IRS Seizes Iowa Restaurant’s Money Despite ‘Not Doing Anything Wrong’, Case Gets National Attention

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ARNOLDS PARK, Iowa – A northwest Iowa restaurateur’s fight with the Internal Revenue Service is gaining national attention.

In August of 2013, the owner of Mrs. Lady’s Mexican restaurant in Arnolds Park, Carole Hinders, had about $33,000 seized from her checking account by the IRS despite not committing a crime.

The reason? She had been depositing less than $10,000 at a time.

“How can this happen?” Hinders told the New York Times. “Who takes your money before they prove that you’ve done anything wrong with it?”

Larry Salzman with the Institute for Justice, who is helping Hinders, explained the case in a video.

“Federal law requires banks to report cash deposits greater than $10,000. The federal government used civil forfeiture to seize Carole’s bank account, claiming by making small deposits, she was evading that requirement.”

Civil asset forfeiture is when the government takes money or property without proving the person is guilty of a crime. They’re only suspected of it.

Sen. Rand Paul has introduced an act to change the law.

“A dismaying combination of perverse incentives, unfair laws, and lack of oversight makes civil forfeiture one of the most dangerous and blatantly unconstitutional policies America has ever seen.” Sen. Paul wrote using Hinders’ case as an example.

That can’t come quick enough for Hinders, who has run the cash-only restaurant for 38 years. She has described the situation as “a year from Hell.”

“I didn’t do anything wrong. They took my money and I don’t think they should have the right to do that. At least they should have to prove that I did something wrong before they take my money,” Hinders said.

According to KIWA Radio, Hinders has sold the restaurant and will be closing the doors this week.

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