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I understand that some transactions you make are reported to the Feds by the Bank. Maybe above a certain amount like $10,000 and more. Anyone know of this?
Bankers are under an obligation of "know your customer" as well. So if you go in pretty regularly, carrying $6,000 or so in small bills they are supposed to report you. Of course if you own a small coffee shop and don't take credit cards and the banker solicited your business, or you're both in the same small town, I don't think they'd report it.
I understand that some transactions you make are reported to the Feds by the Bank. Maybe above a certain amount like $10,000 and more. Anyone know of this?
Edit: It's against the law to structure your deposits to avoid being reported (of course they'd have to prove it). Over the last 5 years I've probably had 2-3 cash transactions in my checking account over $10,000. Haven't had the Feds show up at my door yet. (sorry for so many edits, experiencing computer problems/user error)
I have been told that it is now $3,000 for any transaction that is not a paycheck. I was told this by a bank teller.
Also every quarter, every bank Talley's all deposits into every account, and sends that tally to the IRS. At the end of each year, the IRS knows the Gross tally of all deposits that have been made into all of your bank accounts.
Obviously if you file a schedule 'C' then you are operating a business out of that account, so the IRS uses different formulae to look over these numbers.
Say for example that your schedule 'C' business is coded '0001', then the average, '0001' business shows a profit margin of 10% of their gross. So depending on how far above 10% you are, will determine if a flag is set on your return and the value of that flag. [I do not recall all of the business codes, they should be listed in a pub 17]
Considering what type of activity you are doing: so long as your taxable profit runs nearly average as compared to other folks with the same tally of deposits, then you will not be audited.
If you opened two accounts at two banks, and each week transferred your direct deposit paychecks from one bank to another, it would show as if you had doubled your income, and it would set a flag at that value. As the IRS works through their audit flags, they process them down from the highest value toward the lower values. If the IRS gets to your flag, then you get audited.
Bank Secrecy Act (http://www.irs.gov/businesses/small/article/0,,id=152532,00.html - broken link)
This reads cash transactions. I thought it was all transactions over $10,000. So if you were to transfer $10,000 from one account to another for a CD, this is not over the amount and it is not cash, so I would think it does not get reported.
This reads cash transactions. I thought it was all transactions over $10,000. So if you were to transfer $10,000 from one account to another for a CD, this is not over the amount and it is not cash, so I would think it does not get reported.
You are correct. It needs to be a CASH transaction for it to get reported. I wouldn't be concerned about it anyway. I've done reportable transactions before without any problems.
Even the post office is in on the act. If you try to buy more than $3,000 in postal money orders, out comes the paperwork. You could always go to another post office, and I'm sure people do. But I was told that if you try to go over, then cut back under $3,000 so you don't have to fill out the forms, they will notify surrounding offices to be on the lookout for you.
I fail to see how anyone could finance "terrorism" with $3,000, or even $10,000 for that matter. Such a small amount of cash doesn't buy much any more. We are losing so many freedoms every day, and it seems like no one cares. If it is your money and you came by it legally, you should be able to do anything you wish with it - have complete control - without government interference.
Edit: It's against the law to structure your deposits to avoid being reported (of course they'd have to prove it). Over the last 5 years I've probably had 2-3 cash transactions in my checking account over $10,000. Haven't had the Feds show up at my door yet. (sorry for so many edits, experiencing computer problems/user error)
It is call "stacking". I do know of some that has been caught.
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