IRS

The IRS Stole $59,000 From an Innocent Veteran; Years Later, They Still Won't Return It

"They did it for money, and they destroyed a good and honest man."

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Molly Riley/TNS/Newscom

Oh Suk Kwon, an immigrant from South Korea who spent four decades serving in the U.S. military, had his life and business destroyed by the Internal Revenue Service in 2011—on nothing more than a hunch.

After getting out of the Army in 2007, Kwon and his wife purchased a gas station in Ellicott City, Maryland. Four years later, the IRS targeted Kwon's station as part of a now-discredited effort at catching money launderers making large cash deposits. The investigators seized more than $59,000 from Kwon, forcing him to shutter his business. His wife died soon after.

"But after the investigation ended, after the gas station went under, and Kwon's wife died amid the stress of it all, after he moved from his neighborhood in shame and the Internal Revenue Service changed its policy so no other small business would get steamrolled this way—the agency won't give Kwon his money back," writes columnist Petula Dvorak in The Washington Post.

What happened to Kwon is a tragedy. That the IRS won't now admit its mistake and return his money is a travesty.

Kwon was one of hundreds of individuals and businesses targeted by the IRS for nothing but a supposedly suspicious pattern of deposits. A Treasury Inspector General for Tax Administration report released in April detailed how the agency seized more than $17 million from innocent business owners as part of an effort at targeting so-called "structuring," in which criminals will make cash deposits of less than $10,000 in order to avoid detecting by federal banking regulators. Under the terms of a 1970 federal law, banks must report all deposits of more than $10,000.

But the IRS's anti-structuring investigations were seriously flawed. In more than 90 percent of the cases, the inspector general found, the seized money turned out to be completely legal. The report also found that investigators violated internal policies when conducting interviews, failed to notify individuals of their rights, and improperly bargained to resolve civil cases.

That seems to be what happened to Kwon. An IRS spokesman told Dvorak that Kwon pleaded guilty to a charge of structuring, even though the agency failed to produce any other criminal charges against him.

There is hope for Kwon. Other victims of the agency's anti-structuring investigations have been made whole, but only after years of legal battles. Last year, the IRS returned $29,500 they had stolen in 2012 from a Maryland dairy farmer. The farmer, Randy Sowers, was represented by the Institute for Justice, a nonprofit libertarian law firm, in his challenge to the seizure.

"I couldn't believe…they would just come in and take my money with no prior notice," Sowers told a congressional committee in 2015 during a hearing on the "structuring" crackdown. "I thought the government was supposed to protect me. I didn't think they were supposed to come out and try to put me out of business."

The same thing happened to Carol Hinders, an Iowa woman who ran a small, cash-only Mexican restaurant. In 2013, two IRS agents showed up at Hinder's door and told her the agency was seizing $33,000 from her bank account for structuring violations. She was never accused of a crime. She later became the face of an investigative report by The New York Times that showed how the IRS was targeting innocent Americans and abusing its asset forfeiture powers. After that, she got her money back from the IRS.

"The government is seizing billions of dollars of cash and property from Americans often without charging them with a crime," said Rep. Jim Sensenbrenner (R-Wisc.) at the 2015 congressional hearing where Sowers testified. Civil asset forfeiture, he said, "has proven a far greater affront to civil rights than it has a weapon against crime."

In response to public outrage over how the IRS was targeting businesses with anti-structuring investigations, the agency announced in 2014 that it would change how those investigations operated, focusing only on cases where there was actual evidence of criminal activity.

But that's little consolation to Kwon, who is still facing an uphill legal battle to get his money back. Dvorak reports that the IRS refused his most recent request in August.

"There was no good policy purpose for the prosecution. They did it for money, and they destroyed a good and honest man," Kwon's attorney tells Dvorak. "It is shameful."

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  1. So if structuring is such a criminal act because it hides your financial dealings, how do people keep getting caught doing it?

    1. Because of thousands of dedicated federal workers working long hours under miserable conditions in a desperate attempt to maintain justice?

      Or computers?

    2. Because people who mistakenly believe that being innocent of a crime means the State won’t punish them don’t think to be more subtle about hiding the evidence of the crime they’re not committing?

      1. Don’t do what Donnie Don’t does.

        1. Don’t tell me what i do or don’t do.

    3. I used to work at a bank. Banks are supposed to file Suspicious Activity Reports if they believe someone is using structuring to get around the $10,000 disclosure rule.

      1. So… busybodies.

    4. Because the minimum reporting limit for deposits to banks are secretly much lower than the 10,000 listed in the law they prosecute under. Basically any large deposit is reported by the bank.
      *puts on tin foil hat*
      you see, they can track all the money in bank accounts anyway because a warrant isn’t required for information from a the 3rd party, such as your bank, plus it’s all digital so they can just confiscate it with a keystroke, whereas it would be much more difficult to physically take the money from individual customers. So If the institutions you contracted with to protect your property will just sell you out without warning or fight, you might ask why do we use them and not just keep it yourself? I’m glad you asked! Well Timmy you see it’s because of a thing called inflation. If you keep piles of these worthless pieces of paper in a safe at home, the govt. will devalue it so they have less value to pay on all the debt they are racking up to stay in power, this causes your pile of paper to drop it’s total value drops between 2 and 10% a year, every year (depending on which rules you use), so keeping it yourself is a great way to finance the govt buying influence.. so remember Timmy, keep putting money in that piggy bank, because its great for America!

