Collins and Lewis Introduce Legislation to Stop IRS Abuse of Civil Asset Forfeiture

Feb 15, 2019
Press Release

WASHINGTON—Yesterday, Rep. Doug Collins (R-Ga.) and Rep. John Lewis (D-Ga.) introduced H.R. 1219, the Clyde-Hirsch-Sowers RESPECT Act, to protect innocent individuals and small business owners from IRS abuse and ensure their assets are not wrongly seized under civil asset forfeiture policies.

H.R. 1219 was inspired in part by Andrew Clyde, a U.S. Navy veteran, owner of Clyde Armory, and resident of Georgia’s Ninth District. In April of 2013, the IRS seized Clyde’s bank account without charging him with any crime, simply because he was regularly depositing several thousand dollars of cash from his business. The IRS originally seized nearly $950,000 from his business. After going through federal court, he was eventually forced to forfeit $50,000 to the IRS and spend over $100,000 in legal fees.

“Current law has been stretched far beyond its original purpose, opening the door for the IRS to abuse civil asset forfeiture, and leaving the burden of proof on law-abiding citizens to fight the federal government. Andrew Clyde experienced this abuse firsthand when the IRS seized $950,000 from his bank account, despite having no evidence of criminal activity,” said Congressman Collins. “By directly addressing civil asset forfeiture abuses, the RESPECT Act will protect small business owners like Mr. Clyde from IRS overreach and ensure innocent individuals receive the due process they deserve.”

“On the Ways and Means Oversight Subcommittee, I worked with my colleagues on both sides of the aisle for many years to right this wrong," said Congressman Lewis. "We have a responsibility to ensure those small businesses that are not engaged in illegal activities, but were unintentionally captured by the law, are made whole. As a result, this important legislation was included in our comprehensive bill – the Taxpayer First Act -- which almost became public law last Congress. I hope that this year, we will come together and finally provide taxpayers with the protections and support they need.”

“The RESPECT Act continues to be a massive, bipartisan win for the liberty of the people and should lift the spirits of all Americans,” said Andrew Clyde. “Back in 2013, less than two months after the IRS forced me to forfeit my legally earned money, I presented my grievance to Congressman Collins and he promised me his help. Then when I testified before Congress in 2015 about the IRS abuse, I asked them to prevent this from happening to anyone else. This legislation has done just that and I commend Congressman Collins and all the co-sponsors on this very important work. This legislation has now twice been unanimously passed in the House but been stalled in the Senate. With this third introduction, I call on the entire Congress to quickly pass it and present it to the President to be made law.” 

Under current “structuring” laws, the IRS may seize money if individuals have routinely “structured” deposits or withdrawals of less than $10,000. While the law was originally intended to catch individuals seeking to perpetrate or conceal a crime, it has been used to seize money from law-abiding citizens making legitimate business transactions. Under civil asset forfeiture laws, the IRS can keep seized money without filing criminal charges.

According to the Institute for Justice, the IRS seized more than $242 million in over 2,500 cases for alleged structuring offenses from 2005 to 2012.

The RESPECT Act will rein in IRS overreach and protect law-abiding citizens by accomplishing the following:

  • Requires prosecutors demonstrate probable cause that seized funds are either illegally earned or structured to conceal illegal activity before they proceed with a forfeiture case.
  • Codifies an IRS policy change from October 2014 to limit forfeiture for currency “structuring” to cases where funds in question are derived from an illegal source or used to conceal illegal activity.
  • Allows property owners to challenge a seizure at a prompt, post-seizure hearing, rather than waiting months or even years to present their case to a judge.

In the 115th Congress, the House unanimously approved the Clyde-Hirsh-Sowers RESPECT Act.