The IRS vs. the Free Society
by Jacob G. Hornberger
My favorite quote of all time is by Johann Von Goethe: “None are more hopelessly enslaved than those who falsely believe they are free.” The quote perfectly encapsulates the plight of the American people.
Most Americans honestly believe they are a free people. This belief is inculcated into them from the time they enter the first grade until they graduate from high school. The indoctrination is the greatest success story of the public (i.e., government) school system, especially since people don’t even realize they have been indoctrinated during their lives as adults.
We see this especially when people thank the troops for defending their freedom. When they do that, you can see it in their eyes — they have absolutely no doubts that they are a free people and that the troops are defending their freedom.
Let’s now consider the IRS. As the New York Times recently reported, the IRS has been seizing bank accounts belonging to ordinary Americans who, by the IRS’s own admission, have committed no crimes. An IRS agent simply walks into a bank, orders the bank president to hand over the money in a person’s bank account, and walks out with the loot. The money goes into the general coffers except that the IRS gets to keep a percentage of the loot for itself.
There is no advance notice provided to the customer. The bank is prohibited from warning its customer of what is taking place. There is no hearing before a judge prior to the seizure. The IRS simply takes the money and walks away. The victims are not charged with a crime.
What’s the justification for these IRS confiscations of innocent people’s money? It revolves around the drug war, the much-ballyhooed war that has gone on for decades and that has produced nothing but failure, corruption, death, and destruction.
As one of the many interventions that have been enacted over the past several decades, in the hopes of finally winning the drug war, the feds required banks to report deposits in excess of $10,000 into their banks. American bankers were effectively converted into snitches for the government.
It didn’t take drug dealers long to figure out that it wouldn’t be a good idea to deposit more than $10,000 into banks. Thus, the regulation became one whereby the feds were able to learn about large deposits of money being made by ordinary Americans who had nothing to do with the drug trade. So, what began as a drug-war measure turned into a massive infringement on the financial privacy of Americans who were not involved in the drug trade.
To ensure that drug dealers didn’t simply make several deposits of less than $10,000, so that the bank’s reporting requirements wouldn’t be triggered, the feds enacted another intervention — one called “structuring.” They said that it would be illegal to structure a large deposit by dividing it into smaller deposits.
Not surprisingly, lots of small business owners—that is, people who had nothing to do with the drug trade–had no idea that they would ultimately pay the price for this particular drug-war intervention. When many of them made smaller deposits for various non-drug-related reasons, the IRS decided to pounce and take their money.
For example, some of the business owners have insurance that covers no more than $10,000 loss from theft. So, as the amount of cash in the store would exceed $10,000, they would have employees making several deposits in the bank during the course of the day. The IRS, claiming structuring, seized their money.
One woman thought she was doing the bank a favor by making smaller deposits, thereby sparing the bank from having to fill out the paperwork necessary to fulfill its role as government snitch. For her good deed, the IRS seized the money in her bank account. She had violated the structuring law, even though she was not involved in the drug trade, which was the original justification for enacting the structuring law.
When people complained, the IRS response was: Sue us if you don’t like it. The problem, of course, was the suing requires hiring a lawyer, which takes money, and the IRS has the person’s money. When people did hire a lawyer, by the time they won the case, a large percentage of the money would be gone in attorney’s fees.
Of course, the IRS’s actions are no different from those of the DEA and other drug-war enforcement personnel who are stopping ordinary people on the highways of America and simply stealing their money and not charging them with a crime.
How in the world is such conduct reconcilable with the principles of a free society?
Answer: It’s not. People who live in a society in which the government can take their money without advance judicial notice and a judicial hearing are not living in a free society.
One of the fascinating aspects of this process is that when the Times brought what the IRS was doing to public attention, the IRS confessed that it had been doing wrong by seizing innocent people’s money and promised to stop doing so except in “exceptional circumstances.” Unfortunately, the IRS failed to define “exceptional circumstances” and also declined to give all those innocent people their money back.
Of course, the problems with respect to freedom and the free society go much deeper than IRS seizures of people’s bank accounts. The reason that the IRS is desperately looking for cash — and the reason the president and Congress are as quiet as church mice about all this — is because of the voracious, ever-growing financial needs of the welfare-warfare state, the monstrosity that depends on the income tax and the Federal Reserve to fund it.
Thus, simply reining in the IRS and its seizures of innocent people’s money still doesn’t achieve the free society. To achieve a genuinely free society necessarily entails an abolition of the income tax, the IRS, and the Federal Reserve, an end to the drug war, and the dismantling of the entire welfare-warfare state apparatus that statists have grafted onto our original governmental structure.
Meanwhile, Americans continue to remain convinced of how free they are and continue to thank the troops for defending their freedom, including the “freedom” to have their money confiscated by the IRS, the “freedom” to be punished by the DEA for ingesting the wrong substances, the “freedom” to be forced by the welfare state to share their money with others, and the “freedom” to be incarcerated, tortured, and assassinated by the warfare state.
What greater serf than the serf who genuinely believes he’s free?