On behalf of Silver Tax Group posted in IRS Tax Audits on Thursday, September 14, 2017.
There have been a large number of complaints from farmers and business owners facing unjust IRS prosecution. Such complaints involve the IRS accusing farmers and small business owners of making transactions under $10,000 to avoid the Bank Secrecy Act rules.
In response to such complaints, the U.S. House of Representatives recently passed the Clyde-Hirsch-Sowers RESPECT Act. This bill’s aim is to curb the power of the IRS to seize personal property. If this bill was to become law, it would prevent the IRS from using civil asset forfeitures to seize property from taxpayers.
Congress named the Clyde-Hirsch-Sowers RESPECT Act after businessmen deprived by the IRS of over $400,000 in assets. Despite such deprivation, these individuals never faced criminal charges.
Unfortunately, there are many additional cases involving similar circumstances. Between 2005 and 2012, one study estimates the IRS used restructuring allegations to seize $242 million. Yet according to this study, approximately one-third of such cases involved no wrongdoing by the taxpayer.
Additional bills are in the work that would prevent seizure of money and property when there is no filing of criminal charges. Under such bills, there would be a prohibition of “equitable sharing” of seized assets involving state and federal law enforcement agencies.
The impact of tax reform
Such tax reform measures are of great interest to Michigan taxpayers. Yet where such measures will lead is impossible to predict. The two major political parties never seem able to agree upon the details. Also, each new administration has its own approach to the problem.
Because of this, questions regarding tax planning and current tax laws often require the input of experienced legal counsel.