Difference between revisions of "Ten Thousand Dollar Deposit Rule"
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| − | Any persons who receive more than $10,000 in one transaction or a series of related transactions, while conducting their trade or business, must file a Form 8300. A transaction is the underlying event resulting in the transfer of cash. A 24-hour period is 24 hours, not necessarily a calendar day or banking day. | + | Any persons who receive more than $10,000 in one transaction or a series of related transactions, while conducting their trade or business, must file a Form 8300. Banks and financial institutions are required to report cash deposits over $10,000 to the government. Large cash transactions may be reported to the government of lesser amounts. A transaction is the underlying event resulting in the transfer of cash. A 24-hour period is 24 hours, not necessarily a calendar day or banking day. |
| + | |||
| + | == Bank Secrecy Act Reports == | ||
| + | *Currency Transaction Report (CTR) | ||
| + | *Currency Transaction Report by a Casino (CTR-C) | ||
| + | *Currency Transaction Report by a Nevada Casino | ||
| + | *Designation of Exempt Person | ||
| + | *Report of Foreign Bank and Financial Accounts (FBAR) | ||
| + | *Report of International Transportation of Currency or Monetary Instruments (CMIR - Collected by U.S. Customs and Border Protection) | ||
| + | *Report of Cash Payments over $10,000 Received in a Trade or Business (8300) | ||
| + | *Suspicious Activity Report (SAR) | ||
| + | *Suspicious Activity Report by a Money Services Business ( SAR-MSB) | ||
| + | *Suspicious Activity Report by Casinos & Card Clubs (SAR-C) | ||
| + | *Suspicious Activity Report by Securities & Futures Industries (SAR-SF) | ||
| + | *Registration of Money Services Business (RMSB) | ||
| + | |||
| + | == Currency Transaction Report (CTR) == | ||
| + | |||
| + | If an individual deposits over $10,000 cash into a bank account, the bank is required by the Bank Secrecy Act to report the deposit on a '''Currency Transaction Report (CTR)'''. Banks submit the Currency Transaction Report to tell the Internal Revenue Service (IRS) that the bank received a large cash deposit, which is different from Form 8300 that other types of businesses file. | ||
* Personal checks are not considered cash. | * Personal checks are not considered cash. | ||
* Wire transfers are not included. | * Wire transfers are not included. | ||
* ACH transfers are not included. | * ACH transfers are not included. | ||
| − | |||
| − | |||
The FinCEN Form 104 Currency Transaction Report (CTR) is the report that is filed when there is a transaction, including deposit, withdrawal, currency conversion, over $10,000. | The FinCEN Form 104 Currency Transaction Report (CTR) is the report that is filed when there is a transaction, including deposit, withdrawal, currency conversion, over $10,000. | ||
| − | A bank can also submit a Suspicious Activity Report (SAR) for any financial activity the bank believes to be suspect in nature. The Treasury Department Form 90-22.47 will also be filed along with the SAR. | + | == Suspicious Activity Report (SAR) == |
| + | |||
| + | A bank can also submit a '''Suspicious Activity Report (SAR)''' for any financial activity the bank believes to be suspect in nature. The Treasury Department Form 90-22.47 will also be filed along with the SAR. | ||
Transactions at exactly $10,000 are technically not subject to reporting, however, banks may interpret it as $10,000 and over, while other banks may not. Those seeking to avoid the transaction being reported should stay below $10,000 perhaps by at least one dollar. | Transactions at exactly $10,000 are technically not subject to reporting, however, banks may interpret it as $10,000 and over, while other banks may not. Those seeking to avoid the transaction being reported should stay below $10,000 perhaps by at least one dollar. | ||
Having a CTR or a SAR report filed for your transaction doesn’t mean you’re in any type of trouble or the government considers you a criminal. It's simply a means of red-flagging it for a closer look by the government to make sure the transaction is legitimate, or that the business you conduct in general is legitimate. If an individual makes a deposit of $14,0000, it will be subject to government analysis to ensure it is not money being laundered. Such deposits are inspected for signs of criminal activity and anything related to terrorism or terrorist activity. | Having a CTR or a SAR report filed for your transaction doesn’t mean you’re in any type of trouble or the government considers you a criminal. It's simply a means of red-flagging it for a closer look by the government to make sure the transaction is legitimate, or that the business you conduct in general is legitimate. If an individual makes a deposit of $14,0000, it will be subject to government analysis to ensure it is not money being laundered. Such deposits are inspected for signs of criminal activity and anything related to terrorism or terrorist activity. | ||
| + | |||
| + | == Structuring Deposits == | ||
