If you’re looking for a firm that is capable of handling any type of criminal matter, contact Kammen & Moudy, LLC.
We have more than 50 years of experience handling a wide variety of criminal cases.

  1. Home
  2.  » 
  3. White Collar Crimes
  4.  » Is the IRS targeting innocent businesses for alleged fraud?

Is the IRS targeting innocent businesses for alleged fraud?

On Behalf of | Apr 12, 2017 | White Collar Crimes |

Hollywood dramatizations have sometimes referenced the ten thousand dollar reporting requirement that applies to banks. Such depictions often involve characters depositing illegally earned income. Yet a series of deposits just under that threshold may also draw IRS scrutiny.

Specifically, the Bank Secrecy Act allows the IRS to look for a pattern of deposits just under $10,000. The activity might be viewed as structuring, a term used to identify potential money laundering or other illegal activity. Unfortunately, a recent report from the Treasury Inspector General for Tax Administration concluded that the IRS’s Criminal Investigation unity might not be utilizing the intended authority conferred by the Bank Secrecy Act.

The TIGTA report examined 278 IRS structuring investigations by the agency’s Criminal Investigation unit. After eliminating investigations where the source of funds could not be ascertained, the TIGTA found that 91 percent of the remaining cases involved businesses or individuals who had obtained their funds lawfully. The categories of small businesses included restaurants, gas stations, and jewelry stores.

Even more troubling, the report found that taxpayer rights may have been compromised during some of those investigations. During a structuring investigation, the IRS may utilize its civil forfeiture process. According to IRS procedures, civil forfeitures are intended to stop criminal enterprises, not law-abiding taxpayers.

One commentator suggested that small businesses are easier for the IRS task forces to target as quick hits. Actual money laundering or drug trafficking, in contrast, might be much more time-consuming to investigate. If you are concerned about your rights as a taxpayer during an IRS controversy, make sure you have an experienced tax law attorney representing you.

Source: Accounting Today, “IRS seized funds from lawful activity when pursuing anti-structuring cases,” Michael Cohn, April 4, 2017

FindLaw Network