The problem is that a lot of small businesses just naturally make a lot of transactions in cash and then have to deposit that money in their accounts.

Well, the problem is an aggressive government more interested in taking from citizens than proving wrongdoing.

Many small business insurance policies only cover <$10,000 in cash on hand. So plenty of legit businesses get flagged for trying to maintain their coverage and minimize risk.

I worked for a record store in college and we had a Ticketmaster machine (back when they were actual ticket printers). We could only accept cash for tickets, per Ticketmaster policy. So on days that big concerts and sporting events went on sale (like The Grateful Dead, Charlotte Hornets, etc) we would make several large deposits of this cash throughout the day to keep our theft risk under our insurance limit. Under modern structuring/forfeiture laws, we could have lost all that money to the feds and still owed Ticketmaster for the sales we made - because the insurance policy had an exception for government seizure.

I would think the vast majority of cash deposits are under $10k, so I assume what they mean is repeated deposits of close to, but slightly under, $10k.

You would think that, but that's not what is happening. A gas station was doing ~$800 per day and got grabbed. This is the type of stuff the really makes people lose faith in a rational system.

They're bureaucrats, I don't respect them.

Also called "structuring" - intentionally making small transactions to avoid the oversight that comes with large ones [0].

[0]: https://en.wikipedia.org/wiki/Structuring

And the law in question specifically says

No person shall, for the purpose of evading the reporting requirements of section 5313 ...

But the report indicates that the IRS made no attempts to determine whether the supposed "structuring" was done for the purpose of evading the reporting requirements, and simply ignored any evidence the showed that the pattern of deposits had a legitimate explanation.

Is "for the purpose" predefined ? If not, we have only ourselves to blame for including such subjective terms in such serious matters.

And now that you know about it, you too can found guilty of structuring! ;)

You didn't need to know about it to be guilty of structuring. I'd posit that most folks who get hit by this crap likely didn't know about it until their money was gone.