Structuring Deposits is a term used to describe the practice of intentionally evading CTR reporting by breaking up potentially large deposits into smaller chunks and spreading them out over a short period of time. For example, an individual deposits $5000 a day for 3 days rather than $15,000, is an example of "Structuring Deposits." Although this practice is not illegal, it can result in the bank filing a Suspicious Activity Report (SAR) as opposed to the CTR the depositor was trying to avoid. | Structuring Deposits is a term used to describe the practice of intentionally evading CTR reporting by breaking up potentially large deposits into smaller chunks and spreading them out over a short period of time. For example, an individual deposits $5000 a day for 3 days rather than $15,000, is an example of "Structuring Deposits." Although this practice is not illegal, it can result in the bank filing a Suspicious Activity Report (SAR) as opposed to the CTR the depositor was trying to avoid. | ||
| + | |||
| + | == IRS Form 8300 == | ||
| + | |||
| + | Persons engaged in a trade or business who, in the course of that trade or business, receives more than $10,000 in cash in one transaction or two or more related transactions within a twelve month period are required to file a IRS Form 8300. This is known as the Form 8300 Report of Cash Payments Over $10,000 Received in a Trade or Business. | ||
== references == | == references == | ||
Latest revision as of 13:02, 15 June 2012
Any persons who receive more than $10,000 in one transaction or a series of related transactions, while conducting their trade or business, must file a Form 8300. Banks and financial institutions are required to report cash deposits over $10,000 to the government. Large cash transactions may be reported to the government of lesser amounts. A transaction is the underlying event resulting in the transfer of cash. A 24-hour period is 24 hours, not necessarily a calendar day or banking day.
Contents
Bank Secrecy Act Reports
- Currency Transaction Report (CTR)
- Currency Transaction Report by a Casino (CTR-C)
- Currency Transaction Report by a Nevada Casino
- Designation of Exempt Person
- Report of Foreign Bank and Financial Accounts (FBAR)
- Report of International Transportation of Currency or Monetary Instruments (CMIR - Collected by U.S. Customs and Border Protection)
- Report of Cash Payments over $10,000 Received in a Trade or Business (8300)
- Suspicious Activity Report (SAR)
- Suspicious Activity Report by a Money Services Business ( SAR-MSB)
- Suspicious Activity Report by Casinos & Card Clubs (SAR-C)
- Suspicious Activity Report by Securities & Futures Industries (SAR-SF)
- Registration of Money Services Business (RMSB)
Currency Transaction Report (CTR)
If an individual deposits over $10,000 cash into a bank account, the bank is required by the Bank Secrecy Act to report the deposit on a Currency Transaction Report (CTR). Banks submit the Currency Transaction Report to tell the Internal Revenue Service (IRS) that the bank received a large cash deposit, which is different from Form 8300 that other types of businesses file.
- Personal checks are not considered cash.
- Wire transfers are not included.
- ACH transfers are not included.
The FinCEN Form 104 Currency Transaction Report (CTR) is the report that is filed when there is a transaction, including deposit, withdrawal, currency conversion, over $10,000.
Suspicious Activity Report (SAR)
A bank can also submit a Suspicious Activity Report (SAR) for any financial activity the bank believes to be suspect in nature. The Treasury Department Form 90-22.47 will also be filed along with the SAR.
Transactions at exactly $10,000 are technically not subject to reporting, however, banks may interpret it as $10,000 and over, while other banks may not. Those seeking to avoid the transaction being reported should stay below $10,000 perhaps by at least one dollar.
Having a CTR or a SAR report filed for your transaction doesn’t mean you’re in any type of trouble or the government considers you a criminal. It's simply a means of red-flagging it for a closer look by the government to make sure the transaction is legitimate, or that the business you conduct in general is legitimate. If an individual makes a deposit of $14,0000, it will be subject to government analysis to ensure it is not money being laundered. Such deposits are inspected for signs of criminal activity and anything related to terrorism or terrorist activity.
Structuring Deposits
Structuring Deposits is a term used to describe the practice of intentionally evading CTR reporting by breaking up potentially large deposits into smaller chunks and spreading them out over a short period of time. For example, an individual deposits $5000 a day for 3 days rather than $15,000, is an example of "Structuring Deposits." Although this practice is not illegal, it can result in the bank filing a Suspicious Activity Report (SAR) as opposed to the CTR the depositor was trying to avoid.
IRS Form 8300
Persons engaged in a trade or business who, in the course of that trade or business, receives more than $10,000 in cash in one transaction or two or more related transactions within a twelve month period are required to file a IRS Form 8300. This is known as the Form 8300 Report of Cash Payments Over $10,000 Received in a Trade or Business.
references
IRS FAQs Regarding Reporting Cash Payments of Over $10,000 (Form 8300)
