Senators Eye Asset Forfeiture Reform

Media focus builds pressure to limit seizures by feds

October 29, 2014

Several U.S. senators are considering reforms to federal civil asset forfeiture laws—which allow the government to seize citizens’ property even if they are not convicted or charged with a crime—following several high-profile investigations by news outlets.

On Sunday, the New York Times published a front-page investigation of several cases in which the IRS seized the checking accounts of small business owners, such as Carol Hinders, who runs a small Mexican restaurant in Arnolds Park, Iowa.

"The Internal Revenue Service agents did not accuse Ms. Hinders of money laundering or cheating on her taxes—in fact, she has not been charged with any crime," the Times reported. "Instead, the money was seized solely because she had deposited less than $10,000 at a time, which they viewed as an attempt to avoid triggering a required government report.

The IRS said it is curtailing the practice, but the report has piqued the interest of members of Congress such as Sen. Chuck Grassley (R., Iowa).

A spokeswoman for Grassley said the senator is looking into the government’s use of civil forfeiture laws and has sent a letter to the IRS asking for more information on its program.

"The IRS plays a role in fighting money laundering and other criminal activity, but it has to treat business owners fairly," Grassley said in a statement released after the Times article was published. "If the pendulum has swung too far in favor of the government and against fairness for innocent people, then it’s time to reform civil asset forfeiture laws and procedures. "

In a column published at Breitbart Tuesday, Sen. Rand Paul (R., Ky.) wrote that the government "should never be able to take property from innocent Americans. That is a blatant violation of our Fifth Amendment rights."

In July, Paul introduced the FAIR Act, a bill that would require higher standards of evidence for the government to forfeit seized property.

"The federal government has made it far too easy for government agencies to take and profit from the property of those who have not been convicted of a crime," Paul wrote. "The FAIR Act will ensure that government agencies no longer profit from taking the property of U.S. citizens without due process, while maintaining the ability of courts to order the surrender of proceeds of crime."

IRS seizures have increased from 114 in 2005 to 639 in 2012, according to data from the Institute for Justice, a non-profit law firm that has filed a lawsuit challenging the IRS’ seizure program.

The Institute for Justice study says the IRS seized $242,627 in "structuring" cases similar to Hinders during that same time period. Of those cases, only one in five were prosecuted.

Earlier this summer, the Washington Post ran an investigative series on how police across the country seized hundreds of millions of dollars from motorists who were never charged with a crime.

The Washington Free Beacon also reported from Philadelphia, home of one of the most aggressive civil forfeiture programs in the country.

The Institute for Justice is also suing Philadelphia to halt its forfeiture program.