Iowa woman's bank account seized

[dolphins4life]

http://theweek.com/article/index/270692/speedreads-irs-seizes-womans-entire-savings-because-she-deposits-less-than-10000-at-a-time

I don't get this.

I have a couple of savings accounts.

What should I do so this doesn't happen to me?

[Dave Gray]

Sounds like a half-story to drum up political outrage.  I'm guessing there's more to it.

So, what should you do?  Don't own a Mexican restaurant that runs on cash to where the IRS suspects you of tax evasion.  I think you're OK.

[dolphins4life]

but if my account grows to $33,000 could they seize it?

[Dave Gray]

They didn't seize it because of how much was in it.  I'm guessing they suspected tax fraud.  ...but who knows, because that article is shitty and is tantamount to a glorified headline.

[Phishfan]

It is called civil forfeiture and is more common than you would think. It is perfectly legal for the government to seize your assets and not charge a person with any crime. Their charge is against the money itself and it is not considered innocent until proven guilty. It is up to the owner to prove the money was not obtained illegally.

[dolphins4life]

one of my savings accounts I fund online when I get paid into my checking account.

The other one I fund with my paychecks from the super market

[Spider-Dan]

So here's what happened:

Banks are required to report any transaction over $10,000.  She was intentionally (and repeatedly) making deposits just under $10,000.   By her own admission, she was trying to avoid the reporting requirement; she claimed that she was trying to save the bank (not herself... the bank) paperwork.

When you run a cash business and make it a habit to come in just under the threshold for reporting, the IRS will suspect you of illicit activity.

edit:
Let me clarify my position here: I am not in favor of civil forfeiture laws.  I think they are broken and fuel corruption.  But if those kinds of laws are going to be on the books, then I do not fault the IRS for invoking them in this kind of case.

[dolphins4life]

But I wouldn't feel comfortable keeping $10,000 in a safe in my apartment.

I couldn't blame somebody for depositing a little at a time

[Fau Teixeira]

I think civil forfeiture laws are unconstitutional under a few different sections. And a class action should be brought against the state.

[Spider-Dan]

But I wouldn't feel comfortable keeping $10,000 in a safe in my apartment.

So deposit it in the bank.

I couldn't blame somebody for depositing a little at a time

She didn't deposit "a little at a time."  She regularly deposited something like $9995; just barely under $10000, so it wouldn't be reported to the IRS.

[Cathal]

Hooray for government taking away someone's money with no charge! Of course, this story is a bit light on actual events so who knows what else is missing, but, it's not hard to believe the IRS just sucks and will never return that money. What a crime.

[dolphins4life]

So deposit it in the bank.
She didn't deposit "a little at a time."  She regularly deposited something like $9995; just barely under $10000, so it wouldn't be reported to the IRS.

What good would reporting it have done?  Wouldn't they have gotten suspicious anyway?

Even depositing it a little at a time, wouldn't they get suspicious if it grew so large?

[JGreenMachine]

What good would reporting it have done?  Wouldn't they have gotten suspicious anyway?

Even depositing it a little at a time, wouldn't they get suspicious if it grew so large?

At least the IRS would've known and would've expected her to file taxes if it had been reported.  To structure your transactions like that looks suspicious, and bank officials are trained to spot that. 

And yes, the bank would've gotten suspicious about the large balance.

[dolphins4life]

Is it the fact that it was all cash deposits that made them suspicious?

[JGreenMachine]

Is it the fact that it was all cash deposits that made them suspicious?

Possibly, seeing as the U.S. is a credit and check based economy.