IRS steals man's life savings without charges

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Like many small retail operations, McLellan conducts much of his business in cash. But the Internal Revenue Service didn't like the way he deposited it in his bank account. On the advice of a bank teller, McLellan made most of his cash deposits in chunks of $10,000 dollars or less. There's less paperwork involved with sub-$10,000 deposits, and some companies have insurance policies that only cover up to $10,000 in cash losses.

It is, quite obviously, 100 percent legal to make make deposits of less than $10,000. But it is illegal to do so with the express purpose of avoiding the closer IRS scrutiny that comes with larger deposits -- a practice known as "structuring." McLellan had no reason to want to hide his cash, or to avoid scrutiny. His business was completely legitimate, and he paid his taxes in full. He was just trying to avoid some hassle for the bank tellers and everyone else involved.

Had IRS officials spoken with McLellan before raiding his account, they probably would have realized right away that he had nothing to hide. But the IRS didn't speak with him, and instead went directly to a federal judge to obtain a seizure warrant.

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Lyndon McLellan has owned and operated L&M Convenience Mart in rural Fairmont, N.C., for more than 10 years, according to the Institute for Justice. The institute is a national civil liberties law firm that advocates for asset forfeiture reform, and it represented McLellan pro bono in court. One day last July, a group of state and federal officers showed up at his store to inform him that they had emptied his entire bank account -- all $107,702.66 of it.

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