinders Broke the Law

Well, yeah. That was my original point.

Jerry Pournelle years ago discussed the term “majestus”, the (Roman) crime of paying insufficient deference to the majesty of the emperor. Basically, they could arrest you if they don’t like your attitude. This is where USA Law and Order is coming to – the laws are so many and so complex that by simply being there you are likely liable to arrest and imprisonment – which means your assets can be forfeit.

The Kings of England used to arrest the nobles (who had money) on trumped up charges to extort money for release, because (like all governments everywhere, everytime) the King was perpetually broke. Eventually, the nobles had enough, rebelled, and forced John to sign the Magna Carta.

I believe the USA is in for a political shake-up that will make “change you can believe in” look like a blip in history, a redefinition of civil rights on par with the 60’s civil rights movement.

Johnny B. Goode says:

Re: Hinders Broke the Law

Whether or not Hinders broke the law is debatable. The legislation that requires financial institutions to report “suspicious activity”, in this case what might be called structured deposits is known as the Bank Secrecy Act, or BSA(

These laws also make it illegal for FI employees to disclose any information regarding any reports made under the act to account holders. By indicating that “there is less paperwork” to the account holder, the bank employee(s) may have incurred liability for violating the BSA. They cannot claim ignorance because FI employees are required to undergo BSA compliance training annually.

Importantly, structuring deposits is not in itself illegal(at least so far as I am aware). Further more, reports made under BSA do not go to the IRS, they go to FinCEN(Financial Crimes Enforcement Network), where they become available to many different agencies. BSA reports also do not necessitate a legal response from any agency.

What this means is that a government agency, in this case the IRS, has acted on a FinCEN report, seizing the account in the process. Whether or not the IRS and the FI in question followed the correct/appropriate protocols and procedures in this instance I cannot say.

What is probably something that groups concerned with civil liberties(I personally do not consider the ACLU to be primarily interested in civil liberties, hence the vagueness) should be pursuing is a lawsuit alleging violation of the fourth amendment.

John Fenderson (profile) says:

Re: Re: Hinders Broke the Law

“By indicating that “there is less paperwork” to the account holder, the bank employee(s) may have incurred liability for violating the BSA.”

Good point.

I found that banks saying this to be weird for an entirely different reason. When I was running my own business, I would deposit checks in excess of $10,000 on a regular basis and never one did I have to do any additional paperwork for that (nor did my bank ever even look sideways at me).

But, on thinking about it, what the bank employee probably meant was that it would cause the bank employees to have to do additional paperwork. So the bank fails on two counts: arguable violating the BSA, and complaining directly to their customers that the customers are making them work harder.

ltlw0lf (profile) says:

Re: Re: So Wait

I think it only applies to cash deposits.

I believe that is correct. Payroll deposits to your account are already recorded with the IRS as part of the income tax process, but really aren’t what they are looking for. What would be interesting here is if someone was being paid under the table in values less than $10,000, depositing the money, and at the end of the year declaring the money as income (as is required by law) and paying appropriate taxes, and still running afoul of this and having their money seized.

I’ve worked for places before (a long time ago,) that paid their employees with cash, but still reported to the IRS in the form of a W-2. I don’t know of any that still pay cash, but I am sure there are a few small businesses that still do.

AJ says:

What do you want to bet that the IRS has issued “guidelines” to banks, describing “suspicious activities”. One of those suspicious activities is repeatedly depositing sums just under 10k in cash. So when the bank reports the deposits, the IRS moves in, takes the money, then points at the bank as the ones that pointed out suspicious activity, even though they did so under the IRS guidelines… sounds like organized crime lol.

Anonymous Coward says:

In rem forfeiture proceedings need to be done away with altogether. Pre-trial seizures may be OK in some cases, but property should only be forfeit once the person holding said property has been found guilty of a crime that warrants forfeiture or else has lost possession in tort proceedings.

Don’t let the government get away with theft. Write your congressman and demand that in rem proceedings be abolished!

Adam says:

Re: Re: Re: What happens when...

