BREAK IN TRANSCRIPT
Mr. Chairman, I yield myself such time as I may consume.
Mr. Chairman, let me tell you a quick story. Andrew Clyde served three combat tours in Iraq, after which he returned home and opened a store in Georgia. Mr. Clyde had an insurance policy that only covered up to $10,000 in off-premised losses. So like any reasonable person, he never brought more than $10,000 in cash with him when he was making his nightly deposits.
Do you know what happened next?
The Internal Revenue Service noticed that he was depositing just under $10,000 in cash regularly, so they took all of his cash. That is $950,000.
If you are like most people, you are confused when you first hear about this. As it turns out, Mr. Clyde was in violation of a Federal law known as structuring, which is the intentional avoidance of Federal reporting requirements by staying below $10,000 in cash deposits. This law was intended to catch large-scale criminal enterprises, mobsters, terrorists, and human traffickers, not veterans like Mr. Clyde.
When structuring is believed to have occurred, the IRS can use its civil asset forfeiture authority to seize funds in question and force the owner to prove that the money was earned legally.
Well, in this instance, Andrew Clyde earned the money legally and had a legitimate reason for depositing less than $10,000. So you would assume that Mr. Clyde would have ended this with the IRS talking to him and then saying: Oh, we made a mistake. Clearly you are not a mobster or a terrorist. Thank you for your service. Here is your life savings back.
But, no, that is not what happened, Mr. Chairman. That is not how the story ended.
Instead, the IRS threatened him with criminal structuring charges until he agreed to settle with the agency and give them $50,000, after he had already spent $100,000 in legal fees. He lost $150,000 simply because he wanted to make sure that his cash deposits were low enough to be insured. If that sounds messed up to you, Mr. Chairman, that is because it is.
Now, here is the good news. The House recently passed, unanimously, H.R. 1843, the RESPECT Act. This bill prohibits the IRS from seizing funds from individuals, unless there is a probable cause that the money was earned illegally or connected to an illegal activity. But there is still the problem of those people who are already victims of this abuse by our government in civil asset forfeiture.
Now, since we began our bipartisan investigation of the IRS's civil asset forfeiture practices a couple of years ago, the IRS has apologized for past behavior, which is good; they worked quickly to reach out to possible victims, which is good; and they subsequently responded to the 454 petitions that they received. As of March 1, the IRS returned over $6 million in seized funds. Good news. So far so good.
But the plot continues, and here is where we are right now. It turns out that a majority of the petitions were actually referred to the Department of Justice. The IRS referred the DOJ 255 cases, and has recommended that the DOJ return $16 million to taxpayers whom they do not suspect of being conducted in any way to illegal activity. Unfortunately, the Department of Justice has not been nearly as interested in correcting these past wrongdoings.
As of July, the Department of Justice responded only to 73 of the outstanding 255 cases. This is completely unacceptable. The Federal Government took legally earned money from taxpayers, and the Department of Justice hasn't given the majority of these people a response, including Andrew Clyde.
The Roskam-Neal amendment, offered by myself and Mr. Neal, the ranking member from Massachusetts on the Ways and Means Committee, is very simple. It simply says this: No one in the relevant section of the Department of Justice can get a performance bonus until they finish reviewing the backlog of cases that the IRS has sent them. We are not asking the Department of Justice to do anything extraordinary, Mr.
Chairman. We are simply asking them to do their job. And until they do their job, the bare minimum that taxpayers can expect is that we at least don't reward these people with bonuses.
Mr. Chairman, I reserve the balance of my time.
BREAK IN TRANSCRIPT
Mr. Chairman, I thank the gentleman for his support.
I thank the chairman for his assurance and his hard work on this. I am confident that this will be resolved.
Mr. Chairman, I have got to tell you that the discussions that this House has made on a bipartisan basis with the Department of Justice have been obtuse and they have been ridiculous. I have been embarrassed by the interactions that I have had with senior staff members at the Department of Justice on this issue.
The Ways and Means Subcommittee has been scandalized by this, and we are going to do something about it. So here, today, we are rising on both sides of the aisle to bring remedy, rescue, and restoration to our citizens.
Mr. Chairman, I yield back the balance of my time.
BREAK IN TRANSCRIPT