What happens when big money is brought into the US/

Let’s say an amount of 6 figures is wire transferred from a foreign country into a person’s bank account in the USA. All perfectly legitimate and legally obtained funds, simply being moved for access in the US. Anything over $10,000 is reported by the bank to the treasury department, right? An amount ten times that will be taken note of.

I’m assuming, cynically, that Treasury will freeze/seize the funds first and ask questions later. Is that how it works? Is it incumbent on the depositor to prove his innocence in acquiring the funds? In real life, what actually occurs?

Is it considered income, with an immediate tax levy on it?

I would imagine it happens many times each day. I doubt the funds are frozen, unless there is something additionally suspicious about it.

Not quite a hijack. How does the method of transfer affect the chance of civil forfeiture? Do they look at things like company vs. individual or bank wire vs $100,000 in a briefcase on a plane?

If Wikipedia is correct, a CTR only gets filed for a transaction involving hard currency. So if you do a wire transfer of $100,000, no issue. If you walk into your bank and deposit (or withdraw) a thousand $100 bills, a CTR has to get filed.

And then there is this site, ,which appears to trump the CTR:

https://en.wikipedia.org/wiki/Suspicious_activity_report

Looks like all financial institutions are charged with disclosing anything that appears suspicious, regardless of amount, no matter what the form of the transfer. Including a dossier of everything the bank knows about the depositor. And, the bank prohibited from disclosing that a SAR report has even been filed. Filing a SAR report doesn’t fall very far short of being an accusation.

As I understand it, this is correct. The CTR is to note large otherwise untraceable transactions in cash. A wire transfer or check has a source and a destination already established.

In the days of debit cards, ATMs, etc., is it even necessary for an ex-pat to have a bank account in the country where he lives? A Visa debit/credit card will work at any merchant in the world that accepts Visa, regardless of whether it’s issued by High Street Bank, London or Main Street Bank, Boulder. I imagine it’s slightly more complicated doing wire transfers to pay rent and such, but hardly so costly or difficult that it necessitates transferring all of ones money into a local bank.

Maybe not strictly necessary, but a lot of those two-currency transactions will attract extra fees and unfavorable exchange rates. Having an account in your local country and currency and funding it in bulk is probably cheaper.

My wife’s a banking attorney …

SARs are very routine. A big state bank files a few every month. National banks have whole departments that do nothing but file SARs all day long. Banks are much more afraid of under-reporting than they are of ratting out a customer. They don’t see SARs as a big deal.

By and large, the SARs just disappear into the same warehouse as Indiana Jones’ lost Ark went to.

If some computer at some Federal agency puts enough of them together, then maybe some investigator will get back to the Bank a few *months *after the SAR was filed.

I think it’s more accurate to think of SARs as being like 1099s. And CTRs even more so.

No enforcement agency does anything adverse based solely on a 1099. It’s the pattern of lots of 1040s with no income reported for which 1099s exist that will attract the Fed’s computers’ attention.

In an ideal world we’d not have any of this reporting. We’d also not have money laundering, smuggling, or organized crime either.

Bottom line, it’s probably appropriate to dial the paranoia back a little.

International trade and investment would be severely affected if all transactions above a threshold as low as $10,000 were frozen. So what happens is that a cash transaction report (CTR) is filed with the IRS. A CTR is different from a suspicious activity report (SAR) in the sense that a CTR is to be filed once the threshold is met, irrespective of whether the transaction looks fishy or not. The funds are not frozen, however; they are immediately available to the recipient.

So, in effect, what happens? Not much more than in a domestic transaction. The amount is credited to the recipient’s account, and that’s it. And rightly so; there is no need to do anything beyond that simply because the transaction comes in from abroad. Of course, it’s possible that on the basis of these reports, some action or investigation is taken by some regulatory authority later on, but this will usually be much later on, without an immediate impact.

Is the amount taxable? That depends on the underlying transaction. If an amount is wired into a US bank account that is taxable under US law, then it will be taxed; if not, then not. The fact that it is wired from abroad as such has no bearing on tax law.

If he has any income sourced in the country where he lives - i.e. if he works there, if he gets any kind of social security or government benefit, if he owns assets there and receives rent, dividends and the like, then it it will be next to impossible to function without a local bank account, because payors are not going to be interested in the cost and compexity of organising an international transfer to his US account.

Plus, as already pointed out, while it would be possible to use a debit/credit card on a US account for all your local transactions, and to draw cash out of the hole in the wall, it would be very expensive in terms of transaction charges and foreign exchange commissions. You would pay handsomely for the inconvenience of not having local bank account. Why would that look like a good idea?

Necessary no, but it can be very convenient. I’m currently in the situation of having to pay my local phone by the procedure of:

  1. going to a physical store. This can be a supermarket, but not any supermarket. I won’t know which one until I try the machine, as all of them advertise service with my provider but not all of them provide it.
  2. assuming the machine is having a nice day, getting a coupon.
  3. opening their webpage in Chrome so I can get it translated to English.
  4. entering the coupon.

