A bipartisan bill that would require the IRS to provide evidence of illegal activity before seizing assets has passed the U.S. House of Representatives Ways and Means Committee. Hundreds of taxpayers who have had assets seized between October 2009 and October 2014, when IRS seizure and forfeiture activity in the absence of criminal evidence ceased, will be notified that they are eligible to seek refunds.
The intention of the seizure and forfeiture practice was to ensnare criminals who were making deposits of less than $10,000 at a time to escape bank reporting requirements. But the IRS did not have to prove criminal activity before seizing assets. This led to the IRS freezing bank accounts and taking the property of non-criminal small business owners whose only (non) crime was making habitual bank deposits of less than $10,000.