The bill, known as the Clyde-Hirsch-Sowers Restraining Excessive Seizure of Property through the Exploitation of Civil Asset Forfeiture Tools (RESPECT) Act, would revise the authority and procedures the IRS uses to seize property that has been structured to avoid Bank Secrecy Act reporting requirements. Under the bill, the IRS could only seize property it suspects has been structured to avoid BSA reporting requirements if the property comes from an illegal source, or if the funds were structured for the purpose of concealing the violation of a criminal law or regulation other than structuring transactions to evade BSA reporting requirements.
Within 30 days of seizing property, the IRS would need to make a good faith effort to find all owners of the property, as well as notify the owners of the post-seizure hearing rights established by this bill. The IRS could apply to a court for one 30-day extension of the notice requirement if it can establish probable cause of an imminent threat to national security or personal safety.
If the owner of the property asks for a court hearing within 30 days after the date on which notice is provided, the property would have to be returned unless the court holds a hearing within 30 days after notice is provided and finds there's probable cause to believe the property derived from an illegal source or the funds were structured to conceal the violation of a criminal law or regulation other than a structuring violation. The bill amends the Tax Code to exclude from gross income any interest received from the federal government with respect to an action to recover property seized by the IRS under a claimed violation of the structuring provisions of the BSA.
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