The IRS Raided Their Store and Auctioned Everything with No Notice. Now They Are Fighting Back.

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Mii’s Bridal & Tuxedo, a small business in Garland, Texas, was raided by the IRS. The contents of the store, including everything from wedding gowns and tuxedos to sewing machines and various fixtures, were sold at auction to cover an alleged tax debt. However, the owners claim the agency violated its own procedures and subsequently filed a lawsuit.

As reported by Dallas News, Mii’s had been in operation for decades. The business was owned by Tony and Somnuek Thangsongcharoen, an elderly couple who immigrated from Thailand.

The sale, hosted by the IRS, brought in approximately $17,000, with the funds being used to cover a portion of the reported $31,400 tax debt obligation the Thangsongcharoen’s allegedly owe.

Tony and Somnuek Thangsongcharoen filed a lawsuit stating that they were never informed of any violations of the law and are disputing that any taxes are owed to the IRS. They are suing for more than $1.8 million and accusing the IRS of violating agency procedures during the seizure of their assets.

When agents arrived on the scene, they stated the couple could provide them with a check for $10,000 to avoid the auction. When they didn’t provide the funds, “the agents auctioned off, before their very eyes, the family’s entire life savings for pennies on the dollar,” says the lawsuit. The inventory was reportedly worth over $615,000.

Based on information contained in the lawsuit, an IRS agent obtained authorization for the action from a US district court. An affidavit had been submitted.

However, the judge’s order reportedly had limits on what items could be sold. The lawsuit alleges that additional items outside of the judge’s order, including video game consoles, a television, and a Vietnam veteran’s hat that was brought into Mii’s to have badges of honor added, were also seized.

The sale was able to occur quickly based on a special law. If the items taken could “perish or waste” or lose significant value, the IRS doesn’t have to post advance public notice or wait a minimum of 10 days before auctioning off the goods. The same option for a speedy sale also applies if storing the items would result in a “great expense” for the agency.

The lawsuit accuses agents of valuing the inventory at around $6,000, allowing them to claim storing the items would cost more than the good were worth. The lawsuit states that the $6,000 valuation comes to approximately $4 per dress based on the number of gowns in the store at the time.

The government claims the couple owes taxes for the 2005, 2008, and 2010 tax years. The suit asserts, “The taxpayer’s tax returns on file with the IRS reflect that the tax year at issue generated a new operating loss carryover, not a taxable amount.”

In addition to disputing the tax amount owed, the lawsuit claims certain seizing agents acted improperly during the auction, including purchasing items.

Curtis Smith, an attorney for the federal government, denied accusations that an agent bought something. However, he did state an “off-duty Dallas Police officer in plain clothes did bid on and purchased one small item.”

Dallas police officers did assist with the raid.

According to the lawsuit, “Tony and Somneuk were left destitute – everything that they had built since immigrating to the United States and beginning their business in 1983 wiped out before their eyes.”