Within the forseeable future, I’m planning to open a second banking account. To do this, I plan to withdraw cash from my current bank account and deposit it in the new one. However, I have read/heard that if one deposits X or more sum of money in a US bank, then the bank is obliged to report this sum to the federal government with the hope of evading tax fraud. To my vague recollection, this was a surprisingly low sum ($700-$1000?) and considerably less than the sum with which I plan to open my account. I really, really don’t want the feds staring me down for doing something which is perfectly legal. So tell me, what is the maximum sum one can deposit in a US bank beyond which the bank is obliged to report receipt of this money to the government?
The CTR the above link refers to is one form that must be filed in certain situations.
Another form to be aware of is the “SAR” or Suspicious Activity Report.
Any time something “looks funny without a good explanation” your bank’s compliance people are supposed to fill out a SAR. Also any time they get robbed, ripped off or embezzled from they will file a SAR.
Honestly, don’t worry about a $1,000 cash transaction triggerring a federal investigation, even if a SAR did get filed. The FBI probably gets tens of thousands of SARs per month, and a single SAR reporting a single deposit would almost certainly go into the secret, unused vault that stores the Ark of the Covenant from Indiana Jones and the United Way September 11th contributions.
What you probably don’t want to do is make a $9,999 deposit every 30 days so you look like you’re trying to avoid having a CTR filed.
If you have legitimate business, just keeps receipts and good notes of your finances and make the deposits you need to make.
By the way, the following link:
http://www.google.com/url?sa=t&ct=res&cd=3&url=http%3A//www.fdic.gov/news/news/financial/2001/fil0139a.html&ei=huEcQ5C8Br20iwHh85yLDA
Contains the note that:
“From conversations with law enforcement agencies, it appears that they are very interested in SARs where the financial institution has incurred osses of at least $100,000.00 or SARs of a more significant amount than $5,000.00.”
The same document suggests that law enforcement ignores most SARs with values under $25,000.
I’d submit that bolsters my argument that your transaction is COMPLETELY unremarkable and that concerns about it are needless.
Americans open untold numbers of bank accounts each day. This really should not be any kind of problem at all.
To make things simpler all around (rather than carrying large amounts of cash), you might want to get a cashier’s check from your existing bank.
One large deposit will be noted, but unless you make a series of big moves, the feds won’t give you a second glance. They’re looking for money launderers, dope kingpins, and terrorists. Ordinary folks opening a new account won’t raise any flags.