This bill would place limits on the ability of the Internal Revenue Service (IRS) to use civil asset forfeiture to seize a person’s assets unless they’ve been charged with a crime. It would narrow the IRS’s authority so that property could only be seized if it was derived from an illegal source or the funds were structured to conceal the violation of a law or regulation other than structuring transactions to evade Bank Secrecy Act reporting requirements. Additionally, a process would be established that the IRS has to comply with when it seizes property.
WIthin 30 days of seizing property, the IRS would be required to make a good faith effort to find all owners of the property and notify them of post-seizure hearing rights. The IRS can apply to a court for one 30-day extension if there’s probable cause of an imminent threat to national security or personal safety.
If the property owner requests a court hearing within 30 days of receiving notice, the property must be returned unless the court holds a hearing within 30 days of providing notice and finds probable cause that the property was derived or illegally or conceal a violation of a law other than a structuring violation.
Any interest received from the federal government related to the recovery of property seized by the IRS related to a claimed violation of BSA structuring provisions would be excluded from gross income for tax purposes.