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The IRS seized $107,000 from this business owner for making too many small cash deposits

If you deposit more than $10,000 in cash, your bank is required to file a form with the authorities reporting the transaction. But the law also makes it illegal to "structure" deposits — depositing cash in amounts under $10,000 to avoid triggering the reporting requirement.

But aggressive enforcement of these laws can ensnare small business owners whose only crime is dealing in cash. This video tells the story of Lyndon McLellan, a convenience store owner in rural North Carolina who had $107,702 seized by the IRS. The agency hasn't charged McLellan with any crime, but under controversial civil asset forfeiture rules the burden of proof is on him to prove he didn't violate the "structuring" laws. The video was made by the Institute for Justice, a libertarian public interest law firm that is representing McLellan.

The New York Times points out that business owners can have legitimate reasons for keeping their cash deposits under $10,000. For example, some store owners have insurance policies that only cover cash losses up to $10,000.

It won't be easy for McLellan to get his money back. Many forfeiture targets don't bother to contest seizures under civil forfeiture laws because legal fees would exceed the value of what was taken. But with IJ's help, he might be able to recover the money the IRS took from him.

The IRS declined to comment on the case, citing taxpayer privacy laws.