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Author Topic: Depositing increments below $10,000, really isn't that legal?  (Read 1731 times)

Offline Solar

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Depositing increments below $10,000, really isn't that legal?
« on: February 10, 2015, 06:52:27 PM »
This is really going to piss you off. :glare:

US Charges Iowa Widow Over How She Deposited Husband's Cash
IOWA CITY, Iowa — Feb 10, 2015, 2:07 PM ET
By RYAN J. FOLEY Associated Press
Associated Press
An Iowa widow is charged with a crime and had nearly $19,000 seized from her bank after depositing her late husband's legally earned money in a way that evaded federal reporting requirements.

Janet Malone, 68, of Dubuque, is facing civil and criminal proceedings under a law intended to help investigators track large sums of cash tied to criminal activity such as drug trafficking and terrorism. But some members of Congress and libertarian groups have complained that the IRS and federal prosecutors are unfairly using it against ordinary people who deposit lawfully obtained money in increments below $10,000.

At issue is a law requiring banks to report deposits of more than $10,000 cash to the federal government. Anyone who breaks deposits into increments below that level to avoid the requirement is committing a crime known as "structuring" — whether their money is legal or not.

The IRS has increasingly used civil forfeiture proceedings to seize money from individuals and small businesses suspected of structuring violations, according to a review by the Institute for Justice, a libertarian group. The agency seized $242 million in 2,500 cases from 2005 to 2012 — a third of which arose from nothing more than cash transactions under $10,000. Nearly half was returned after owners challenged the action, often a year later.

Some of the depositors had broken up the deposits to save their bankers from having to submit paperwork or because they mistakenly believed it was a way to avoid unwarranted government scrutiny. The Treasury Department receives millions of reports every year, and deposits above the $10,000 threshold incur no additional fees or taxes.

Facing criticism of the practice, the IRS announced in October that investigators would no longer seize funds in cases involving legal sources of money "unless there are exceptional circumstances" and would focus on illegal sources. A U.S. House subcommittee is expected to hear testimony about the practice Wednesday, at a hearing called, "Protecting Small Businesses from IRS Abuse."

Larry Salzman, an attorney with the Institute for Justice, criticized the government's case against Malone given its declared shift in practice.

"This is shocking because it demonstrates that prosecutors are not taking seriously the IRS' alleged policy change not to prosecute legal source structuring," he said.

After the policy change, federal prosecutors in Iowa agreed to return money the IRS seized from two people accused of structuring, including a restaurant owner who had $33,000 taken and a doctor who fought to get back $344,000 in earnings from his medical practice. But prosecutors declined to drop the civil forfeiture case over $18,775 the IRS seized from Malone.

Instead, they added a misdemeanor criminal charge last week alleging she willfully violated the law, after her husband had been warned about the practice four years ago. Malone is expected to plead guilty next week and let the government keep the money, under a plea agreement filed Monday. The charge carries up to one year in jail and a $250,000 fine.

IRS agent Jeff McGuire first went to Malone's home in 2011 to investigate alleged structuring by Ronald Malone, who was dying of cancer, records show. Ronald Malone admitted that bank deposits totaling $35,500 he'd made could appear to be structured and signed a form acknowledging he'd been warned about the law; no charges were filed. Janet Malone was present for part of the meeting.

http://abcnews.go.com/US/wireStory/us-charges-iowa-widow-deposited-husbands-cash-28866427
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Offline Solar

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Re: Depositing increments below $10,000, really isn't that legal?
« Reply #1 on: February 11, 2015, 06:38:24 AM »
Am I the only one here that sees a problem with this?
Think about it. Here's a woman of moderate means depositing money in her account legally, and suddenly she gets a visit from the Fed telling her she's in violation of a law she did not break, then coerced under duress to sign an agreement?

Add insult to injury? Over a few years she deposits 30K, not a big amount if someone is pinching pennies on a moderate income, but once again the IRS pays her a visit?
Who tipped them off in the first place, and why is it illegal to break an imaginary law?

Every time I make a deposit, it's under $10 grand simply because I don't think it's my banks business to alert the govt to my account activity. Screw them!
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Offline TboneAgain

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Re: Depositing increments below $10,000, really isn't that legal?
« Reply #2 on: February 11, 2015, 08:36:16 AM »
Am I the only one here that sees a problem with this?
Think about it. Here's a woman of moderate means depositing money in her account legally, and suddenly she gets a visit from the Fed telling her she's in violation of a law she did not break, then coerced under duress to sign an agreement?

Add insult to injury? Over a few years she deposits 30K, not a big amount if someone is pinching pennies on a moderate income, but once again the IRS pays her a visit?
Who tipped them off in the first place, and why is it illegal to break an imaginary law?

Every time I make a deposit, it's under $10 grand simply because I don't think it's my banks business to alert the govt to my account activity. Screw them!
Well, I think it's pretty obvious, based on the story you linked to -- the banks tell the IRS about every damn thing, not just deposits they're required to report.  They are specifically required to watch for activity like the woman engaged in, which was, after all, geared toward avoiding the reporting requirement.

What I think is bullshit is that, even after the woman was shown to be in possession of the money legally, she will be stripped of it anyway because she attempted to get around the reporting requirement. That's the difference between enforcing a law to do a good thing -- control the movement of drug money, the actual purpose of the law -- and enforcing the law as a way of generating income for the cash-strapped IRS.
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people. -- Tenth Amendment to the US Constitution

Government is not reason; it is not eloquent; IT IS FORCE. -- George Washington

Offline Solar

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Re: Depositing increments below $10,000, really isn't that legal?
« Reply #3 on: February 12, 2015, 09:05:06 AM »
Well, I think it's pretty obvious, based on the story you linked to -- the banks tell the IRS about every damn thing, not just deposits they're required to report.  They are specifically required to watch for activity like the woman engaged in, which was, after all, geared toward avoiding the reporting requirement.

What I think is bullshit is that, even after the woman was shown to be in possession of the money legally, she will be stripped of it anyway because she attempted to get around the reporting requirement. That's the difference between enforcing a law to do a good thing -- control the movement of drug money, the actual purpose of the law -- and enforcing the law as a way of generating income for the cash-strapped IRS.
Exactly! The law was designed for investigative purposes, not to confiscate.

OOPS!!!  Busted!
They got caught breaking the law.

WASHINGTON (AP) — Pressured by Congress, the IRS said Wednesday it is changing its policies and apologizing for seizing banks accounts from otherwise law-abiding business owners simply because they structured bank transactions to avoid federal reporting requirements.
Their alleged crime: routinely making bank deposits of less than $10,000. That allowed the business owners to avoid reporting requirements designed to catch drug dealers and money launderers.
IRS Commissioner John Koskinen told Congress that the IRS is changing policies to prevent the seizures, as long as the money came from legal means.
"To anyone who is not treated fairly under the code, I apologize," Koskinen told the House Ways and Means oversight subcommittee. "Taxpayers have to be comfortable that they will be treated fairly."
http://apnews.myway.com/article/20150211/us--irs-seizing_assets-69feacb68c.html
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Offline taxed

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Re: Depositing increments below $10,000, really isn't that legal?
« Reply #4 on: March 16, 2015, 04:21:04 PM »
Yeah, this is f*n insane.  The IRS needs to be abolished and just leave us alone.

 

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