ARNOLDS PARK, IOWA — A woman’s entire bank account was seized by the Internal Revenue Service — without so much as a criminal charge — because the agency claimed she deposited money “suspiciously.”

This is the plight of Carole Hinders, who has been running a Mexican restaurant for the last four decades. Accepting cash only from customers at the restaurant, she makes frequent cash deposits to her checking account.

As part of the federal government’s dragnet surveillance of the civilian population, everyone’s banking activities are monitored for “red flag” activities. One of these is frequent cash deposits totaling less than $10,000. Using this vague criteria, Ms. Hinders was thought to fit the profile of a financial criminal.

Acting on this red flag, the IRS seized Ms. Hinders’ entire checking account, containing roughly $33,000. This was done without a trial or a conviction, much less a criminal charge. She was afforded no presumption of innocence before being depleted of her wealth.

The robbery is considered legal, unfortunately, through a practice known as civil asset forfeiture. This practice involves the government confiscating cash, vehicles, land, or other property from suspected criminals — often without enough evidence to press criminal charges.

In this case, the IRS suspected that Ms. Hinders was “structuring” her deposits in strategic amounts in order to avoid federally mandated reporting that kicks in amounts greater than $10,000. The New York Times explained Ms. Hinders’ situation:

There is nothing illegal about depositing less than $10,000 cash unless it is done specifically to evade the reporting requirement. But often a mere bank statement is enough for investigators to obtain a seizure warrant. In one Long Island case, the police submitted almost a year’s worth of daily deposits by a business, ranging from $5,550 to $9,910. The officer wrote in his warrant affidavit that based on his training and experience, the pattern “is consistent with structuring.” The government seized $447,000 from the business, a cash-intensive candy and cigarette distributor that has been run by one family for 27 years.

There are often legitimate business reasons for keeping deposits below $10,000, said Larry Salzman, a lawyer with the Institute for Justice who is representing Ms. Hinders and the Long Island family pro bono. For example, he said, a grocery store owner in Fraser, Mich., had an insurance policy that covered only up to $10,000 cash. When he neared the limit, he would make a deposit.

Ms. Hinders said that she did not know about the reporting requirement and that for decades, she thought she had been doing everyone a favor.

Once targeted by the IRS, victims like Ms. Hinders are forced to either struggle to prove their innocence — a daunting task, especially with a seized bank account — or else cut losses and walk away from the money entirely.

The federal government began surveilling Americans’ banking activities under President Nixon with the The Bank Secrecy Act of 1970, which required that banks file “Currency Transaction Reports” to the IRS (specifically: FinCEN Form 112) on every individual who deposits or withdraws more than $10,000 in cash to or from a personal bank account on a given day. These reports indicate the financial activities that took place and include the individual’s bank account number, name, address, and social security number.

The financial dragnet was pitched to America as a way to catch tax evaders and money launderers. It actually marked the end of financial privacy and soon evolved into a tool used to harass innocent Americans. The IRS enjoyed a battery of new powers, which were increased several times thereafter.

In 2001, the USA PATRIOT Act expanded financial surveillance efforts to the so-called War on Terror. The Patriot Act was said to contain a “package of unconstitutional expansions of the financial police state,” according to one of bill’s few dissenters, Congressman Ron Paul of Texas. Among other things, the law prohibited bankers from informing customers that they had been reported to the IRS. Paul said the bill had “more to do with the ongoing war against financial privacy than with the war against international terrorism,”

Paul summarized his objections in a statement to Congress prior to the bill’s passage:

“Among the most obnoxious provisions of this bill are: expanding the war on cash by creating a new federal crime of taking over $10,000 cash into or out of the United States; codifying the unconstitutional authority of the Financial Crimes Enforcement Network (FinCEN) to snoop into the private financial dealings of American citizens; and expanding the ‘suspicious activity reports’ mandate to broker-dealers, even though history has shown that these reports fail to significantly aid in apprehending criminals. These measures will actually distract from the battle against terrorism by encouraging law enforcement authorities to waste time snooping through the financial records of innocent Americans who simply happen to demonstrate an ‘unusual’ pattern in their financial dealings.”

The IRS has been steadily increasing its use of preemptive civil asset forfeiture — with agency seizures up 460% from 2005 to 2012, according to data from the Institute for Justice. Every year, scores of Americans are targeted by the IRS for dubious reasons and depleted of their wealth in the name of law enforcement and national security. The extensive federal powers are very aptly described as those found in a “financial police state,” not a free society.