Where is the Justice?

May 26, 2016
Press Release

Washington, D.C. — Yesterday, the Ways & Means Oversight Subcommittee held a hearing on Protecting Small Businesses From IRS Abuse. Both Republicans and Democrats expressed outrage over the Internal Revenue Service (IRS) and Department of Justice (DOJ)’s actions to seize the bank accounts of law-abiding American citizens.

Chairman Peter J. Roskam released the following statement:

“I hope the Department of Justice finally gets it this time. The shameful practice of shaking down small business owners for cash without any suspicion of criminal activity is an affront to the ‘justice’ for which the department is named. They claim to have changed their policies. So why won’t they return the money they’ve seized from innocent people like Calvin Taylor and Randy Sowers?”

“At a time when Republicans and Democrats can hardly agree on anything, the DOJ has managed to unite my entire subcommittee – against the Justice Department. As my colleague, our Ranking Member John Lewis, said during the hearing, on this issue we are on one accord. He’s absolutely right and we will continue to speak with one loud voice to hold the justice system accountable for delivering justice.”

Watch Chairman Roskam’s opening statement here and read the remarks here.

What they’re saying:

Melissa Quinn, The Daily Signal:

“You’ve brought a subcommittee together that can’t agree on what time of day it is. We can’t agree on the Affordable Care Act. We can’t agree on the Iran sanctions deal. We cannot agree on tort reform and tax reform and entitlement reform,” Roskam said of the IRS and Justice Department. “But we are all together in thinking [the IRS and Justice Department] are the problem and [the small business owners are] the good guys.”

Naomi Jagoda, The Hill:

Lawmakers on both sides of the aisle blasted the Internal Revenue Service and Department of Justice on Wednesday for failing to return small-business owners’ wrongly seized assets and for not being clear about when the funds would be remitted.

The top Democrat on the subcommittee, Rep. John Lewis of Georgia, agreed that this is a topic on which Democrats and Republicans are strongly united.

"On this issue, we are on one accord," he said.

Katy O’Donnell, Politico:

House tax writers trained their sights on the IRS this morning - but this time, it's bipartisan.

Republicans and Democrats heaped fury on the tax agency and DOJ for civil asset forfeiture abuse, after hearing from two farmers whose money was seized by the government because of structuring rules on cash deposits.

Ali Meyer, Washington Free Beacon:

Rep. Peter Roskam (R., Ill.), chair of the Ways and Means Committee, brought up the example of Andrew Clyde, a business owner in Georgia, as another victim of structuring laws. Clyde had insurance policies that only protected cash on hand up to $10,000.

“Every time he got close to $10,000, he would deposit his money,” Roskam explained. “Because the IRS thought that looked suspicious they seized the entire bank account—$900,000.”

“They didn’t investigate whether Mr. Clyde was trying to avoid the reporting requirement before they took his savings,” Roskam said. “After they seized the money and he explained the insurance policy to them, the IRS didn’t give the money back.”

Nick Wing, Huffington Post:

They said this behavior was consistent with a crime known as structuring, which the IRS defines as making calculated financial transactions in order to skirt reporting requirements. The agents had no evidence of other wrongdoing, but thanks to a controversial law enforcement tool known as civil asset forfeiture, they didn’t need any to seize every penny in the Vocaturas’ bank account: $68,382.22.

Under the practice of civil forfeiture, authorities can move to permanently take property they suspect of being linked to criminal activity, without obtaining a conviction — and, in cases like the Vocaturas’, without even charging the owner with a crime. 

Michael Cohn, Accounting Today:

"The IRS knew that seizing money from farmers and store owners who appeared to be structuring their transactions wasn’t right unless they were doing it to cover up other crimes,” said subcommittee chairman Peter Roskam, R-Ill. “That’s why the IRS announced a new policy in October 2014, that it wouldn’t seize money unless it was ‘derived from an illegal source.’ That’s a better policy than what the IRS was doing before, and we were pleased to hear about the acknowledged need to do better. Now, a year and a half later, we want to know how things are going under that new policy. And, indeed, a new policy doesn’t right all wrongs. Those people whose assets were seized under the old policy were not treated fairly. Several of them have sent petitions to the IRS and DOJ asking for their money back. The IRS granted one of those petitions and gave back $154,000. From all accounts, the IRS did this because it was the right thing to do. However, DOJ has not provided any relief, either financially or procedurally, to those who have petitioned for return of their funds. Those petitioners deserve a fair, transparent review process and an answer.”