July 27, 2016
Do you own a dog? You could face six months in federal prison If you walk it on federal lands on a leash longer than six feet in length.
Do you have a bank account? If you deposit or withdraw more than $10,000 in cash over multiple transactions, you could be imprisoned for up to five years. You could also lose every penny in the account, under the theory it “facilitated” your crime.
Do you have foreign investments? If you neglect to tell Uncle Sam about them, you could face draconian penalties. Forget to file just one form? You could face a $10,000 penalty per account per year.
There’s no requirement that you know any of these crimes exist for you to be found guilty of violating them. After all, “Ignorance of the law is no excuse.”
Given that fact, you might think that Uncle Sam would make it easy to understand exactly what’s legal and what’s not. Think again.
In 1790, the first set of federal criminal laws contained a grand total of 20 crimes. Since then, the number of federal crimes listed has grown like cancer. No one knows how many federal crimes exist, although a 1998 study from the American Bar Association concluded the total was likely “much higher” than 3,000.
That’s just the tip of the iceberg. There’s a little-known and poorly understood process that federal agencies undertake to literally make law. In some cases, if you violate an “administrative law” a federal agency creates out of thin air, you can be imprisoned. Indeed, the number of federal regulations carrying criminal penalties may be as high as 300,000.
It’s no wonder the US has the world’s largest prison population. More people rot in local, county, state, and federal prisons in the US than in all other developed countries combined. Over 2.2 million Americans currently live in some type of jail.
Given these facts, you could be forgiven for thinking that Congress might put the brakes on penning new federal criminal law. Unfortunately, that’s not happening. Indeed, the pace of federal “criminalization” is accelerating. A 2008 study concluded that since the start of 2000, Congress created at least 452 new crimes. That’s more than one a week.
Since then, I see no indication that this growth has slowed. For instance, last year, I learned of a new requirement for US persons with certain international investments to report them to the Department of Commerce’s Bureau of Economic Analysis (BEA). Until 2014, you needed to file this form only if the BEA “invited” you to do so. But in November 2014, the BEA issued final regulations making it mandatory to file this form – and imposing civil and criminal penalties if you don’t.
When was the last time you received an official notification from the BEA inviting you to file this form? I’ve never received one – I only learned about this requirement when my accountant warned me about it.