IRS Shuts Down Another High-Profile Asset Forfeiture Case, Gives $447,000 Back To Its Rightful Owners

Failures

from the sadly,-no-interest-will-be-collected-on-this-two-year-'loan' dept

Thanks to our nation’s tax laws and liberal asset forfeiture programs, the IRS can seize funds from a bank account if it believes the account holder is attempting to bypass income reporting requirements by making deposits under the arbitrary $10,000 cutoff. The IRS doesn’t need to obtain evidence of wrongdoing or even ever press charges against the account holders. It just takes the money, and it’s up to those whose accounts have been emptied to prove that they weren’t “structuring” their deposits.

Recently, it dismissed a structuring case against Carole Hinder, who had run her small, cash-only restaurant for nearly 40 years without incident before the IRS decided she was hiding money from it. It seized nearly $33,000, but seemed to reconsider its position after her case was covered by national press outlets like the New York Times.

The same seems to have happened here. Many of the reports on asset forfeiture also detailed the plight of the Hirsch family, whose convenience store distribution company’s account attracted IRS attention for the same reason. Asset forfeiture went into play and the IRS walked off with nearly a half-million of Bi-County Distribution’s money. Over two years later, the case is suddenly being dropped and the money returned to its rightful owners.

The government acknowledged in its agreement to return the money that the Hirsch brothers, who operate Bi-County, were never charged with any crime. In fact, all of the money deposited by the Hirsches was lawfully earned from their small business, according to the Institute for Justice, a libertarian law firm in Arlington, Va., that represented the Hirsches.

The Hirsch case was helped by the family’s retention of a forensic accountant, who prepared a report analyzing the company’s deposits and financial transactions and handed it over to federal prosecutors. However, it was not helped by the IRS’ refusal to make the next move after it seized the family’s money back in 2012.

During the two-and-a-half years that the government held the money, federal prosecutors filed no formal action in court to complete the forfeiture, which deprived the Hirsch brothers of an opportunity to contest the seizure in court.

So, media heat or not, it took a lawsuit filed by the Hirsch family to finally regain the $447,000 from the IRS. The settlement doesn’t do much for the family who spent more than two years fighting this, as the agreement stipulates each party is responsible for its own legal fees. This will hit the Hirsches harder than it hits the US government since only the former party will be paying out of its own pocket.

In the settlement agreement [pdf link], the government disingenuously dodges admitting wrongdoing and even adds in wording stating that the return of the funds does not release the family or its company from “any potential criminal liability.” This leaves room for the IRS to make another run at the Bi-County Distribution if it wishes, although I would imagine the harsh light of unwanted publicity means this will be the last we hear of this particular asset forfeiture case.

Filed Under: asset forfeiture, asset seizure, carole hinder, cash, forfeiture, irs, stealing money
Companies: bi-county distribution