What are the rules about transactions over $10,000 and what reports are given to the IRS? Is it just when a person cashes a check or does it apply to deposits too?
I’m a foreign student here in the US and I remember two things
1)At US Customs, declaring if I had >$10K in cash / traveller’s cheques.
- At my bank, filling up paperwork if I got wired money in excess of $10K (although I never had to do that)
It’s the same here in Australia. For the last ten years, there is a form you need to fil out for any banj transaction over $10 000AUD (about $15 000 USD). I don’t know the details they ask.
There was a homeless man in Delaware (? CT ? Somewhere East) who filled out his tax return pretending to be a very rich man. He got “back” 2 million dollars, because the IRS had not audited him and the computer did not check. (Or perhaps the man altered his records cleverly enough to fool said IRS computers so that no alarms would trigger before sending that enormous sum). The IRS audits fewer than 1 in a hundred cases nowadays, but it’s a real pain in the ass to get audited, even if you’re perfectly clean and did all the math correctly.
The bank had to report this enormous new sum deposited in this man’s account, which had never had more than $2000 in it before, and someone at the bank took note of it and tipped off the govmint.
Unfortunate - he wasn’t careful enough to bribe the bankers or launder it through some local shady spot.
I’m pretty sure that only relates to cash transactions. I’ve deposited bigger cheques without question.
A quick check confirms it. It is under the Cash Transaction Reports Act 1988 and it’s not just banks. It seems to be out to catch anyone who has lots of cash. I guess the government then ask you where it came from.
TLD, minor nitpicks:
(1) I regularly deposit large cheques (US and AU), for sums larger that $10,000AU, never been asked anything special. I also transfer between accounts (both mone and others), sums greater that $10,000 (but under $100,000), again, never asked.
(2) $10,000AU is about $7,214.60 US, currently (I assume you got your currancies mixed up?).
Anecdotally, I always assumed the $10,000 thing was urban legend. When you’re Joe Schmoe, $10,000 seems like a lot and that the gummint checks on you if you move that around seems likely, but now I do it almost daily for biz, and it seems absurd they would care - I only run a small biz.
abby
TLD, minor nitpicks:
(1) I regularly deposit large cheques (US and AU), for sums larger that $10,000AU, never been asked anything special. I also transfer between accounts (both mone and others), sums greater that $10,000 (but under $100,000), again, never asked.
(2) $10,000AU is about $7,214.60 US, currently (I assume you got your currancies mixed up?).
Anecdotally, I always assumed the $10,000 thing was urban legend. When you’re Joe Schmoe, $10,000 seems like a lot and that the gummint checks on you if you move that around seems likely, but now I do it almost daily for biz, and it seems absurd they would care - I only run a small biz.
abby
http://www.moneylaundering.com/trainingarticle1.htm
"The U.S. Suspicious Activity Reporting regulations issued by the Treasury Department’s Financial Crimes Enforcement Network require that “every bank” file with Treasury “a report of any suspicious transaction relevant to a possible violation of law or regulation.” The SAR regulations define a “suspicious transaction” as any transaction involving $5,000 or more that is “conducted or attempted by, at, or through the bank… and the bank knows, suspects, or has reason to suspect that…” yada yada
and
“Because CTRs provide law enforcement agencies with valuable information on the movement of large amounts of cash, money launderers will try to avoid the filing of a CTR by breaking down, or “structuring,” transactions to less than the $10,000 CTR reporting threshold. The BSA prohibits “structuring” and imposes civil and criminal penalties for persons who cause or attempts to cause a financial institution to fail to file a CTR or to file a CTR “that contains a material omission or misstatement of fact.””
CTR - Currency Transaction Report
Note that the 2nd block of text refers to currency transactions and not other monetary transactions. The 1st block refers to all monetary transactions, as far as I can tell.
Here’s an example where a bank violated that 2nd part, and got slapped with a $10,000,000 fine.
MONEY LAUNDERING: A BANKER’S GUIDE TO AVOIDING PROBLEMS, which updates a 1993 publication, discusses how bankers can identify and manage the risks associated with money laundering and terrorist financing. The revision was prompted by the growing sophistication of money launderers, a growing international response to money laundering, changes to anti-money laundering laws, and recent anti-terrorist financing legislation.
As flowbark points out, the $10,000 limit is now $5,000.
BTW, the USA Patriot Act is now part of the process as well. You could very well attempt to launder $5,000 and be labeled a terrorist under the Patriot Act (along with all the repercussions of that Act as well).
