The United States House of Representatives recently voted to approve a proposal that would make it more difficult for the Internal Revenue Service (IRS) to seize assets in structuring cases. The law is designed to revise the authority of the IRS to seize property “that has been structured to avoid Bank Secrecy Act (BSA) reporting requirements.”
Essentially, the change clarifies that seizure is only allowed if the IRS believes the structure was used to conceal some sort of criminal activity.
Proposed changes to asset seizing procedures: The proposal currently states that the IRS must make a good faith effort to find all property owners of the seized property and notify the owners of their rights within 30 days of seizing the property.
The IRS can get an extension of the above notice requirement if the IRS “can establish probably cause of an imminent threat to national security or personal safety necessitating such an extension.”
Inspiration for the bill: As noted in a recent piece by the Financial Regulation News, the bill was inspired by a group of small business owners who had property wrongfully seized by the federal agency.
Future of the proposal: Whether or not this proposal will become law is not yet known. The proposal is currently headed to the Senate. If it passes there, it will move on to the President.
Impact of the proposal: If the proposal does continue its forward momentum and ultimately becomes law, it will provide extra protection to business owners who are facing scrutiny from the IRS.