Dairy farm fined $30,000 by IRS for depositing legally earned money in less than $10,000 increments

16 Aug, 2015 by Rachel Alexander

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A farmer in Maryland has been targeted by the IRS for depositing amounts under $10,000, in order to avoid excessive paperwork. Randy Sowers wasn’t doing it to launder money, but merely to avoid the hassles of paperwork meant to catch illegal activity. Yet the IRS is now treating him like a common criminal, seizing his money.

Fox News reports,

Sowers was targeted by the IRS under a controversial policy concerning the size of bank transactions. Banks are supposed to fill out extensive paperwork for every cash transaction over $10,000 – but to intentionally keep transactions under that threshold can be a violation called “structuring.”

Sowers, 61, found himself accused of this after becoming, it seems, a victim of his own success. As his company got bigger over the years and his employees went to more and more weekend farmers markets, they ended up with a lot of cash come Monday morning.

This is where the taxman trouble started, as he says the bank sought limited deposit amounts. “We’d had our festival and we get a lot [of] extra money,” Sowers explained. He said the bank teller told them they’d take their $12,000 in deposits, but they’d be “better off” if they kept it under $10,000, since “there is a lot of paperwork we have to fill out if you have to deposit more than $10,000.”

Under the “structuring” laws, doing what the teller suggested is technically a crime.

And so three years ago, Treasury agents showed up at the creamery with guns and badges. Sowers told them everything he could about his cash transactions, hoping to prove he wasn’t hiding anything. But as soon as they heard he sometimes had more than $10,000 and didn’t deposit all of it to stay under the reporting limits, they seized over $60,000 in his bank account.

Out of fear of a jail sentence and a nearly half-million dollar fine, Sowers settled — letting the IRS keep about $30,000 of his hard-earned money.

Sowers has decided to fight back. He testified on Capitol Hill in February, and now two congressman on the House Ways and Means Committee have sent a letter to Treasury Secretary Jack Lew requesting his money back. IRS Commissioner John Koskinen has said the IRS will discontinue the practice if there’s no indication of any illegal activity. So where is Sowers’ money? And was he targeted because he’s a farmer, who are generally conservative? Questions remain.