Lawmakers reintroduce bill to curb IRS's ability to seize funds

Lawmakers reintroduce bill to curb IRS's ability to seize funds
© Greg Nash

A bipartisan group of lawmakers in the House and Senate are reintroducing legislation aimed at making it more difficult for the IRS to seize taxpayers’ assets.

The bill had passed the House last year by a unanimous vote but was not considered then by the Senate. Reps. Peter Roskam (R-Ill.) and Joe Crowley (D-N.Y.) offered the legislation again last week, and Sens. Sherrod BrownSherrod Campbell BrownFed eases Wells Fargo growth cap to let it issue emergency coronavirus loans Democratic senators call for funding for local media in coronavirus stimulus Zoom, grocery delivery, self-isolation: How lawmakers are surviving coronavirus MORE (D-Ohio) and Tim ScottTimothy (Tim) Eugene ScottThe Hill's 12:30 Report: US braces for 'hardest' week yet How much damage? The true cost of the Senate's coronavirus relief bill Senate unanimously passes T coronavirus stimulus package MORE (R-S.C.) are expected to reintroduce it in the upper chamber this week.

Under the bill, the IRS would only be able to seize assets from taxpayers suspected of “structuring” transactions under $10,000 to avoid bank-reporting requirements if the money came from illegal sources or the transactions were structured to hide another crime. This provision would codify a policy that the IRS has had in place since 2014.

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The bill also would create a process for reviewing seizures in structuring cases.

The legislation came about after the House Ways and Means Committee’s oversight subpanel held hearings about how the IRS has handled small-business owners’ funds.

Up until a few years ago, the IRS would seize assets in suspected structuring cases even when the funds came from legal sources. The agency implemented a policy in October 2014 that requires that funds only be seized when they come from illegal sources. However, there were several small-business owners whose funds were taken under the old policy that had difficulty getting their money back.

“The IRS and [Department of Justice] abused their authority and took money from people who did nothing wrong,” Roskam said in a news release. “With today’s legislation, we’re making sure they can never do it again. With the support of so many lawmakers from both sides of the aisle, we can finally put this ugly chapter to rest.”

The Daily Beast first reported the bill's reintroduction.