If you showed up, day after day, with wads of hundred-dollar bills to deposit, they’d be asking you lots of questions! As the provided links indicate, cash transactions get a lot more scrutiny, and are subject to some absolute reporting requirements.
Other transactions, i.e., those involving checks, charges, whatever, might also give rise to suspicions of some kind of skullduggery, but an auto dealership, for example, depositing a lot of checks for roughly $20,000 wouldn’t cause anyone to raise an eyebrow. On the other hand, if I run a lemonade stand, and deposit a check every day for exactly $8000, the bank should probably report that fact to the Feds.
No, there isn’t a form.
The Financial Transactions Reports Act 1999 (Cth) requires that banks (amongst certain others) report:
a) cash transactions over $10,000
b) “suspicious” transactions
c) overseas transfers over $5,000
If you regularly make large (legitimate) cash transactions, like withdrawing cash to pay your employees in cash, or depositing cash from the supermarket that you own, there’s a form that you can fill in, if you want to, that will prevent guys in black suits showing up at your door. 
Crap. Wasn’t ready yet. Let’s try that again:
No, there isn’t a form like that.
The Financial Transactions Reports Act 1988 (Cth) requires that banks (amongst certain others) report:
a) cash transactions over $10,000
b) “suspicious” transactions
c) overseas transfers over $5,000
If you regularly make large (legitimate) cash transactions, like withdrawing cash to pay your employees in cash, or depositing cash from the supermarket that you own, there’s a form that you can fill in, if you want to, that may prevent guys in black suits showing up at your door.
The only thing I would add is that the currency transaction reporting requirements are in aggregate. That is, every cash deposit you make at bank X in one day, whether at one branch or several, at one time or many, are added together and, if the total exceeds the limits, a report is generated. It’s pretty tough to avoid being reported, but then that’s the point.
Yes, it’s true. Transactions over $10,000 are always recorded and reported, even though they don’t tell you that they are doing it.
In working finacial crime and drug cases, law enforcement regularly subpoena copies of these reports to create a paper trail for the money that we’re after.
Speaking as someone who’s filed quite a few CTRs…
We had to generate one for any and all customers moving $10,000.00 or more in cash in one day. Deposits or withdrawals. And yes, I’ve filed them on folks that appeared to be structuring - (Customer deposits $6,000 cash yesterday and $6,000 today at a different branch? Reported.)
If we had reason to suspect fraud or criminal intent, we had to report any cash transation, regardless of amount.
In practical terms, we never had reason to suspect fraud, so we never reported any cash transactions under $10,00.00 except in apparent cases of structuring. On the other hand, we had some casinos as customers, and trust me - those folks move a LOT of cash. I recall one deposit of $126,000 in cash. No idea if that was in coins, small bills or whatever, but dang, that’s a lot of cash to have in one place!
Speaking as someone who’s filed quite a few CTRs…
We had to generate one for any and all customers moving $10,000.00 or more in cash in one day. Deposits or withdrawals. And yes, I’ve filed them on folks that appeared to be structuring - (Customer deposits $6,000 cash yesterday and $6,000 today at a different branch? Reported.)
If we had reason to suspect fraud or criminal intent, we had to report any cash transation, regardless of amount.
In practical terms, we never had reason to suspect fraud, so we never reported any cash transactions under $10,00.00 except in apparent cases of structuring. On the other hand, we had some casinos as customers, and trust me - those folks move a LOT of cash. I recall one deposit of $126,000 in cash. No idea if that was in coins, small bills or whatever, but dang, that’s a lot of cash to have in one place!
In this article about allegations that Rush Limbaugh was laundering money, note this statement. “It can be a federal crime to structure financial transactions below the $10,000 limit to avoid the reporting requirement.”
When I was a bank teller, I was asked to report transactions of $10,000 in cash to provide a paper trial of a transaction the otherwise would have no trail. We filled out a form and the form went to the authorities. We were also asked to watch out for and report suspicious transactions such as a cash transaction of $9,500 or multiple transations, each less than $10,000, but cumulatively exceeding $10,000 in short periods of time.
I recall seeing a ~$7,000 transaction, raising an eyebrow, but doing nothing. A few weeks later, a similar transaction. I reported it, along with the prior transaction. I heard nothing for about a month. Then, some authority came in, thanked me, and and told me that the person I had reported had been arrested.