The IRS’s job is to enforce the nation’s tax laws, investigate fraud, and prevent illegal refund claims. But in recent years, IRS enforcement tactics have gone too far for some taxpayers — resulting in millions of dollars seized, frozen, or taken over alleged violations that never actually happened.
Reports show the IRS seized more than $43 million from taxpayers based on so-called “structured transactions” — even when no crime occurred.
Let’s break down how this happened, who was affected, and what it means for taxpayers today.
The IRS targeted individuals and small businesses for “structuring” — a federal financial crime normally associated with money laundering, drug organizations, or illegal international transfers.
Under the law, structuring happens when someone deliberately deposits cash in amounts under $10,000 to avoid bank reporting requirements.
The IRS assumed that anyone making repeated small cash deposits was hiding illegal activity.
But here’s the problem…
Many of these taxpayers were not criminals.
They were:
They simply deposited money the way their business worked.
For years, IRS agents:
…based solely on deposit patterns — with no proof of illegal activity.
Agents treated ordinary deposits as suspicious simply because they were under the $10,000 reporting limit.
Instead of proving a crime was committed, IRS agents often forced taxpayers to prove they didn’t do anything wrong.
That’s backwards.
Federal oversight reports show:
Only a tiny percentage of those cases involved suspicious activity — meaning most of the money taken belonged to innocent taxpayers.
After public backlash, news investigations, and pressure from Congress, the IRS was forced to:
But not all money was returned.
Some taxpayers settled simply to avoid losing their business or paying massive legal fees.
There is a big difference between:
And that’s exactly the heart of the issue:
Legal businesses were treated like criminals because their deposit amounts looked unusual.
That’s not tax enforcement—that’s government overreach.
Many victims reported:
Some nearly went bankrupt over a crime they didn’t commit.
When the IRS took these funds, it wasn’t just numbers—
it was people’s incomes, employees, families, and survival.
The IRS has changed policy, but oversight reports show the agency still retains broad authority to seize funds based on “suspicious financial activity,” even without proving criminal intent.
While reforms have been announced, experts warn that:
Reforms were made, but the risk isn’t gone.
If you operate a cash-based business:
Even perfectly legal businesses need to protect themselves.
This case exposed a major issue inside the IRS:
The burden of proof was flipped against innocent taxpayers.
That’s not how American law is supposed to work.
The IRS must target criminals — not ordinary business owners simply trying to make a living.
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