    5. Beacause any single deposit over 10K requires reporting. And so any collection of deposits under 10K (withing some policy stipulated time-period) require the they be reported as suspicious.

      You are guilty if you do, and guiltier if you don’t.

      The kicker is the average deposit of a small-business in this country is under 10K. We have been made criminals by diktat.

  2. Forty years of national service down the drain.

    Damn enabler.

  3. Don’t want to get steamrolled like a thug? Don’t deposit legal tender in the bank like a thug.

  4. Got what he deserved.
    Gasoline stations sell petroleum products that destroy the entire planet in the blink of an eye.

    Not only that, the damn fool was in Maryland, acting as an individual business owner. Talk about poking the (liberal) tiger with a stick. Didn’t he know enough to work for wages so he could be properly ‘protected’ by the laws of the state?

  5. Join me in praying (and kneeling since it’s all the rage for justice) that the perpetuators who committed these acts ruining the lives of innocent people get an especially vicious sort of comeuppance.

    Assholes.

  6. “I thought the government was supposed to protect me.

    The upside is you learned a positive lesson about the true role of the state.

    1. That’s why a healthy skepticism of government is necessary for a vigilant society.

      But progressives have suspended this notion and gone pro-government above the people full stop.

  7. 8 trillion missing from Pentagon, no one cares. Wall Street sells fraudulent securities nearly causes worldwide depression, no one cares. Guy makes a few $8,000 deposits, crime of the century.

    1. Up here we have Finance Minister Bill Morneau who is from a multi-millionaire family and married into the billionaire McCain family. He has assets he did not disclose; not to mention shell corporations. The Prime Minister is a trust fund millionaire.

      So what do these two numbskulls do? They engage in class warfare and decide to go after tax advantages used by middle-class SME’s calling them ‘loopholes’. Apparently ‘sprinkling’ is the difference between chaos and civilization.

      It’s outrageous and preposterous what the Liberal party of Canada is doing. Full on socialist nonsense.

    2. “Some guy” = easy pickin’s.

  8. OT: I wish Rand had just kept his piehole shut.

    1. Yet more proof there’s actually no such thing as a libertarian.

      1. This is what Stormy actually beleives!!

        1. Yes, it is what I actually believe. Over the past 13 years I’ve become convinced that everyone claiming to be a libertarian is either lying or in denial about their motivations.

          1. Then…what’s the point of you being here?

            To pontificate to people who don’t care what you think? And won’t change their minds? Or will lie?

            Honestly curious.

            1. When I first came here in 2004, I thought I was a libertarian.

              Now it’s a combination of inertia and compulsive tendencies.

            2. To pontificate to people who don’t care what you think? And won’t change their minds?

              Isn’t that why everyone’s here?

    2. You would rather have Luther Strange, or the democrat? Who else should Rand have endorsed?

      1. Um, he could have kept his piehole shut? Lying about Moore’s constitutional bona fides just makes things worse.

    3. What in the actual fuck? smh

  9. What happened to Kwon is a tragedy. That the IRS won’t now admit its mistake and return his money is a travesty.

    A government agency admitting to making a mistake? You must be new to this universe.

    “I thought the government was supposed to protect me. I didn’t think they were supposed to come out and try to put me out of business.”

    He must also be new to this universe.

  10. Structuring IS a crime in and of itself, no other criminal activity needed. That’s the problem with it.

    1. The crime requires the intent to avoid reporting. If the gas station receipts were near but short of $10K regularly, that’s not a crime at all.

      1. You’re right, it does require intent to avoid reporting, which applies in this case and it’s why he pled guilty. The law is awful.

    2. The crime requires the intent to avoid reporting. If the gas station receipts were near but short of $10K regularly, that’s not a crime at all.

      1. Perhaps is more along the lines of malum prohibitum, like statutory rape where you are strictly liable no matter what you did or did not know or intended. There’s a crime committed here somewhere, and your’re handy, pardner.

        1. So the crime becomes not having $10,000 in cash sales in a day for a business owner.

    3. And there is apparently no way to make several $8,000 cash deposits without taking a chance of it being declared as “structured”.

      My understanding is part of “structure” is the bank didn’t file a Suspicious Activity Report. An observation by a third party (who has big incentives to report) that your activity is not a crime, is itself evidence of a crime.

  11. IRS: It Really Steals

  12. Because FYTW.

  13. You have to take money to make money.

    1. Or in the case of our government, to lose it, squander it, misappropriate it, waste it, or just steal it.

  14. He’s heartbroken that the country he loves is treating him this way.

    It’s not the country, it’s the IRS. The IRS and Justice Department are treating him this way, just as they generally treat the country he loves. But, hey, war on drugs is some fucking how priority one with Congress and somehow a high enough priority with enough voters to keep this going.

  15. Another reminder of why the 2nd Amendment should be broadly interpreted to allow heavy weapons and other equipment ala our militarized “serve and protect” employees.

  16. These types of theft by government need to completely stop at all levels of governments.

  17. The IRS should have to pay interest too. The exact same interest and penalties they charge for overdue tax payments.

  18. In paragraph #5: “in order to avoid detecting by federal banking regulators.”
    Shouldn’t that be, “in order to avoid being detected by federal banking regulators.”?

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