Putting aside the moral outrage at what the IRS has done, has the IRS transgressed the bounds of the law?

IRS Seizure of Assets Using Anti-Structuring Laws

The New York Times recently reported about a series of cases in which the IRS has seized money from innocent Americans based on purported violations of so-called “anti-structuring” laws, which make it a crime to deposit less than $10,000 cash in the bank in order to evade bank reporting requirements. It seems if the prosecutors can’t find the intended targets of legislation, they see no ethical problem with going after everyone else.
Substantively, the IRS has pursued these cases despite the fact that Carole Hinders and the Hirsch brothers do not have the intent required by the anti-structuring laws. And, procedurally, the IRS has pursued these cases in a manner that violates both constitutional principles of due process and the governing provisions of the Civil Asset Forfeiture Reform Act of 2000.
The IRS in these cases appears to have proceeded on the assumption that there is probable cause to believe that individuals have engaged in structuring wherever a bank statement shows a pattern of deposits under $10,000.
The structuring laws, however, do not authorize the IRS to seize money based on a mere pattern of sub-$10,000 deposits.There is no federal law that prohibits depositing cash in an amount under $10,000; the governing federal statutes are more nuanced. Banks are required to report all currency transactions over $10,000. 31 U.S.C. § 5313(a). And the anti-structuring law makes it a crime for an individual to deposit less than $10,000 with the “purpose of evading the reporting requirements” imposed on the bank. Id. at § 5324(a). Under the anti-structuring laws, liability cannot be premised on the mere observation that someone has consistently deposited less than $10,000 cash. The “purpose” behind that pattern of deposits must be to evade bank reporting requirements. 


The IRS should not simply assume that every case that looks like it might involve structuring actually does involve structuring. The IRS should conduct a serious investigation to determine the reason behind a pattern of deposits, and should do so before it swoops in and takes a business’s entire bank account. Too often, the IRS has not taken that basic step.
http://www.procedurallytaxing.com/irs-seizure-of-assets-using-anti-structuring-laws/