Bipartisan Bill Would Force IRS to Show Small Businesses RESPECT

NTU urges all Representatives to vote “YES” on H.R. 5523, the “Clyde-Hisch-Sowers RESPECT Act.” This bipartisan legislation, introduced by Representatives Roskam (R-IL) and Crowley (D-NY), would rein in abusive Internal Revenue Service (IRS) actions.

“Clyde-Hisch-Sowers” are all small business owners who had their bank accounts wrongfully seized by the IRS. Unfortunately, these individuals represent a serious and growing problem on the part of the IRS that has affected many small business owners across the country, including farmers, convenience store and bakery owners – even a neurologist.

A 2015 report from the Institute for Justice, a not-for-profit organization that has defended a number of taxpayers against IRS abuse, found that from 2005-2012 the IRS seized $242 million in 2,500 cases. More than one-third of those cases were a result of “structuring” violations that were based on the assumption that an individual was depositing cash in amounts under the arbitrary $10,000 threshold in order to avoid triggering mandatory reporting requirements on the part of the bank. In these instances, the IRS does not have to convict or even charge a victim with wrongdoing before seizing property and individuals face a costly, uphill battle to retrieve their assets during which time they may fall behind on their mortgage, rent, and payroll.

H.R. 5523 would require the IRS to show probable cause before seizing assets. The IRS claims that that it has already made this policy change, but it’s essential that taxpayer protections be codified in order to avoid exposing such fundamental rights to the administration’s whims.

Roll call votes on H.R. 5523 will be included in our annual Rating of Congress and a “YES” vote will be considered the pro-taxpayer position.

If you have any questions, please contact NTU Federal Affairs Manager Nan Swift at (703) 683-5700