When is a bank required to report a deposit to the IRS?
I was hoping someone would clear this up for me because I heard it both ways. I was wondering when do banks report your deposits to the IRS whether it be check or cash.
1. One person told me that if a person's deposit is $10k in CASH or more, it gets reported to the IRS by the bank 2. I mentioned it to a person at the bank and they said if it's CASH over 10k it gets reported; however, a check in any amount would not get reported to the IRS.
I heard of people who deposting in 9k amounts 2-3 times on different days to avoid a red flag for the IRS.
Anyone know for certain which is correct?
My brother let money to a cousin (interst free) about 20k and I was wondering once he pays him back, does that get reported? Just seems like a headache if it does raise red flags etc. Edit by Moderator: Thank you for participating in the forums. However, this topic has been covered in a recent post Here.
posted: Mar. 3, 2004 @ 11:05p
posted: Mar. 3, 2004 @ 11:18p
I think this is due to the patriot act, where feds wanna know the source of your cash (ie. drug deals)
The Treasury Department is set to issue a controversial due-diligence regulation aimed at making it more difficult for mobsters, corrupt foreign officials, terrorists and narco-traffickers to launder their proceeds through the U.S. financial system
Banks not only are required to have an anti-money-laundering program enabling them to identify and report suspicious transactions, but also must file currency-transaction reports for cash deposits and withdrawals of more than $10,000.
more details here: http://www.insightmag.com/news/2003/03/04/National/Must-U.Banks.Be.Kept.In.Check-370712.shtml
Senior Member - 1K
posted: Mar. 3, 2004 @ 11:37p
Thank you. After a few minutes of searching. I found a similar thread on fat wallet here:
glad you found it bnbhoha. i spent 5 mins looking for that thread in active and inactive and couldn't come up with it. grrr, the search aggravates me at times.
Senior Member - 9K
posted: Mar. 4, 2004 @ 12:43a
-over $10,000 MUST be reported. -any amount MAY be reported. -sub $10,000 are OFTEN reported.
Senior Member - 1K
posted: Mar. 4, 2004 @ 1:15a
but that's cash, right? According to most people on the above link
Senior Member - 9K
posted: Mar. 4, 2004 @ 1:25a
it's my understanding that everything over $10,000 gets reported period. any large cash deposit can, at the discretion of the institution, be reported on a SUSPICIOUS INCIDENT REPORT.
but in the end... who cares? if you're paying your taxes this shouldn't be a problem.
posted: Mar. 4, 2004 @ 1:32a
Actually let's get to the heart of the OP. Is the money your brother is lending derived from illegal activity or 'under the table' money? If not don't worry about it. If you don't use cash he probably won't have a Suspicious Activity Report filed but I believe he will get a Currency Transaction Report filed.
Senior Member - 1K
posted: Mar. 4, 2004 @ 6:24a
crazytree said: "over 10,000 must be reported, any amount MAY be reported"
crazytree is exactly correct. Banks do scan for the multiple just under $10,000 deposits or several deposits to the same or linked accounts to different branches in one day. Patterns and cash deposits are easy enough to be picked off. Our lockbox at a Bank in America is able to pull money orders for insurance payments out of all the deposits and flag them regardless of amount. I am sure that they can do it for other deposits as well. The bottom line is if you are paying tax on the money and it isn't illegal you will be fine, otherwise don't do it.
posted: Mar. 4, 2004 @ 8:10a
This was my post from the other thread linked above. It is CASH folks. Only cash, always cash. And as has been said already, there are plenty of individuals and businesses who legitimately deal in high volumes of cash. They dutifully fill out the reports (or are able to get reporting exemptions) because their business is LEGITIMATE. If you are conducting legitimate business, there are no "red flags"!
<< You are referring to the Currency Transaction Report and the Suspicious Activity Report (filed with the IRS). These reports are filed by banks as well as Money Service Businesses (check cashers, currency exchanges, etc.). The CTR is filed when a transaction consists of $10,000 or more (In or OUT of the bank - yes, withdrawals count too). The SAR is filed when the amounts are lower, but there is reason to believe that the customer is engaged in illegal activity. Structuring transactions to evade currency transaction reporting (say, splitting a $10,000 transaction into two, or conducting a transaction just below the reporting threshold) can also be a criminal act.
There are also reporting requirements for other businesses, such as auto dealers, boat dealers, aircraft dealers, casinos, etc., when large amounts of cash are involved.
Note that ALL these requirements are for CASH transactions. There are no reporting requirements if you deposit $10,000 in checks and then purchase a $10,000 bank check. Keep in mind though that your bank will hold the deposited funds until they clear before they will let you withdraw certified funds in the form of a bank check. This could take up to ten days. >>
posted: Mar. 4, 2004 @ 11:47a
Of course there are ways around getting reported and there are people that do it quite often. That's one of the reasons the BSA is not very effective in catching the bad guys. Unfortunately for the OP, he does not fall under this category.
posted: Mar. 17, 2004 @ 9:40a
SUBJECT: New Currency Transaction Report
Summary: The Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) has issued a new Currency Transaction Report (CTR) form - FinCEN Form 104 - which replaces the Internal Revenue Service's CTR Form 4789.
The Department of the Treasury's Financial Crimes Enforcement Network (FinCEN) has released a new Currency Transaction Report (CTR) form - FinCEN Form 104 - which replaces the Internal Revenue Service's (IRS) CTR Form 4789. Banks and other institutions are required to complete a Currency Transaction Report to help law enforcement agencies detect and prevent money laundering and other illegal activities. FinCEN Form 104 is now available for use; however, banks may continue to use IRS Form 4789 until August 31, 2004.
Each financial institution must file CTR Form 104 for each deposit, withdrawal, exchange of currency or other payment or transfer by, through or to the financial institution that involves a transaction in currency of more than $10,000.
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