Lyndon McLellan is getting his money back.

McLellan, a North Carolina convenience store owner, woke up one day to find the IRS had seized his career savings — all $107,000 of it. The agency had flagged McLellan for a practice referred to as structuring or “smurfing” — making multiple bank deposits of less than $10,000 in cash in order to circumvent the legal requirement to fill out a disclosure statement.

McLellan had been making small deposits, incrementally growing his savings. But he wasn’t illegally trying to cram a pile of money, bit by bit, into a savings account, a disclosure-skirting practice the law was ostensibly created to address.

In his case, there never was a pile of money. McLellan had simply been making regular deposits of what he earned at his store — as he was earning it.

The IRS and the U.S. Department of Justice didn’t care about any of that — at least not at first. Despite having changed its civil asset forfeiture policy to end seizures like the one McLellan endured, the agency wouldn’t return the money. It had seized McLellan’s funds only months before the policy change went into effect, and there was no law saying the IRS had to give him any consideration. Notably, McLellan was never charged with any crime throughout his ordeal.

The IRS did offer McLellan a nice insult of a deal: they’d drop their civil forfeiture “case” and return half the money, in exchange for McLellan to drop the campaign to have the full amount — an amount he amassed over 13 years operating a rural convenience store — returned.

The Institute for Justice (IJ), a nonprofit that advocates for people whose civil liberties have been placed in jeopardy at the hands of government, took up McLellan’s case. IJ’s pro bono attorneys understood that public opinion on asset forfeiture had been recently raised by other, similar cases in different parts of the country, so it produced a video telling McLellan’s story. It was widely seen and shared on social media.

Fast forward two weeks: the IRS has backed down, pledging to return all $107,000 of the dollars McLellan earned and saved.

“Yesterday, just two weeks after the Institute for Justice took on the case and brought it to the attention of the nation, the IRS and Department of Justice moved to voluntarily dismiss the case and give Lyndon back 100% of his hard-earned money,” IJ reported May 14.

“… Now, in moving to drop the case almost half a year after the IRS announced its policy change, the government cited the change in policy as its reason for backing down.”

IJ notes that McLellan hasn’t been made completely whole.

He’s “still out tens of thousands of dollars, thanks to the government’s actions,” the report states. “Lyndon paid a $3,000 retainer to a private attorney before IJ took the case on pro bono, and he also paid approximately $19,000 for an accountant to audit his business and to provide other services to help convince the government he did nothing wrong.”

The government isn’t offering to reimburse McLellan those expenses, nor is it offering to pay him interest on the money it stole/borrowed.

McLellan told IJ he was just happy his ordeal was ending, and he expressed a hope that his case would serve as a preventive lesson.

“What’s wrong is wrong, and what the government did here is wrong,” he said. “I just hope that by standing up for what’s right, it means this won’t happen to other people.”

Published by Ben Bullard on personalliberty.com