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Tyler Bass
Forbidden Knowledge TV
June 4, 2015

Before tax collectors targeted small-business man Lyndon McLellan for civil forfeiture, over 13 years he had amassed savings of over a hundred thousand dollars. Without trial or charge, the Internal Revenue Service confiscated the money after accusing of the North Carolina convenience store owner of structuring cash deposits in amounts too closely under the law’s $10,000 threshold.

In the wake of a scathing October report by “Last Week Tonight with John Oliver,” the IRS amended its own guidelines, pledging it would use civil forfeiture only in light of evidence citizens had obtained assets in the course of criminal activity -– an allegation they apparently never made against McLellan.

In February, just before a congressional hearing, the Institute for Justice brought McLellan’s plight to the attention of Rep. George Holding (R-N.C.) in the form of a legal filing the government had brought against McLellan. Confronted by Holding at a hearing, IRS Commissioner John Koskinen said he understood McLellan’s case to not be following the new guidelines.

Following their interaction, US attorney Steve West sent this message to McLellan’s attorney: “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.”

However public spotlight on the case does not appear to have hurt McLellan’s chances in his conflict with the IRS. In May the agency said it was returning all of his savings: more than $107,000 they seized from him.

But according to a report from the libertarian Cato Institute, “the government is still attempting to keep the interest earned by Mr. McLellan’s seized funds and refuses to reimburse Mr. McLellan for the costs of getting his money returned.”

The Institute for Justice says it will fight on to recover the interest and legal fees.

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Alexandra Bruce

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