IRS returns $30,000 in cash back to Sowers

Associate Editor

WASHINGTON (July 12, 2016) — Randy Sowers has finally has his money back.
The Internal Revenue Service has returned the nearly $30,000 it took from the Middletown, Md., dairy farmer in 2012 after his wife repeatedly deposited cash proceeds from farmers’ market sales into a bank account in increments just under $10,000 — the threshold where banks must report cash deposits to the federal government.
The deposits violated a little-known banking law that prohibits so-called “structuring” designed to avoid the reporting process.
Sowers said his wife structured the deposits that way at the request of a bank teller who wanted to avoid the paperwork-heavy reporting process.
“It’s never too late to do the right thing,” said Rep. Peter Roskam, chairman of the House Ways and Means Oversight subcommittee, in a statement. “I’m glad the IRS stepped up and finally gave Randy Sowers his money back. His case was an affront to justice and the government can never truly compensate him for the ordeal it put him through.”
The subcommittee held several hearings on the deposit structuring issue over the last year after media across the nation reported about several instances where federal agencies seized money from people through a process known as civil asset forfeiture — including Sowers and another Maryland farmer — even though they were never charged with a crime.
Sowers received his money several weeks after the IRS also agreed to comply with the subcommittee’s demands to resolve pending forfeiture cases and return wrongly seized money.
The government requires banks to report the cash deposits because it uses that information to search for and track criminals who deal primarily in cash — drug dealers, terrorism financiers, money launderers, tax dodgers and the like.
Roskam, R-Ill., and Rep. Joseph Crowley, D-N.Y., have also introduced legislation that would require the IRS to show probable cause that seized money was derived from an illegal source or connected to criminal activity before it could take the cash.
It would also require that those who have money seized to be given a post-seizure hearing within 30 days, or longer, and it would exempt interest on wrongly seized cash from income tax if it’s determined it was taken from a victim of IRS abuse.
Sowers initially settled the case by agreeing to forfeit about 10 percent of the roughly $300,000 deposited into the account in structured amounts over a 30-week period from April to December of 2011.
Sowers claims law enforcement officials pressured him into the settlement by threatening to seize more money if he didn’t agree to the $30,000.
Calvin Taylor, owner of a family farm in Preston, Md., on the Eastern Shore also surrendered money to the IRS and was featured in a May subcommittee hearing.
Taylor said he ultimately forfeited nearly $42,000 to the government because he said a prosecutor told him he could face criminal charges if he didn’t agree to the deal.
He admitted he deposited nearly $700,000 in cash from 2008 to 2011 into a bank account in increments just below $10,000 because a bank employee once told him deposits more than $10,000 were reported to the IRS.
Taylor said he didn’t know structuring his deposits that way would seem suspicious “and who wants to get reported to the IRS?” he told the committee, according to his testimony.
“I had no choice but to agree to the [Department of Justice] and IRS keeping our legally earned money,” he said. “I faced potential criminal charges for crimes I did not know I had committed, but that a U.S. prosecutor had nonetheless threatened to bring against me. … The potential cost of defending myself was astronomical, and it greatly exceeded our family’s resources.”
The subcommittee expects to debate the new legislation “soon,” according to a subcommittee statement.