Really? So all businesses should just keep their cash on hand until they have $10,000? And spend extra money to hire accountants to “handle it?” In the real world, most local businesses don’t have that kind of cash on hand for weeks if not months.
And making less than $10,000 every two weeks is not something anyone should feel sorry about, considering about 95% of Americans are in this boat.

randomjoe (profile) says:

My theory

My theory is that it’s not the IRS per se, but that IRS agents have a “quota” or “goal” of so many cases to investigate or so much money to seize per month. Too few investigations or too little cash seized looks bad on their yearly review.

Investigating law-abiding citizens is easier and safer than investigating smugglers and drug-dealers.

My theory applies to other Federal agencies like the FBI and BATF.

Citizen says:

John Oliver did a long segment about this on his HBO show called “Last Week”. He gave some other pretty egregious examples, and showed a sketch with actors, including Jeff Goldblum, arresting property, including furniture and a house along with cash. He also highlighted how no trial or other recourse was available. It’s a pretty blatant abuse of power when there’s no due process afforded the victims. I’m not sure how the above example of the Dehkos case was fought, but a defense opportunity needs to be allowed for any kind of government claim to personal property.

Anonymous Coward says:

To opportunistic agents, any sub-$10,000 deposit is “evidence” that the depositer is deliberately avoiding reporting requirements, rather doing so for any number of more mundane, less criminal reasons.

Wow, so much for teaching kids about financial responsibility by having them open bank accounts. The IRS would declare them suspected criminals and steal the money they earned from mowing laws and selling lemonade.
What’s next, taking candy from babies?

Uriel-238 (profile) says:

Re: Actually, classic child jobs are fading too...

In many counties, you cannot offer a lawn mowing service, or sell food products in a public venue without considerable permits, and law enforcement has been cracking down on lemonade stands.

Babysitting is questionably safe, since leaving a child with another minor is a gray zone. Paper routes are legit, but fading fast.

ltlw0lf (profile) says:

Re: Re:

Wow, so much for teaching kids about financial responsibility by having them open bank accounts.

There was a program set up in the local schools around here about 10 years ago where students were taught to manage money by setting up bank accounts and depositing their allowance in it. They worked out a deal with a local bank to set up accounts for the students and their parents. I believe the first year, the accounts were free, but after the first year, the bank changed the rules without telling anyone and required a fee of $6/mo unless there was $3,000 in the account (like most banks charged.) Since $6/mo was quite a bit of money when allowance was concerned, most of the students ended up paying all of their earned money to the bank. Taught kids really quickly that managing their money meant not using a bank unless you could afford it, which was the wrong message those who implemented the education wanted, and it was shut down pretty quickly.

I think it taught a pretty good lesson though, that unless you take an active role in the management, you can pretty much bet that you will be screwed. It also taught that even the best intentions can be corrupted by pure greed (on the part of the bank, which valued ridiculous “subscription fees” over long-term goodwill and future customers.

Pragmatic says:

Re: Re: Re: Re:

Yeah, because the market…

Use credit unions instead.

Sneaky banking practices abound, there’s little in the way of choice, and the banksters are pushing for deregulation AGAIN in a trade agreement called TISA.

Deregulation means we can’t hold them to account because the rules have been abolished, which means they can keep on moving the goalposts without bothering to tell you. Shopping around for the least worst bank becomes your best option. Is that what you want?

I’m in favor of enough regulation to keep them in line so that:

all their policies are clearly stated
they are required by law to provide notice in advance of any changes to their TOS
there is a clear and simple process for redress if an error is made
the status of any and all transactions is made available at once in clear, unambiguous language
no charges may be made without prior notice
no zombie mortgages; if they foreclose, the property is their responsibility, not yours

But deregulation is awesome, right?

As are monopolies, cartels, etc…

The current situation with the banks can not be solved by shopping around.

Uriel-238 (profile) says:

One positive that may emerge from this...

…is the notion that your bank deposits are private and records should require a warrant or a court order to be disclosed to a government agency.

We’ve tolerated disclosure of deposits more than $10K for some time now, based on the bank’s third-party access and cooperation. But we are presently seeing the consequences of such a dragnet surveillance policy in action: perversion of the original purpose, with substantial, quantifiable damage.

A bank’s service, storage of capital for safekeeping, is akin to a private vault, or even a cloud data service such as DropBox. There is no reason under the US Constitution that the government should have free access to deposit records.

If our agencies keep going, they may end up showing that even warrants and court-orders themselves are too much power for a judicial body to have.

Again, not that any such changes will occur before there is either massive reform or open and bloody revolution.

Johnny B. Goode says:

Re: One positive that may emerge from this...

Interestingly, in most financial institutions law enforcement agencies do not have free reign of information. The extreme majority of FIs require a warrant prior to releasing any information(and, iirc, FIs are encouraged to adopt such policies, although I cannot remember by which entities).

What the SAR(suspicious activity report) includes can vary greatly, but in most cases this should mean that a follow up investigation on a SAR include warrants for additional records.

Anonymous Coward says:

No damages?

“The IRS was ordered to produce proof of wrongdoing or release the funds. It chose the latter and was additionally held responsible for $71,500 in attorneys’ fees.”

And that’s all? They just got the same value back, without any extra?

In my country, they would have to pay it back with interest and inflation adjustment, plus the economic loss caused to their business, plus moral damage for the emotional distress!

Uriel-238 (profile) says:

Isn't our entire banking industry based on trust?

Our banking system lives and dies on the faith the people have that their money will be there when they need it, hence the FDIC guarantee (up to $1 million) that it’s insured from robbery.

But if other institutions such as the DoJ and the IRS can arbitrarily seize stowed monies, and now have a record of doing so, couldn’t news of this sort of thing disrupt belief in the banking system and cause a mass collapse when people start taking their money out?

The mattress is looking pretty good as an alternative. Swiss bank accounts (or whatever the equivalent) is looking good for those who have the means to do so.

This era is reminding us that all national institutions are based on organized crime, and will turn criminal once the opportunity presents itself. Even the Sicilian Mafia started as a counter-institutional organization.

velox (profile) says:

This is a Congress problem more than an IRS problem.

Congress created asset forfeiture law, and Congress has proceeded to make it worse time after time. Members of Congress need to be held responsible – individually, and by name.

The IRS lost a forfeiture case at the Supreme Court in 1994 (Ratzlaf v. US) when a defendant was able to successfully make the case that he hadn’t known he was “structuring” deposits in a way that could be considered illegal. The execrable federal prosecutors then complained to Congress who shamefully obliged them and changed to law to remove the requirement that the offence be “willful”.
I haven’t done the research to see exactly which members of Congress sponsored that legislation, but this information should be sought, and they should be exposed as being responsible for this nonsense. Any time legislators seek to remove Mens Rea (intent) from the law, they are weakening respect for the law, because eventually such a law will be unjustly abused by regulators, law enforcement and prosecutors.
See the discussion of the IRS and Ratzlaf v. US at the Volokh Conspiracy.

Freedman Slave says:

So fucked

Gud bye US. You have officialy turned into another corrupt-to-the-core bananna republic, without the banannas. Get on a plane, don’t get on a plane, travel alone, travel w/ sumbody, deposit more than X, less than X. They’re all grounds for fucking the people over. Every single fucking thing you can do is wrong, bad, suspicious, terroristy as long as one of the corrupt tentacles of the fetid octupus which was formerly known as the US gmint says it is. They just make shit up as they go and very few even put on the facade of a just society any more, with rule of law and all that quaint shit. Now it,s shut your hole citizen, we don’t need no stinking constitution, no due process, none of that yuck material.

Eric James says:

What about the bankers and the War on Drugs?

Bankers launder an unbelievable amount of money; literally truck loads of $1, $5, $10 and $20 dollar bills everyday in every city in the US. Yet the IRS goes after Mom and Pop stores looking for small change under the mattress and hidden behind coach cushions.

This is disgusting!!! Once again I am forced to ask “What the F is wrong with this country?”

broken pencil says:

Broke the law

so NSA and other government agencies tell you that there is nothing to worry about what they gather about you if you are doing nothing wrong because they are only trying to catch criminals and terrorists. Then, they find out that everyone is a criminal or terrorist because … Why do we even bother trying to make sense with these self-serving, citizen breaking wunderkinds?

