IRS shuts down mom and pop dressmaker

Hours later, Mii’s Bridal & Tuxedo was out of business after serving customers for decades. Its entire inventory of wedding gowns and dresses as well as sewing machines and other equipment were sold at auction.
The hastily-called sale held inside the store netted the IRS about $17,000 — not enough to cover the roughly $31,400 in tax debt alleged, court records show. The balance is now likely unrecoverable.

The owners, Tony Thangsongcharoen, 68, and his wife, Somnuek Thangsongcharoen, 72, are fighting back. The Garland couple sued the government in federal court in Dallas in March for more than $1.8 million, alleging the IRS violated its own procedures during the tax seizure at the small storefront on Garland Road in March 2015.

“The agents auctioned off, before their very eyes, the family’s entire life savings for pennies on the dollar,” the lawsuit said.

The IRS claimed that the businesses intentionally tried to evade federal bank reporting requirements by making cash deposits just under the $10,000 limit. Critics say the IRS is being heavy-handed for seizing money from businesses when they haven’t been charged with a crime.

The couple’s attorney, Jason Freeman, received numerous internal documents from the IRS following a Freedom of Information Act request about the incident.
The lawsuit says one document received is a written “directive” from an IRS supervisor to “shut down this failing business.”

Regarding the speed of the sale, the government said in legal filings that the IRS used a special law that allows for a streamlined procedure if the agency determines the goods seized could “perish or waste” or become greatly reduced in value.
As a result, the IRS didn’t have to post advance public notice of the Mii’s sale or wait at least 10 days before selling the goods, as is normally required.
The provision also says a speedy auction can be used if storing the property would cost the IRS “great expense.”

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