IRS Returns Money It Stole

A year after the IRS seized their bank account, Terry Dehko and his daughter have gotten their money back, thanks to a lawsuit they undertook with the help of the valiant Institute for Justice.

The IRS had looked at how the Dehkoses deposited revenues from their Fraser, Michigan store and decided, without further inquiry, that they were illegally “structuring” the deposits so that their bank would not have to submit currency transaction reports.

The reporting threshold is $10,000; most of the Dehkoses’ deposits were indeed less than $10,000. However, $10,000 is also the maximum loss that their insurance policy would cover in the event of theft! How hard would it have been to simply ask the reason for the deposit pattern?

Nor did the folks at the IRS ever show evidence of tax evasion or other illegality.

The Dehkoses have their money back. But they’ve lost a year. And lost any profits they might have earned by investing those unavailable funds, as well as any profits they might have earned by spending the time on their business that they instead spent trying to get their money back. Of course, the IRS will not be required to compensate the Dehkos for either psychic pain or lost opportunities.

There’s plenty more wrong with the agency’s conduct than is suggested by this case. At the least, though, it should be illegal to seize bank balances absent any showing of wrongdoing. And IRS officers who perpetrate such arbitrary seizures should be punished.

This is Common Sense. I’m Paul Jacob.