Imagine being informed that the Internal Revenue Service has seized your bank account. They don’t accuse you of any crime, they simply acted because your account, used for your small business, has too much money in that was deposited in increments of less than $10,000 – the amount that requires the transaction to be reported to the IRS.

That may sound absurd, but it’s happening across the country.

The New York Times introduces us to Carole Hinders, an Iowa woman who owns a small, cash-only restaurant. Last year she had her checking account, all $33,000 of it, seized by the IRS. Not because she didn’t pay taxes on her business (she did), and not because she was suspected of any crime (she wasn’t), but because “she had deposited less than $10,000 at a time, which they viewed as an attempt to avoid triggering a required government report.”

How can the IRS do this when not only no crime has been alleged, but none is suspected? The Times reports:

Using a law designed to catch drug traffickers, racketeers and terrorists by tracking their cash, the government has gone after run-of-the-mill business owners and wage earners without so much as an allegation that they have committed serious crimes. The government can take the money without ever filing a criminal complaint, and the owners are left to prove they are innocent. Many give up.

Hinders is not alone. According to the Institute for Justice, the IRS “made 639 seizures in 2012, up from 114 in 2005. Only one in five was prosecuted as a criminal structuring case.”

After being contacted by the Times this week, the IRS said it would change this practice, and switch its focus “on cases where the money is believed to have been acquired illegally or seizure is deemed justified by ‘exceptional circumstances.’”

In a written statement, IRS chief of Criminal Investigations, Richard Weber, said, “This policy update will ensure that C.I. continues to focus our limited investigative resources on identifying and investigating violations within our jurisdiction that closely align with C.I.’s mission and key priorities.”

Depositing money specifically to evade the $10,000 threshold for scrutiny will still remain illegal, but the IRS will exercise discretion when it comes to small and cash-only businesses where no criminal activity is alleged or suspected. These new guidelines will only apply to future cases, not past seizures.

But the IRS is not alone in exercising this power. Law enforcement agencies are incentivized to search for transactions, illegal or not, that could qualify for seizure by the fact that any agency that triggers such seizures gets to keep a portion of the money forfeited.

The Times reports critics saying, “this incentive has led to the creation of a law enforcement dragnet, with more than 100 multiagency task forces combing through bank reports, looking for accounts to seize. Under the Bank Secrecy Act, banks and other financial institutions must report cash deposits greater than $10,000.”

Many innocent people can’t afford the legal fight to get their money back. “The median amount seized by the I.R.S. was $34,000, according to the Institute for Justice analysis, while legal costs can easily mount to $20,000 or more.”