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#1732254 - 08/17/12 02:41 PM IRS Seizures & Question About How Records Obtained
CantBeShocked Offline
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MS
Question - IRS has done a seizure against a customer who had SARs filed on multiples times for structuring. Now, the customer has an attorney and is questioning the seizure, how the IRS knows about his bank records, etc.

My question is this - IF YOU KNOW - how does your local law enforcement (IRS)answer the question when it comes up by a customer's defense attorney as to how the IRS came into possession of his bank records?

They can't reveal a SAR so do they send a subpoena for duplicate records to cover themselves? Or just say "well, you know the government knows and has access to everything"......but then if a customer is knowledgeable about the RIght to Financial Privacy, then they know that response is bogus.

Just thinking and seeing what everyone else is seeing. It's been an issue lately here because our local IRS is increasing their response to SAR filings.
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#1732257 - 08/17/12 02:43 PM Re: IRS Seizures & Question About How Records Obtained CantBeShocked
CantBeShocked Offline
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To further clarify I've even had one agent want to send us a summons and we said ABSOLUTELY NOT. Because that doesn't answer how the records were gotten by law enforcement - even if legal gets on stand and verifies that yes, those are legitimate bank records. It would put the bank in the middle of questioning....and we don't want to be in that position.
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#1732265 - 08/17/12 02:50 PM Re: IRS Seizures & Question About How Records Obtained CantBeShocked
Elwood P. Dowd Offline
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Your bank files a SAR. An LEA is interested. They come and pick up the supporting documentation and get very interested, interested enough to prosecute.

If the system is working properly, they issue a subpoena or summons for the documentation they already obtained from you and anything else they can think of. Your customer is notified of the demand and has a chance to fight it. (He will lose.) Thus, when the documents provided in response to legal compulsion are introduced into evidence in the prosecution it is very clear how the LEA came into their possession.

If documentation is entered into evidence, but the record shows no paper trail for how the LEA obtained it, then it should be very, very obvious to the customer's attorney that 1) your bank filed a SAR and 2) gave the supporting documentation to the LEA. Your bank has been outed.

Say "Thank you" to any offer of a subpoena or summons for supporting documentation. The LEA is covering your assets, not theirs. They already had the evidence they need and they obtained it legally.
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#1732336 - 08/17/12 04:18 PM Re: IRS Seizures & Question About How Records Obtained CantBeShocked
WonderWoman Offline
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I echo Ken here. You should absolutely request Subpoenas and Summons if they're going to prosecute.

That way - all you say is - when presented with verified legal requests, by law, the bank is obligated to produce records.

How did they know to subpoena you? "Gosh, I have no idea ... we get subpoenas all the time" and "any questions about your case should be directed to your attorney".

& if the attorney asks questions? "any questions should be directed to the courts or through a subpoena".

& if the attorney subpoenas for SAR records? Notify your regulator.
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#1732338 - 08/17/12 04:20 PM Re: IRS Seizures & Question About How Records Obtained CantBeShocked
WonderWoman Offline
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Originally Posted By: The Real Mobo
It's been an issue lately here because our local IRS is increasing their response to SAR filings.



If you are seeing an issue, contact the lead IRS agent or prosecuting attorney in these cases. I have a great relationship with mine and they do everything in their power to protect us. Because they know if they burn us, we'll stop helping.
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#1732357 - 08/17/12 04:47 PM Re: IRS Seizures & Question About How Records Obtained CantBeShocked
c@c Offline
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I have a question on a somewhat related note. Is anyone aware of a situation where the bank could refuse to honor the seizure because we have a UCC Financing Statement against the funds in the checking account to secure a loan to the borrower? Just wondering if we would be allowed to exercise our right of offset against those funds instead of handing them over to the IRS. Any thoughts?

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#1732376 - 08/17/12 05:08 PM Re: IRS Seizures & Question About How Records Obtained CantBeShocked
WonderWoman Offline
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WonderWoman
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I've heard of the IRS seizing because they could prove the item or money securing the loan was obtained illegally.

It's a horror story I feed to my loan officers on a frequent basis.

You would want to talk to your bank attorney
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#1732383 - 08/17/12 05:14 PM Re: IRS Seizures & Question About How Records Obtained c@c
Elwood P. Dowd Offline
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Refuse? Please forget about that altogether.

Even with a simple levy, the IRS expects you to deliver the collateral and then demonstrate that your claim is the superior one. They will decide whether or not you get it back. If you disagree with their decision you can go to federal court.

With a seizure warrant you are dealing with a pretty serious bunch of people who do what they are doing much more frequently than you do. Compared to a levy, you just graduated to big league ball.

Involve your legal counsel ASAP.
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