Alternatively, I can
3) call customer service, 4 for billing (thankfully the Swedish word for billing is very similar to the Spanish one), 2 for not about an iPhone 6, 9 for English.
4) get a nice person who half the time says hello how may I help you in Swedish.
5) give them the coupon number so they can enter it.

If I had a local bank account I’d be able to pay via Chrome-translated website (as I do for my prepaid internet service). Why do they not accept CC payment for prepaid telephones? No idea, but probably the same reason you need a local tax number to get a contract that’s got any kind of duration (telephone, internet, housing rental).

Two separate things, I believe. Credit cards payments cost the phone company money to process, and why would they bother with that when they can get paid using debit cards (almost free), internet bank transfers (even more nearly free) or coupons (no idea what the business model is with those).

The dreaded personnummer is the magical key to everything - it’s the database key that they run along with your application and will red-flag it if there is bad credit or a mismatch between your details on the form and what the government has on record (such as name or address), so no taking out contracts with someone else’s details. Making a huge percentage of normal stuff impossible for recent arrivals is a bug, not a feature.

But they accept CC payments for the internet service. Why not for the telephones? (Mind you: in hopes that it may be a case of “nobody thought about it”, I’m following my previously-succesful strategy of asking innocently every single time I speak with them, in hopes that it will look like “we got several questions from customers” rather than “a single anonymous customer is a bore”)

Probably because the people in the internet division wear different color underwear or something. :confused:
But the ‘credit cards are expensive nonsense’ thing is pretty common with a lot of businesses in northern europe in my experience.

The thing with credit cards is they are much more open to fraud, especially online, or especially when the magstripe is involved instead of the PIN. With debit or cash, the merchant has the money, and it’s up to the person who paid to prove they were ripped off; and if procedures were followed the bank, not the merchant, makes up the loss. For credit, the merchant is only guaranteed for certain steps - usually card present, Chip & PIN (very hard to fake) or card present and signature matches. Not sure what the rules are for online. (Security code and billing address must match for starters).

To answer the OP, the government really does not care to control or seize bank transfers. The whole $10,000 reporting thing is designed to prevent cash laundering - taking illegal proceeds (usually from crime) and turning it into legitimate looking bank accounts that can be used for higher living. You can’t buy a Ferrari with cash without raising suspicion; nor can you buy a huge mansion. All those transactions hit a bank, and the biggest problem the guys at the top of the criminal food chain have, is how to appear legit while collecting their pay in cash.

Most first world foreign countries have similar legislation - if only to crack down on tax evasion. You won’t attract attention by transferring $100,000 into the USA, but if you then give $95,000 to Joey Bananas and his buddies for “consulting services” you can bet the feds will look into things. Then they will track how the money got into the bank over in Germany, for example - who deposited or transferred what amounts, and so on. The Germans will make their banks keep such records. Even Switzerland will assist other countries (after much US arm-twisting over the years) when there is evidence of criminal activity.

Cash is seized on the spot because it can disappear quickly. Bank deposits are easily traced, and if not used for legitimate purposes are still subject to seizure whatever account they end up in. If you use the $100,000 to buy a Mercedes or expensive bling, they can seize that.

So what would happen if I had 1 million in $US in DeutscheBank in NY, and went to a DeutscheBank in Munich and pulled out $100 000US … is it treated like 2 different banks or 2 branches of the same bank? Could I flip money in and out of the Munich branch and not have to do anything with the US IRS reporting because it is happening out of the country? [not hiding the money, just doing it in a foreign country with money from gambling or selling baby frogs or something legal]

No. Cash coming in over $10K(or cash equivalent) needs to be reported and will be seized if not reported- or if the person is on several lists.

a Million dollar wire is no big deal. They happen thousands of times a day and they are not reported unless something else is off- like the funds appear to have come from a OFAC restricted nation, etc.

Mind you if you get audited they will require you account for the source. Unless you report it as taxable.

It’s considered income when you normally report. You should pay Estimated Taxes on it or be penalized, of course.

No- every single SAR is examined by a Special Agent. I have ACAMs accreditation and go to their conferences. The Fed agents there have said this over and over. Mind you- if it’s just a $1MM wire with nothing else odd, they will roll their eyes at bit at it having been filed, run a quick check of the client, and if nothing springs up, go on to the next.
CTR’s are only pulled if there’s a audit or investigation.

Mind you, a bank should not file a SAR for a simple $1MM wire- unless there’s something odd- like it goes back out immediately (and not to a escrow account, which is common). Or is a new client with nothing that would indicate that kind of funds, etc.

The money is transferred by wire to Germany, and the German bank makes a cash transaction. At that point, German laws take over. Not sure what obligations the bank also has for having a US presence. I would be surprised if Germany does not have equivalent cash transaction reporting requirements but apparently not. I know Canada does, and the USA has pushed most other countries to do the same.

Googling, Germany is a cash-intensive society, a lot less likely to use non-cash payment methods, so a lot more cash withdrawal/deposit activity I assume, and a good place to launder money. The reporting limit for importing cash is 15,000 Euro. There are no cash reporting rules for internal transactions from what I can find.