If I suddenly had such a sum to stick in a bank, I wouldn’t feel comfortable putting it all in one place. I would want to have it split up in several institutions, if for no other reason than because I wouldn’t trust any one bank to care for it properly.
So what if I opened, say, 4 accounts, one each at 4 different banks (S&L’s, CU’s, whatever) AND filled out the proper CTR with each of them? Would that be viewed as improper structuring, given that I’m honest with the CTR’s up front?
ETA: As it is, in fact, I have much less money laying around than that, but what there is, I have in several different banks already. Are they going to come and take me away for that?
This. So the bank reports the deposit. So what? If questioned, just explain the situation. If the money is legally obtained, there’s no crime. I’ve deposited large amounts into accounts and never got any hassle.
OK, you fill out a CTR at a cash trans over $10000.00. So, yes, if you did 4X $15000 transactions, no problemo. BUT 4x $9999= problem, even if you use that reason- and you can’t fill out a CTR on trans under $10000.
Of course, your funds are federally insured to well over the figures described here:
It’s not how much you have in each bank that’s the issue. It’s how it got there. Taking a sum of cash over the reporting limit, and deliberately splitting it up to avoid CTR reporting is the crime. So, if in the OP’s case, his friend had taken her $100 per paycheck and placed it $100 at a time in 4 (or any number of) different banks over 40 years, that’s perfectly OK.
The problem as I see it, is simply the IRS may declare you owe and leave it to you to prove you don’t
My late husband had a problem with taxes one year in the early 90s. They said he owed $10,000 more than he actually did in 1992. They notified him of this in 1999. He had his pay stubs and records and the IRS simply declared, there records were different and his records didn’t matter.
He wound up paying for a tax attorney who proved the IRS was wrong. But it took over 2 years to clear it up and after, the IRS still was hitting his credit for interest. They in effect billed him for $10,000 extra plus interest on that $10,000. Then after his attorney proved the IRS wrong for the $10,000, they still were demanding, the interest on the $10,000.
So back to his attorney and a year later he got it taken care of.
But from this, I can the IRS may simply declare you wrong and until you can prove, to them, to their satisfaction, you’re screwed. And your records mean nothing. Only by having his old company dig for records, was he able to clear it up. AND he still got stuck paying for a lawyer.
So while you may say, there’s no reason to say the IRS wouldn’t accept the explination of a mattress, they might not. Then you have to prove to them you did pay tax on it. You can show them old pay stubs, but whether or not they accept it, is a matter of the individual auditor.
The only way to handle this is hire an attorney and have him deal with it.
So on the one hand, Little Old Lady goes to the bank with the cash in one sum, fills out a form to declare to the IRS that this money has already been taxed as part of paycheck, and has to rely on the goodwill of the IRS to believe her story (assuming that she can’t produce the stubs from 40+ years back - who keeps them that long? I would throw out even tax stuff after 10 years - but I think the laws are different…)
On the other hand, Little Old Lady pays 4 000 (4999 is obviously an attempt to skirt the law, not worth the bother) into five different banks and repeats each week, and when the Money laundering agency investigates her, claims "I didn't want to carry a very large sum/ the tellers gave me a free donut every time I deposit more than 1 000/ I like the benefits of the different banks/ I want to keep more people employed, so I spread my cash" and relies also on the goodwill of the law investigators to believe that.
Why is one story more likely to be believed than the other?
(I have my money in savings accounts from different banks, too, but not to get under the reporting law. So far I also haven’t been asked about it - maybe I’m already in a terrorist/ drug launder watchlist, but they haven’t told me?)
From what I am reading above: The offence is - not that you have multiple bank accounts, but rather that you have more than $10,000 in cash at one time, and appear to have “structured” transactions so as to deposit it all within a short tme without having to trigger the $10,000 limit.
If you deposit less than $1,000 a month total, nobody’s going to notice anything. If you deposit far more than your regular paycheque, within a short amount of time, split up so it does not reach $10,000 in any one bank or month, this can be viewed as structuring. This is an offence.
You may be totally innocent of drug traficking, but that doesn’t matter. The government will hold on to the money, and you must pay for an attorney with whatever you have left, to convince the judge that (a) the money did nt come from crime (b) the money was earned and (c) the taxes ahve already been paid.
I’m thinking the safety deposit box is the best course of action now. From what I see above, thre is no law against keeping a stash of cash. You might transfer some of that money to a savings account or two from time to time - provided it is not done in a systematic manner for the purpose of avoiding reporting.
My guess, IANAL - I.e. “I put $4,000 in there a few months ago to pay for the Carribean cruise” is legit because its purpose is not to avoid reporting, but to meet a specific cost. $1,000 a month for 24 months for no other reason but to turn cash into bank electrons is structuring.
Of course, then the question comes up whether a nosy bank employee can report your safety deposit box cash stash if they notice - she always seems to get big wads of cash out of that box, always has wads of bills afte visiting her SDB.
