Maryland Farmer Who Had $41K Seized by IRS Continues to Battle for Money
Maryland farmer Calvin Taylor has lived his life always trying to do the right thing.
Taylor and his wife Debora operate C.W. Taylor Farms in Preston, Maryland, where they grow sweet corn and raise chickens, and run several farm stands, called Taylor’s Produce, across Maryland’s Eastern Shore.
Through their business, the couple employs a number of teenagers to work at their farm stands and on the farm. They boast of selling the best corn in the state of Maryland.
On Sept. 16, 2011, though, the Taylors learned that thousands of dollars their business generated had disappeared in an instance.
On that day, Taylor told the House Ways and Means Subcommittee on Oversight in testimony Wednesday, IRS agents knocked on the couple’s farmhouse door and asked to speak with Taylor about his banking transactions.
At first, the agents said they didn’t think the Taylors had done anything wrong. But the conversation shifted from discussions about a change in their business’s name on its checking account to a pattern of cash deposits Taylor made at the bank.
The agents, Taylor told lawmakers Wednesday, wanted to know why so many of his transactions had totaled just under $10,000, and Taylor told them it was common knowledge that any cash deposits of more than $10,000 meant that the bank had to file a form with the government.
According to other business owners Taylor had spoken with, any cash deposit of over $10,000 was reported to the IRS, and “nobody wants your name filed to the IRS, even if you’re as honest as you can be.”
To the IRS, though, the pattern of deposits under $10,000 was indicative of structuring, which involves making consistent cash transactions to avoid federal reporting requirements.
Structuring is a crime.
The agents talked with Calvin and Debora Taylor for an hour before telling them they had been to the couple’s bank and taken all of their money—$90,175.48— through civil forfeiture, leaving them with nothing.
“I thought of the bills that had to be paid, the teenagers who hadn’t cashed their checks yet,” Taylor said today. “What kind of employer bounces checks off of their employees?”
Furthermore, the couple had mailed out invitations to their daughter’s wedding the day before the agents visited their house, and they were planning to pay for both her wedding and reception taking place six weeks later.
Taylor provided the IRS with four years of financial information to prove he and his business had done nothing wrong, and two weeks later, the IRS said it didn’t think Taylor knowingly broke the law.
The government offered him a settlement: 5 percent of the amount of the money deposited in “structured” amounts from July 2008 to August 2011, which totaled $41,790.
“I was realistically looking at losing what I had worked my life for and what my father had worked his life for,” Taylor said. “So there was no choice. I had to sign.”
On Wednesday, Taylor and Frederick, Md., dairy farm owner Randy Sowers testified before the House Ways and Means Subcommittee on Oversight to talk about their experiences with civil asset forfeiture, a tool that gives law enforcement the power to take cash, cars, and property if they suspect it’s tied to a crime.
Both Taylor and Sowers had tens of thousands of dollars seized by the IRS under civil forfeiture for a crime called structuring.
Under the Bank Secrecy Act, structuring, which involves making consistent cash deposits and withdrawals of under $10,000 with the intent of evading reporting requirements, is a crime.
Structuring laws were intended to target money launderers, drug traffickers, and those funding terrorist activity. However, small business owners like Taylor and Sowers have become trapped in the system.
In many cases, the only crime the business owners are committing is structuring, and both Sowers and Taylor contend they were unaware they were doing anything wrong.
“Thomas Jefferson said something about the government getting so big that it can take everything you have,” Taylor said Wednesday. “It just seems very, very real to me right now.”
The IRS argues that structuring is illegal, and IRS Commissioner John Koskinen told lawmakers repeatedly that a prosecutor and federal judge must find probable cause to seize money from Americans.
Koskinen, as well as federal officials who appeared before the subcommittee, could not comment on specific cases.
After a growing number of cases involving innocent people who had money seized by the IRS for structuring were documented by the media, though, the IRS and Justice Department both internally changed their policies to address the issue in 2014 and 2015, respectively.
Under the new policies, officials with the federal government could only pursue structuring cases if they could prove the money in question stemmed from criminal activity.
The new rules at the IRS and Justice Department offered additional protections for business owners dealing largely in cash. But they did little to help Sowers and Taylor, whose money was seized before the federal government acted.
And Taylor and Sowers aren’t alone.
The IRS told lawmakers Wednesday that they have identified 75 cases involving property owners whose money was wrongfully seized, and whose money wouldn’t have been seized under the current policy.