Thankfully, the Institute for Justice has stepped in to help Terry and Sandy Dehko, who own a family grocery in Michigan, from an outrageous assault on their livelihood by the federal government.
Like most grocery store owners, Terry and Sandy receive cash every day from their customers. Their commonsense practice has always been to avoid letting too much cash accumulate in their store. Moreover, their insurance policy specifically limits coverage for theft or other loss of cash to $10,000—a common provision for small-business policies.
Over the past several years, however, the government has been collecting vast amounts of private information about Americans, including entrepreneurs like Terry and Sandy that deal in cash. In 2001, the Patriot Act amended federal law to make it easier for the government to seize money and other private property through civil forfeiture. Federal law requires banks to report cash transactions above $10,000, and it is illegal to “structure” cash deposits for the purpose of avoiding this requirement.
In 2010, the IRS visited Terry and Sandy and reviewed their banking practices. In 2012, the IRS conducted an anti-money-laundering examination of Terry and Sandy’s store, thoroughly reviewing their books and policies, and gave the Dehkos a clean bill of health. After the audit, the IRS sent Terry and Sandy a letter clarifying that “no violations [of banking laws] were identified.”
But nine months later, the IRS obtained a secret warrant and cleaned out Terry and Sandy’s entire bank account (over $35,000) on the grounds that their frequent cash deposits—deposits of which the IRS should have been well aware when it issued its clean bill of health—violated federal “structuring” law. The government never charged Terry and Sandy with any crime and refuses to return their money.
