Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
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.
Most of this is false. The IRS has no idea what anyone has in the bank. They only check if you are audited. IRS knows a lot less than people think. People are very careful because if you do get caught cheating, there are very stiff penalties. You can take out and deposit whatever you want. Nobody cares. If it's blatantly suspicious, eventually someone will ask what's up. Even that is a one percent chance of happening. But if you are doing something wrong, and get caught. They will make your life a living hell. They will ask you about every penny, and fine you a lot of money.
my wife, in laws. I manage their money. They put at least 50k a year cash in my bank account, because I manage their money. Write checks for them because they are bad with money. We are talking a half million over last ten years. IRS has no idea. I'm sure I have gotten SARS sent. Nobody cares. If I ever got audited, I would just explain. It would be a pain in the neck. But nothing you can do.
So the extra 50k a year must look suspicious, if someone looked, like I am hiding income. But nobody cares. And if anyone asked, I could show them it's not income.
Point is. People need to relax and live their lives. The IRS are not bad people, they are not looking to ruin lives of innocent people. They have no idea what everyone does day to day. Sometimes the IRS makes mistakes and comes after innocent people, but it's more rare than winning lotto. Trust me, the Feds don't know anything about you, and they don't care. Unless you are a huge drug lord or terrorist.
When you file a tax return, nobody even sees it, lol. All computers.
If bank sends a report. Nobody sees it. All computers.
If something is very very weird, maybe computer brings it to humans attention. If human says, "wow. This is worth federal governments time and money, we can really make a lot off of this person if they are guilty." Then the government will investigate. They are trained to know when someone is really screwing them.
So if your bank teller files a SARS, 99.999% of the time, computer will disregard it.
If you are laundering money as a drug dealer, or terrorist. It's not the IRS you have to worry about. It's law enforcement. They will get you almost certainly. and when they catch you, say good bye to your money.
I have never said that the IRS did know how much you keep in your bank accounts.
My apologies. You said the IRS knows a gross Tally of deposits. This is not true. The IRS has no idea, ever, what you have in the bank. Any of your transactions. Unless you are fully audited. They don't have the time, or the staff to know. If you get audited, they will actually ask you which banks you do business with. And if they decide to check for themselves, and catch you lying. Then you are in big trouble.
The new boy thing IRS computer knows is, if you earned any interest on your money. Which these days is less than $500 in any year with something nes personal accounts. IRS could care less.
So say you didn't report the $500 interest. You may get a computer generated letter saying, with penalties... You owe 200. That's not an audit. Nobody actually sees this or investigates you.
Btw, I am not condoning cheating on taxes. You are better off paying what you are supposed to, it's cheaper that way.
Just saying, IRS has no idea what anyone does. Except if it is a full, all out audit.
The new boy thing IRS computer knows is, if you earned any interest on your money. Which these days is less than $500 in any year with something nes personal accounts. IRS could care less.
I'm not sure if this is an ESL issue or auto correct. But interest income is reported to the irs directly by financial institutions for any amount over 10.00 and that's how the IRS knows. It's a good point to bring up because it's a differentiator in the deposit reporting/irs knowledge
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
