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Regulation and Compliance > Federal Regulation > IRS

House Passes Bill to Rein In IRS, DOJ Asset Forfeitures

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The House passed by voice vote Tuesday the Clyde-Hirsch-Sowers-RESPECT Act, legislation to rein in IRS civil asset forfeiture abuse in structuring cases, which involved the IRS and Department of Justice seizing the bank accounts of law-abiding American citizens.

The bill, introduced by Reps. Peter J. Roskam, R-Ill. Chairman of the Ways & Means Subcommittee on Oversight, and Joseph Crowley, D-N.Y., is named for Andrew Clyde; Jeffrey, Richard and Mitch Hirsch; and Randy Sowers — small-business owners whose assets were seized by the IRS.

“Today we took a big step toward delivering justice for victims of IRS abuse,” said Roskam in a statement after the bill’s passage. “It’s clear to everyone involved that the IRS and DOJ abused their authority and took money from people who did nothing wrong. With today’s legislation, we’re making sure they can never do it again.”

Crowley added in the statement that “civil asset forfeiture started as a tool to combat criminal activity but it has morphed into a complex process that can unfairly entangle innocent Americans. There is no question the process is flawed and in need of reform. That’s why I’m proud to partner with Congressman Roskam to pass this critical legislation.”

Sens. Tim Scott, R-SC, and Sherrod Brown, D-Ohio, have introduced companion legislation.

The Ways & Means Oversight Subcommittee held a hearing last May titled Protecting Small Businesses from IRS Abuse, at which time both Republicans and Democrats expressed outrage over the practice.

Last June, under pressure from Congress, the IRS agreed to send letters to everyone from whom it had seized assets based on allegations of “structuring” cash deposits to avoid triggering reporting requirements, which is often done to hide money laundering or fraud.

“These people, who had done nothing wrong, can finally get some or all of their money back,” Roskam said in the statement.

The bill tightens the circumstances under which the IRS can seize property and requires it to notify the property owners of their right to a hearing.

Sowers, a Maryland dairy farmer who testified at the May 2016 hearing, finally got his money back in July as a result of the Subcommittee’s work.

House Ways and Means Chairman Kevin Brady, R-Texas, said in a Tuesday statement after the House unanimously passed the bill, H.R. 1843, that the House “sent a clear signal to the IRS this week that bullying law-abiding Americans will not be tolerated. After years of bipartisan oversight to hold the IRS accountable for their wrongdoings, the Clyde-Hirsch-Sowers-RESPECT Act stands up for the innocent small-business owners and farmers who were forced to hand over their hard-earned dollars to the IRS – in some cases losing their livelihoods and life savings.”

The bill, he added, “puts in place strong safeguards to prevent the IRS from wrongfully seizing the assets of hardworking Americans.”

Brady then urged the Senate to pass the “important legislation.”


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