Turns out that there really is an IRS scandal - it's just not the one the Republicans have been bitching about for years. I'd link to the amazing story about it in the International Edition Of The New York Times yesterday, except that, you know, paying 3 euros for the print edition does not give me access to the online edition But, I'll outline it and it is super creepy.
1. When government agencies seize bank accounts they get a percentage of the money seized - bulking up their budgets. 2. They don't need to prove a crime has happened just that a pattern that cirminals have used before has occured meaning there might be a crime or their might not. It is then up to the person to prove they are not a criminal before they can get the money back. 3. Criminals often make cash deposits of just under $10,000 to avoid IRS reporting requirments. Therefore anyone making three or more such deposits is using a pattern that mimics criminal behavior. 4. Small businesses need insurance. 5. Small business insurance generally only insures up to $10,000 in cash on premises. 6. Many small businesses - particularly bars and small grocery stores - therefore head straight to the bank to make a cash deposit when their computers tell them they have more than $8,000 in cash on hand. 7. This creates a situation where the IRS claims that the person is mimicking criminal behavior - and they seize all the money in the acccount. 8. Since it costs roughly $20,000 in legal fees to fight the IRS and the the IRS knows this, the IRS then comes in and makes an offer to give you 50 percent of the money back if you agree not to fight them in court. If the IRS has seized, say, $30,000 from your bank account, letting them keep $15,000 is a better deal than playing $20,000 to a lawyer to get it back. 9. The IRS pockets their percentage and then goes on to seize another small business owner's bank account. 10.The IRS confirmed to the New York Times that this was their policy and that they used it against many thousands of small businesses as a way to increase their budget during the recession.