(Politico) – When Carole Hinders answered a knock at the front door of her home in August 2013, she was confronted by two IRS agents. They told her they had just cleaned out the entire bank account of the restaurant, Mrs. Lady’s Mexican Food, that Hinders had owned and operated in tiny Spirit Lake, Iowa, for the past 30 years. The IRS seized more than $32,000.
While Hinders stood in shock, the IRS agents told her that her cash deposits looked suspicious. Based on that suspicion alone, the IRS had authority to seize her entire bank account using a federal legal procedure known as civil forfeiture.
Hinders protested that she’d get a lawyer and fight the seizure. She still remembers the disdainful response of one of the agents: “Well, you can try.”
The government never alleged that Hinders’ money was the proceeds of illegal activity. In fact, Hinders has never been in trouble with the law in her life. The IRS took her money on the basis of an obscure banking law that requires banks to report all cash transactions of more than $10,000 to the U.S. Treasury Department. This banking law makes it illegal for account holders to “structure” deposits of less than $10,000 to avoid the filing of a report.