The North Carolina business owner for months has been battling the federal government after IRS agents last fall seized $107,000 from him, under a controversial practice known as civil forfeiture…
McLellan is just one of thousands of Americans the IRS has seized money from, supposedly for “structuring” funds to avoid a law requiring banks to alert the government of deposits over $10,000. The law was instituted to help the government ferret out drug dealers, terrorists or other criminals — but the IRS occasionally flags deposits of just under $10,000 as suspicious even if there’s no evident criminal wrongdoing, in turn ensnaring people who may be innocent…
“There is no crime in this country for doing business in cash,” he said. “But the government treated Lyndon worse than a criminal, by taking his property and forcing him to prove his own innocence to get that property back.” …
Two months ago, the government offered McLellan 50 percent of his money back and warned him against chasing publicity, even going so far as to suggest it would rile people inside the IRS and could hurt his chances of seeing his cash again, his attorneys said.
“Today the the DOJ is giving him 100 percent,” said Institute for Justice spokesman J. Justin Wilson. “We got him an enormous amount of publicity – and it did work.”
Wilson said McLellan had other resources to keep his business, “L & M Convenience Mart,” open since last October. But he had to fork over $3,000 for his initial legal fees, and some $19,000 for an accountant to audit his business to prove to the government there wasn’t anything untoward going on. The government said it will not repay those costs or any interest on the seized money…
From 2005 to 2012, the IRS seized more than $242 million from alleged structuring violations in more than 2,500 cases, according to an Institute for Justice study. In more than 830 of those cases, no other criminal activity was alleged…
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