"Main Street" of a small town 600 miles south of Cleveland has a few churches on it, a couple of auto parts stores, a sandwich shop and a Piggly Wiggly. A few blocks off of the main drag of Fairmont, North Carolina, sits an L&M Convenience Mart on a dead-end street.
About a year ago, the owner of the small store in the small town felt the wrath of the Internal Revenue Service. The IRS decided that the owner was engaged in criminal activity and therefore the federal entity seized more than $100,000 from the business.
According to a news report, the IRS believed the owner was regularly structuring his business's bank deposits so that they would be less than $10,000, thereby avoiding bank reporting regulations. Both the convenience store owner's niece, who made the deposits, and the owner, say they were unaware of any banking violations.
The news article did not specifically state which offense the IRS believed the owner might be guilty of, but that this is one possibility: the Bank Secrecy Act says owners must file a report "if your business receives more than $10,000 in cash from one buyer as a result of a single transaction or two or more related transactions."
Regardless, the agency seized the $107,702.66 and later dropped the structuring charges against the man. Months after the seizure, the IRS offered to settle with the owner for half of the seized money. He rejected the offer. The agency recently returned the entire amount, but refuses to pay related expenses to the store owner, including attorney fees, interest and other costs.
The man's attorney has prevailed on the matter of the seized money, but is not satisfied with that victory. He wants the IRS to restore the business by paying interest, expenses and lawyer fees -- losses the convenience store would never have had to deal with had it not been for the IRS's actions.
This is a classic case of a citizen pushing back against the IRS and getting his property returned. He wants more and we'll see if he and his attorney are able to accomplish all of their goals. Stay tuned...
This case is very unique but the key is this business owner had a very competent and knowledgeable tax attorney, for more information on IRS Audits:
