Hardworking dairy farmer Randy Sowers was making a bank deposit in 2012 when the teller suggested he keep his business deposits under $10,000 to avoid extra paperwork. Sowers, owner of South Mountain Creamery in Middletown, MD, followed the bank's advice and subsequently made a number of deposits just under $10,000.
It wasn't long before armed federal agents showed up at his door. They accused Sowers of “structuring” cash deposits in violation of the Bank Secrecy Act to keep totals below reporting requirements, a practice used by drug dealers, money launders, and other criminals.
The IRS immediately confiscated $63,000 from Sower’s bank account, and he faced the possibility of losing everything, including his dairy farm and creamery.
Sowers wasn’t alone—according to the Institute for Justice in an article published in the Farm Journal, “...the IRS grabbed over $242 million in 2,500 suspected structuring cases from 2005-2012. Significantly, at least a third of the 2,500 cases were triggered by cash deposits below $10,000 and contained no other criminal allegations.”
Sidebar: Do you hear that whirring sound? It's the Framers spinning in their graves at yet another chilling example of the government's self-appointed authority to insert itself into every aspect of our lives, including how we deposit money in our bank accounts. A Convention of States would prevent this type of abuse by providing a check on federal power and restoring it to the levels envisioned by the Framers.
Rather than roll over and let the government confiscate his assets and treat him like a criminal, Sowers decided to fight back. First, he went to the press, and then his case was picked up by the Institute for Justice, a legal advocacy group.
This kicked off a four-year legal ordeal with the IRS, an agency unaccustomed to being challenged. To make matters worse, the prosecution of Sowers was backed by none other than Maryland U.S. Attorney General Rod Rosenstein. He wanted to make an example of Sowers, because he had gone to the media.
Undaunted, Sowers spoke out whenever and wherever he could, and he eventually testified before the House Ways and Means Committee. When the IRS’s practices came under Congressional scrutiny, the IRS returned Sower’s settlement sum of $29,500, and also returned another $43 million from 618 other structuring cases from 2007 to 2013 where money was confiscated with no underlying evidence of criminality.
Sidebar: The IRS’s overzealous confiscation of financial assets in currency structuring cases is a particularly egregious example of federal overreach when it targets citizens and small businesses that have done nothing illegal.
Despite the lengthy, stressful legal process, Sower's efforts paid off. In 2019 the Taxpayer First Act was signed into law, including the Clyde-Hirsch-Sowers RESPECT Act. That law restricts forfeiture only to currency-structuring cases involving illegal activity.
"My story could belong to any farmer or business owner,” Sowers says in the Farm Journal article. “People have almost no idea what the feds will do when they want to hurt you. What kind of power-hungry bureaucrats do we have when guilt or innocence plays no role in the system?"
The COS focus on creating well-defined limits on federal jurisdiction would rein in the expansion of bureaucratic power in Washington and help prevent such abuses from occurring. This can only be accomplished by shrinking the size and power of a federal government that is already too large and too powerful, and that can only be accomplished by a Convention of States.