So - the offense is “splitting up the money with the intent to avoid the reporting”, not “splitting up the money”. If the reason Little Old Lady gives as to splitting up the deposits “I want to keep the tellers busy so the stay employed”, her intent wasn’t to avoid reporting, so no offense.
How likely would she be believed? Esp. if she chatted with each teller for 15 min to keep them further occupied, as some old ladies are wont to do?
Based on my experience investigating money laundering for a DoJ component, I’d say she’s not in much danger. Depositing a large sum of cash will likely trigger a SAR (Suspicious Activity Report), but unless there’s a demonstrable nexus to criminal activity, the SARs just sit in FinCEN (Financial Crime Enforcement Network) waiting to get tickled in connection with an investigation. When I was working with this stuff several years ago, we often checked out targets (drug dealers and money launderers) in FinCEN and made note of their large-stakes gambling habits, odd cash transactions, and similar.
On the other hand, those big databases also have plenty of data regarding little old ladies in your friend’s situation. CTRs and SARs aren’t evidence of a crime; they’re simply a tool that supports the suggestion that a crime may have been committed. It’s not like there’s a team of super-diligent folks sitting in a bunker and ringing a bell every time a CTR/SAR gets filed (hell, I hope not, anyway - that would be pricey).
Think of it this way - the CTR/SAR is no different than someone in an airport calling the terrorism hotline because some dipshit left his bag in the terminal. The folks receiving the report will review it (maybe), but when/if they match the bag to it’s owner, they’ll just give him back his dirty laundry and tell him to keep track of his belongings. No penalty for stupid.
Already answered correctly and in fairly good detail above, but yes: if done to avoid reporting requirements, regardless of the cash’s ancestry the multiple smaller deposits are illegal.
I’m seriously suggesting it, because that’s what the law says: specifically 31 USC § 5324(a)(3), which prohibits making any transactions whose intent is to avoid the reporting requirements of section 5313 (a) or 5325, any regulation prescribed under any such section, the reporting or recordkeeping requirements imposed by any order issued under section 5326, the recordkeeping requirements imposed by any regulation prescribed under section 21 of the Federal Deposit Insurance Act, or section 123 of Public Law 91–508.
Not sure why you find this so inherently unbelievable.
She declares nothing on the form about the source of income and the IRS doesn’t get the form. Next the iRS must prove that she had a source of cash unreported income.
If the net result is to basically convert $50,000 cash to bank deposits in short time without going close to $10,000 per transaction - no matter what the person’ excuse, the facts seem to suggest structuring. Depends what the judge/jury choose to believe. Unless a psychiatrist testifies she’s a little whacko (technical term) nobody logically makes deposits from cash in a structured manner just to occupy tellers. Especally, if she didn’t do this sort of thing before and suddenly started - then stopped when the cash was gone. If she pulled out $3,000 then redeposited every week, and has done so for 10 years, some might buy the ongoing “whacko who likes to chat with tellers” routine. Otherwise, she’ll gobble up more than $48,000 in lawyer fees.
the quickest way to convert a mattress full of bills into something much much safer without involving a lot of paperwork and risk is a safe deposit box.
In this case, if the bank asks the customer, she provides her explanation, and the bank finds it credible, then no problem. But if the customer declines to provide her backstory to the bank, or iif the bank officer finds it less than credible for whatever reason, the bank could easily file a SAR under this guideline. The bank has wide discretion and may decide that they won’t get in trouble for filing it even if she’s innocent, but may get in troubel for not filing it if she’s nefarious.
I’d deposit all at once. The reason is that I’d be a little afraid that if I didn’t, someone might learn or guess that I was keeping money at home. It’s one thing to keep the money at home as long as no one else knows of it, but once you’re seen with some of it, someone might suspect that you’ve got a cash hoard.
If you were on the jury at her trial for felony structuring, and she had been making a series of $9999 deposits, what story would you believe?
Keep in mind too that one’s reason for avoiding the reporting is irrelevant: it doesn’t matter whether one is a bank robber, drug kingpin, or a simple paranoiac who doesn’t like being kept track of by the feds.
The point of avoiding reporting - the suggestion that the IRS might decide the cash represented untaxed earnings. From the earlier posts (and knowing that CRA in Canada operates in a similar manner) they could simply seize the money and it would be up to you to pay the attorney fees, and prove that it in fact did not represent untaxed income. (Maybe a year’s worth of private poker winnings or small casino jackpots).
Only someone with real tax law experience can tell you how likely this scenario is, depending on the amounts.
OTOH, if she put it into a safe deposit box, it is much less likely to be stolen or misplaced. If she simply used that instead of taking cash out of her account from time to time, her pension/social Security would legitimately pile up and within a few years perhaps she could replace cash-in-box with money-in-bank without doing anything to make the authorities misinterpret her assets; provided she took some money out of the bank too from time to time.
Yes, hoarding money is a real concern; get it into a safe place ASAP. Read about many crimes in the 1800’s, and they revolve around “the thieves heard rumours he was a miser with a large amount of money hidden in his house.” Things probably have not changed that much.
