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Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, if a person deposits $10,000 or more into a financial institution, that institution must submit a currency transaction report to the Treasury Department. Avoiding this reporting requirement by purposefully staying below the $10,000 limit is a Federal crime known as structuring.
Structuring was made illegal in 1986 to prevent large-scale criminal enterprises, terrorists, and money launderers from hiding their illegally earned money from authorities by consistently depositing just shy of that $10,000 limit. This makes complete sense.
When structuring is believed to have occurred, the Internal Revenue Service can use its civil asset forfeiture authority to seize funds and force the owner of the funds to prove that they were obtained legally.
Let me tell you, I am not laying awake at night, and neither are my colleagues here, worrying about terrorists and mobsters not being able to get access to their money. So far, so good. The law makes sense.
But now let me tell you about somebody who had their money seized by the IRS. Andrew Clyde served three combat tours in Iraq, and then he came home and opened a store in Georgia.
Mr. Clyde had an insurance policy that only covered up to $10,000 in off-premise losses. So, like any reasonable person, Mr. Clyde never brought more than $10,000 in cash with him when he made his nightly deposits. The IRS seized $950,000 from him.
Now, just marinate in that for a minute, Mr. Speaker. Imagine trying to run your business, and one day the Federal Government comes in and takes away all of your money. You don't know why, but it is just gone.
You would assume that the IRS would then talk to Mr. Clyde, hear his rationale, and say: Well, it is my mistake. You are clearly not a mobster or a terrorist. Thank you for your service. Here is your life savings back.
But that is not what happened. Instead, the IRS threatened him with criminal structuring charges until he agreed to settle with the agency, and gave them $50,000, after he had spent nearly $100,000 in legal fees.
Andrew Clyde lost $150,000 simply because he wanted to make sure that his cash deposits were low enough to be insured.
We are here today to make sure this never happens again. The RESPECT Act makes commonsense changes to civil asset forfeiture practices. First and foremost, the IRS would have to show probable cause that the funds they are seizing were derived from or connected to an illegal source.
Additionally, it would provide protections for taxpayers whose money was taken, requiring a hearing within 30 days of the money being seized. These commonsense steps prevent the Federal Government from acting with impunity and harassing the very citizens that they are supposed to protect.
I want to thank a number of individuals for their work on this legislation. I would like to thank John Lewis, the ranking member of the Oversight Subcommittee. I want to thank my lead sponsor, Joe Crowley, the lead Democrat on this legislation. I want to thank Mr. Neal for his leadership, and I want to thank Chairman Brady.
We have been at this for a long time. We first started investigating this issue at an Oversight Subcommittee hearing in February of 2015, and we made some progress. IRS Commissioner Koskinen apologized to the victims of this practice on behalf of his agency. In fact, a year later, he changed the IRS procedures to restrict the use of civil asset forfeiture cases in which the money was earned illegally, a commonsense decision that we will codify with this legislation.
I am also heartened to say that in March of this year, the IRS finished its process of reviewing all 454 contested cases that occurred before the rule change. The agency either returned or recommended that the Department of Justice return approximately 80 percent of those funds. The IRS returned over $6 million to honest Americans who were victims of this government overreach.
While the IRS returned over $6 million, they have also recommended that the Department of Justice return a whopping $16 million. Unfortunately, the Department of Justice still has a long way to go in tackling the backlog of undecided cases. We will be addressing this issue with an amendment in the upcoming appropriations bill.
Mr. Speaker, in closing, Americans deserve a government that they can trust. I look forward to working with my colleagues to pass this legislation to prevent future victims of abusive civil asset forfeiture practices, and fight for those who have been affected.
Mr. Speaker, I reserve the balance of my time,
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