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View Full Version : Do withdrawls or deposits to your bank account get flagged by the IRS?


IlliniRyRy
07-26-2005, 10:45 PM
Hi, I have about 60k in my checking account and I'm looking to open a futures account, if the money is transferred into the other account and then quickly transferred back after a few weeks or something, will that increase my chances of getting audited? Anyone know if it matters? Thanks.

Sniper
07-27-2005, 12:30 AM
why would you want to do that?

Here's the law in the US... If an individual deposits or withdraws $10,000 or more in cash, the transaction must be reported to the Treasury Department. If you purchase $3,000 or more in money orders or traveler's checks, a report will be filed.

What happens when a bank files a report? The reports, known formally as suspicious activity reports, or SARs, are sent to the Financial Crimes Enforcement Network, or FINCEN. FINCEN is a unit of the U.S. Treasury Department, and is the single largest repository of personal financial information in the United States. The SAR will contain the name, Social Security number, address, occupation, and account number and other details about the subject of the report. Once this report is filed, it sets a number of wheels in motion.

The IRS and other government agencies will begin to compare data on the subject of the SAR with other information they already possess. Did the subject's tax returns justify the amount of the transaction? What other accounts does the subject have, and has he been the focus of law enforcement investigations before? The subject's bank account may be monitored for an extended period of time, and in a worst case, the accounts may be frozen until the individual can prove he is not a criminal.

Its worth noting that the Patriot Act extended the reach of the Bank Secrecy Act extensively to include virtually all businesses. If you make a large financial transaction, big brother is watching.

SonofJen
07-27-2005, 09:46 AM
[ QUOTE ]

Here's the law in the US... If an individual deposits or withdraws $10,000 or more in cash, the transaction must be reported to the Treasury Department.


[/ QUOTE ]

Is the same true if you cash numerous checks throughout the year without actually "depositing" them?

Sniper
07-27-2005, 10:21 AM
I hope your not stashing all that cash in your mattress?

The law is actually very broad... frequent use of a safety deposit box gets reported, use of numerous bank branches gets reported, large cash purchases for autos, jewelry, electronics, etc get reported, large cash deposits at casinos get reported...

Its a pretty good bet that frequent cashing of offshore checks would trigger a report as well.

SonofJen
07-27-2005, 03:10 PM
I was just curious to know if the event of cashing checks is something that is tracked by banks and transparent to entities such as the IRS. They seem to sometimes ask for your account number, or ssn, or driver's license to, I think, just verify whether you personally have enough money to cover the amount of the check. I just don't know if any of those identifiers are used to actually record the event of you cashing the check. I never cash checks over $200 -- it's just something I've always wondered.

Sniper
07-27-2005, 03:38 PM
Banks are certainly tracking checks cashed against $ in your account and they are required to report unusual activity.

Cashing an occassional $200 check doesn't sound like anything unusual.

If you were running around to 30 different branches cashing $200 at each one every day, that would raise a red flag!

IlliniRyRy
07-27-2005, 07:09 PM
[ QUOTE ]
Banks are certainly tracking checks cashed against $ in your account and they are required to report unusual activity.

Cashing an occassional $200 check doesn't sound like anything unusual.

If you were running around to 30 different branches cashing $200 at each one every day, that would raise a red flag!

[/ QUOTE ]


yeah but its just a short term investment, the same thing as if i were openning, say a 60k CD at another bank. you're saying once the investment has matured and I decide to deposit it back to my bank account, that would raise a flag???

Sniper
07-28-2005, 08:58 AM
Millions of these reports are filed every year, mostly on legitimate transactions.

If the transaction is legitimate and you plan to file the appropriate tax forms regarding the transaction, why would you be concerned?

Assuming this is legitimate, what investment in the futures market are you thinking of making, where your expectation is that as a first time player in the futures market you are going to move your 60K from your bank bank account into the high risk futures market and move it back to your savings account in a couple of weeks?

Jeffage
07-28-2005, 10:20 AM
[ QUOTE ]
Here's the law in the US... If an individual deposits or withdraws $10,000 or more in cash, the transaction must be reported to the Treasury Department. If you purchase $3,000 or more in money orders or traveler's checks, a report will be filed.


[/ QUOTE ]

What about a $10,000 check? I pay all my taxes, but still would rather not be on some watch list and an audit target. I also make frequent poker-related EFT transactions. Every one of these over 3k transactions requires a report? What about frequent 2k transactions, etc? I was under the impression that only literal cash transactions (as in depositing or withdrawing large amounts of $100 bills) require a report. Are you saying if I get $4,000 in travellers checks to take to Vegas, a report is filed?

Thanks,
Jeff

IlliniRyRy
07-28-2005, 11:01 AM
[ QUOTE ]
Millions of these reports are filed every year, mostly on legitimate transactions.

If the transaction is legitimate and you plan to file the appropriate tax forms regarding the transaction, why would you be concerned?

Assuming this is legitimate, what investment in the futures market are you thinking of making, where your expectation is that as a first time player in the futures market you are going to move your 60K from your bank bank account into the high risk futures market and move it back to your savings account in a couple of weeks?

[/ QUOTE ]


The transaction is legitimate. But who wants to get audited? I don't. I work for a proprietary futures trading company and have always traded for their account, but I'm going to start trading on my own. It may be only temporary.

Sniper
07-28-2005, 11:56 AM
If you are filing your taxes properly (a very complex topic beyond the scope of this forum) then you shouldn't have anything to worry about.