IRS Seizes Over $100,000 From Innocent Small Business Owner, Despite Promise To End Raids

Wielding a banking law intended to thwart drug trafficking and money laundering, the IRS has a new target in its sights: a rural convenience store that sells catfish sandwiches.Lyndon McLellan - - lost over $107,000 in an IRS raid after the agency seized the bank account belonging to his small business, LM Convenience Mart in Fairmont, North Carolina. "It took me 13 years to save that much money and it took fewer than 13 seconds for the government to take it away," he said.Like - thousands of other victims - of civil forfeiture, the government never charged Lyndon with a crime. Now, with help from the Institute for Justice, he's - fighting back - to regain his hard-earned cash.For over a decade, Lyndon has run his mart, an unassuming place where locals stock up on soft drinks and cigarettes. But last year, the IRS wiped out the shop's bank account using the Bank Secrecy Act. Under this law, banks must report all cash transactions over $10,000. Federal law also prohibits "structuring" deposits in amounts under $10,000 to skirt the reporting requirement.But making frequent cash deposits under $10,000 is only a crime if someone deliberately intends to evade filing those reports. Lyndon had no such intention. According to his niece, who usually made deposits, a bank teller told her that depositing less than $10,000 would avoid burdensome paperwork. Moreover, forfeiting Lyndon's cash would violate his constitutional right to due process and the Eighth Amendment's - - protection against "excessive fines."Lyndon McLellan outside of his small business, LM Convenience Mart in Fairmont, North Carolina.This travesty of justice should not have happened. Last October, after - The New York Times - ran a front-page feature on unjust structuring seizures, the IRS - announced - it "will no longer pursue the seizure and forfeiture of funds associated solely with 'legal source' structuring cases." In other words, Americans who earned their money lawfully would not be targeted. The U.S. Department of Justice - made a similar shift - in late March.During a congressional hearing in February, IRS Commissioner John Koskinen personally apologized to victims of IRS seizures, offering his condolences to " - anyone who got caught up in this - ." Koskinen even alluded to Lyndon's case, noting, " - Somebody's not following the policy - ."Also on Forbes: