Over the last several years, the IRS has seized money from a number of Americans based on alleged violations of anti-structuring laws. However, following several complaints and a recent change of policy on certain structuring cases, the IRS has established a special procedure for a particular group of property owners to request a return of their confiscated funds and/or property.
Structuring involves bundling a large financial transaction into several smaller transactions in an effort to avoid inquiry from banks or law enforcement. Typically, each of the smaller transactions is completed in an amount below statutory limits, so the financial institution is not required to document the transaction with a report to a government agency, such as the IRS. For this reason, structuring is usually associated with serious criminal acts such as money laundering, drug trafficking, and fraud.
In the United States, the Bank Secrecy Act requires the filing of a currency transaction report (CTR) for financial transactions amounting to more than $10,000. Additionally, financial institutions that suspect deposit structuring with intent to avoid this law are required to file a suspicious activity report. As an experienced tax attorney in San Mateo County, I completely understand that many San Francisco Bay Area taxpayers, who may be affected by this policy are completely unaware of its existence until the IRS seizes their assets.
The newly developed IRS procedure for requesting the return of seized funds only applies to Americans whose property was surrendered because they were involved in “legal source” structuring. The October 2014 policy change also means that the IRS would no longer continue to pursue funds associated solely with “legal source” structuring, outside of exceptional circumstances. Of course, this procedure does not apply to funds involving “illegal source” violations, especially cases that are indicative of serious crimes.
Property owners with assets that were forfeited prior to the change in the IRS policy should expect a letter from the government agency sometime this month. These individuals must qualify for a return of property by proving that the detained funds came from a legal source and they did not engage in structuring to conceal any sort of criminal activity.
In regards to the new procedures, IRS Commissioner John Koskinen addressed the House Ways and Means Committee and stated, “We understand we have a duty not only to uphold the law, but to protect the rights of individuals as well.” Indeed, this new process comes as a saving grace to many petitioners, especially small business owners, who otherwise would have no hope of their property being returned to them without hiring a tax attorney.
The IRS is considering certain cases dating back to Oct. 1, 2009, and if property owners are in this category and do not receive a letter, they should contact the IRS immediately to get more information on their specific case.
If you need assistance in dealing with the IRS, Tax Helpers can offer a free consultation with a tax attorney in San Mateo County, San Jose, or anywhere across the Bay Area. Let us provide you with the personalized representation you need to resolve your tax problems! Contact us today!