It is my understanding that bank transactions exceeding $10,000 will get “red flagged” by these CTRs. The purpose of these reports are to keep a paper trail of potentially illegal/laundering money activities. Absent these activities, the CTRs serve no other purpose. So am I correct to assume that these reports thus have nothing to do with taxes or the IRS? Can I deposit say $15,000 in cash at my local branch without having to report/pay income tax (since it isn’t income for one thing)?
That’s my understanding of it. Those records are for tracking large deposits and transactions. I don’t believe I’ve ever heard that they were used by the IRS.
Actually, they are used primarily by the IRS. The databse is housed by the IRS and only they and the Treasury Department have direct download access from the CTR database. Other agencies must request access permission. This site has all the information you’d ever care to know about the life of a CTR, including this quote which directly addresses the OP:
You can’t fool Mother Nature, or the Tax Man.
In related news, ‘suspicious’ transactions (in the bank’s judgement) will also be red-flagged.
Such as a deposit of $9,999, or two separate deposits of $5,000. Things along those lines.
Oh, yes, you can. Why, on the tax return I just submitted, I told them…
Ummmm. Never mind.
You’re absolutely right, you can’t fool the Tax Man.
Based on discussions I’ve had with bankers, you’re better off having a CTR filed than having a SAR filed (which is what would wind up happenning if you intentionally fudged your deposit amounts to avoid hitting the $10K limit).
A SAR is a suspicious activity report. I believe those go to the FBI.
Good guys have CTRs filed on them all the time. There are 1000 different reasons why it could be legitimate.
Good guys rarely get reported for “structuring”, which is the practice of intentionally avoiding a CTR.
If you need to deposit $14K, don’t sweat it. Just keep receipts for the transaction in case you ever hear questions.