IRS Seizes $107,000 From Innocent Small-Town Convenience Store Owner For 'Structuring' Deposits

IJ.org
May. 02, 2015

Lyndon McLellan has spent more than a decade running L&M Convenience Mart, a gas station, restaurant, and convenience store in rural Fairmont, North Carolina. Then, one year ago, without any warning, agents from the IRS seized his entire bank account, totalling more than $107,000.

With that, Lyndon entered the upside down world of civil forfeiture, where the government can seize and keep ordinary Americans’ property without ever charging them with a crime.

The IRS and Department of Justice are pursuing forfeiture of Lyndon’s money despite a recent policy change designed to prevent precisely these kinds of cases. In October 2014, the IRS announced that (absent “exceptional” circumstances) it would pursue forfeiture in cases like Lyndon’s only where there was evidence that the money being seized was derived from illegal activity. The U.S. Department of Justice announced a similar policy change in March 2015.

In February 2015, during a hearing of the U.S. House of Representatives Ways & Means Oversight Subcommittee, North Carolina Congressman George Holding told IRS Commissioner John Koskinen that he’d reviewed Lyndon’s case—without specifically naming it—and that there was no allegation of the kind of illegal activity required by the IRS’s new policy. The IRS Commissioner responded, “If that cases exists, then it’s not following the policy.”

When news of the IRS Commissioner’s statement got back to the United States Attorney in charge of Lyndon’s case, he advised Lyndon’s attorney and accountant that he was “concerned” that Lyndon’s case document was provided to Congress, and that:

Whoever made [the document] public may serve their own interest but will not help this particular case. Your client needs to resolve this or litigate it. But publicity about it doesn’t help. It just ratchets up feelings in the agency. My offer is to return 50% of the money. The offer is good until March 30th COB.

Under these new policies, the government should not be pursuing forfeiture of Lyndon’s bank account. But the government has refused to back down, and is actively pursuing the forfeiture of Lyndon’s money.

Lyndon is unwilling to give the government a single penny of his hard-earned money. As he puts it, “It took me 13 years to save that much money, and it took fewer than 13 seconds for the government to take it away.”

Lyndon did nothing wrong. That is why he has teamed up with the Institute for Justice to fight this shocking abuse of power, to get his money back and to make sure the government does not do this to anyone else.