Chuck Grassley (file photo)

Chuck Grassley (file photo)

Iowa Senator Chuck Grassley says he’s looking into the federal government’s use of civil forfeiture laws after learning how the IRS seized the bank account of a restaurant owner in northwest Iowa.

The Republican served on the IRS Restructuring Commission, which sought to end the agency’s “harassment” of small businesses back in 1998.

“Well, here we are 15 years later and we’re still messing around with the same problems,” Grassley says. In May 2013, the IRS seized almost $33,000 from Carole Hinders, who has operated Mrs. Lady’s Mexican Food in Arnolds Park for 38 years. The restaurant only accepts cash and the IRS used civil forfeiture to seize Hinders’ bank account, claiming by making small deposits, she was evading a federal law that requires banks to report cash deposits greater than $10,000.

Officials with the IRS have responded to Grassley’s inquiry about the matter. “They say that they’re going to reconsider their policy and maybe make some changes,” Grassley says. The Washington, DC-based Institute for Justice is helping Hinders with her case. The law firm reports federal law enforcement agencies — using civil forfeiture — can take cash, cars and other property without charging the property owner with a crime.

Grassley says the IRS plays a role in fighting money laundering and other criminal activity, but it should treat business owners fairly.

“Maybe the IRS is smart enough to correct their own silly actions that they’re taking, but whatever the case is, we’ve got to be on top of the IRS once again,” Grassley says.

The 67-year-old Hinders, who describes her last year as “Hell,” has borrowed money and used credit cards to pay bills and keep her restaurant in business. The New York Times recently featured a story about Hinders’ plight on its front page.