Anonymous Coward says:

Have they considered what could happen when you take away (“liberates”) someone’s funds, ruin their business and essentially treat them like a criminal without due process? The result could possibly be an individual and/or family with basically nothing left to lose with a newfound revenge or loathing.

Probably an extreme case, but that doesn’t appear to be a smart move

Anonymous Coward says:

bullies by design, cowards by choice

How odd it is that financial “structuring” can be considered a serious crime by the IRS when practiced by ordinary little people who gain no benefit from it, yet perfectly OK when practiced by a corporation’s tax department that employs a myriad of structuring strategies to avoid paying millions or billions of dollars in taxes.

But it makes perfect sense, that rather than trying to rein-in loophole exploiting corporations who are sure to put up a massive, expensive and lengthly court fight, the IRS knows that picking the pockets of people who can’t afford to fight them in court — or know it would be more expensive to fight than to simply walk away and swallow the loss — makes much better business sense.

And it’s only natural that IRS agents would rather take the easy route and add a few more small notches on their belt, than spend all their time and energy “fighting the good fight” and probably losing in the end.

The one notable exception to the “too big to jail” rule was Megaupload and Kim Dotcom, who had the required millions to mount a decent defense, but his targeting by the Feds was only because much bigger and more-connected corporations wanted him and his company dead.

Andrew D. Todd (user link) says:

Cash Businesses Don't Pay the Mordida

I found an article reporting that Schott’s Supermarket in Fraser, MI, owned by Tarriq (“Terry”) Dehko, having gotten its money back, had hired an armored-car company to insure that the problem did not reoccur. I don’t have exact financial information for the store, but I understand it has thirty or so employees. This means that its annual payroll would be somewhere in the ballpark of half a million to a million dollars, and its annual turnover might be five or ten million dollars.
MITCH HOTTS, “COUNTY: Macomb business owners’ suit against IRS thrown out,” Advisor & Source Newspapers, Macomb County, Michigan , Thursday, June 19, 2014

There is an element of “protection money” in this, of course, in the sense that armored-car companies create employment for ex-cops, and charge their customers a percentage of the money collected. However, it also provides more financial controls. The store owner might stick $500 in an envelope every few minutes, and stick it in the slot of the drop-safe, which automatically time-stamps the envelope. The armored-car company institutes whatever controls are necessary to keep the IRS happy, which may ultimately work out to taking over the cash registers and running them. At any rate, armored car service is often more expensive than credit-card processing, perhaps 3-5%. A small businessman might try to evade the unofficial “tax” by having employees carry money to the bank, even when his receipts were getting up to the five-or-ten-million a year region. The real issue is probably the amount per month or per year, not the amount transfered at any one time. If the IRS begins losing too many of these kinds of cases, the law will simply be amended to specify total monthly or annual sums.

Andrew D. Todd (user link) says:

Re: Cash Businesses Don't Pay the Mordida

I was reading an old tourist guidebook to the Soviet Union, circa 1970. This book describes the procedure for buying something at the GUM department store in Moscow. The salesgirl in a particular department would gather up what you wanted, put it behind the counter, and write up a sales slip. You would then take the sales slip to the cashier’s office, pay, get a reciept, take the reciept back to the merchandise department, and collect your merchandise. This system was designed, of course, to prevent the salesgirls from actually getting their paws on money. Similarly, tourists were expected to buy meal coupons, in advance, for the duration of their stay. One could imagine the IRS adopting the same kind of “soviet socialist” procedures.

Pragmatic says:

Holy Fourth Amendment, Batman, isn’t this unconstitutional?!

Amendment IV

The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

Nick says:

the use of cash

They need to discourage the use of cash. They want total control and knowledge of where your money comes from and where your money goes. The next crash will usher in a cashless society. They have been working on this a long time. I think it is a major mistake to use your debit and charge cards only. Take out cash you need for the week or apply for fast payday loans and use it. It will help you stay on a budget and save the places you spend money at from incurring bank fees. You hate the state and banks? Use cash.

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