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Lookin4Par
Colorado State Fan
Boulder, CO
Member since Jun 2012
836 posts

Which bank transactions must be reported to the Feds?


Just curious what types of transactions throw red flags up?






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LSURussian
LSU Fan
Baton Rouge
Member since Feb 2005
76112 posts
 Online 

re: Which bank transactions must be reported to the Feds?


Any cash or cash equivalent transaction exceeding $10,000 or any transaction(s) the bank classifies as unusual in nature or not customary by that customer, such as an unusually large number of cash transactions less than $10,000 but in total exceeds $10,000 performed over a short period of time.

Banks are required to do this by law and must report such transactions to the IRS.






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Lookin4Par
Colorado State Fan
Boulder, CO
Member since Jun 2012
836 posts

re: Which bank transactions must be reported to the Feds?


Is this also true for small business accounts?





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foshizzle
LSU Fan
Washington DC metro
Member since Mar 2008
28593 posts

re: Which bank transactions must be reported to the Feds?


quote:

Just curious what types of transactions throw red flags up?


Is this for a "friend"?






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LSURussian
LSU Fan
Baton Rouge
Member since Feb 2005
76112 posts
 Online 

re: Which bank transactions must be reported to the Feds?


quote:

Is this also true for small business accounts?

Yes, however the bank has some discretion in that if the bank "knows the customer" it may not report smaller transactions which total over $10,000 because the customer's relationship manager understands the nature of the customer's business.

However, because of the draconian money laundering fines the bank might be subject to if it does not report transactions and it is later determined that non-reporting contributed to the bank's customer being able to launder money, many banks take a very conservative view and report EVERYTHING which might be even the slightest bit suspicious.







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MOT
LSU Fan
Member since Jul 2006
11921 posts

re: Which bank transactions must be reported to the Feds?


That's a good breakdown and you can also add that in some cases the employee can be held personally responsible on top of all that.

fincen.gov if you want more specific details.






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Lookin4Par
Colorado State Fan
Boulder, CO
Member since Jun 2012
836 posts

re: Which bank transactions must be reported to the Feds?


Thanks guys. It's a wonder that the wife and I have yet to be audited.





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LSURussian
LSU Fan
Baton Rouge
Member since Feb 2005
76112 posts
 Online 

re: Which bank transactions must be reported to the Feds?


quote:

It's a wonder that the wife and I have yet to be audited.




The day's still young....







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tigeraddict
LSU Fan
Baton Rouge
Member since Mar 2007
4590 posts

re: Which bank transactions must be reported to the Feds?


quote:

Any cash or cash equivalent transaction exceeding $10,000 or any transaction(s) the bank classifies as unusual in nature or not customary by that customer,


this. I received student loan money once at over $10k in cash, went to the bank to deposit and they took pictures, thumb print and asked alot of questions.

also, that was a long walk back from the field house to my car parked by the AG center lot.....






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Vols&Shaft83
Tennessee Fan
Member since Dec 2012
8706 posts

re: Which bank transactions must be reported to the Feds?


quote:

Thanks guys. It's a wonder that the wife and I have yet to be audited.


Don't tempt fate brother,






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Lookin4Par
Colorado State Fan
Boulder, CO
Member since Jun 2012
836 posts

re: Which bank transactions must be reported to the Feds?


I would like to believe that all of our ducks are in a row but I would still be nervous with the IRS microscope.







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LSURussian
LSU Fan
Baton Rouge
Member since Feb 2005
76112 posts
 Online 

re: Which bank transactions must be reported to the Feds?


quote:

I would still be nervous with the IRS microscope.


As you should be.

The process itself is painful and time consuming even if you've done nothing wrong. The worst part is they make you feel like you're guilty of something so you have to prove you're innocent of everything.

As self-employed, I got questioned by the IRS about a payment made to me by a foreign client and it was NOT a pleasant method of questioning.

The irony is I had called the IRS 1-800 Help Line when I was completing my taxes (I do all of my own tax reporting just to force me to be current on tax laws) and I followed their instructions to the letter on how to report that foreign income. Thankfully, I kept the IRS person's ID # who I talked to and was able to use that information in describing my conversation and why I did what I did on reporting the income.

Thankfully, after several months I received a release letter from the IRS requiring no further action on my part.

Still I felt like I was about to go to prison at any minute for doing the right thing!






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Vols&Shaft83
Tennessee Fan
Member since Dec 2012
8706 posts

re: Which bank transactions must be reported to the Feds?


quote:


Still I felt like I was about to go to prison at any minute for doing the right thing!


Can totally relate to this. Had a lien a few years back from a miscalculation on my 1099, they treated me like a child molester.

Finally, after hours (and days) of useless conversation with the ACS department I got it handled. I decided to go top dollar for my accountants from now on, never want to deal with those scum bags again.






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Meauxjeaux
Memphis Fan
Team Vag
Member since Jun 2005
16203 posts

re: Which bank transactions must be reported to the Feds?


quote:

However, because of the draconian money laundering fines the bank might be subject to if it does not report transactions and it is later determined that non-reporting contributed to the bank's customer being able to launder money, many banks take a very conservative view and report EVERYTHING which might be even the slightest bit suspicious.


Dudes! HSBC FTW!






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Meauxjeaux
Memphis Fan
Team Vag
Member since Jun 2005
16203 posts

re: Which bank transactions must be reported to the Feds?


quote:

Thankfully, I kept the IRS person's ID # who I talked to and was able to use that information in describing my conversation and why I did what I did on reporting the income.


Russian, that's probably the greatest advice posted on the MT in awhile.

Sometimes it's easy to not take the time to ask those questions and make good notes of what went on in the call, but it's crucial.

I had similar experience and the fact that I had documented who I talked to and what specifically was discussed, in my opinion, was HUGE to having the IRS proceed reasonably.

In hindsight, telling them "I talked to Agent # 76187389764 who's name was Mrs Smith at 4:14 pm on 01/01/1980" instead of saying "I talked to one of your own people back in January!" was a HUGE "framing" point.

By "framing", I mean it framed the discussion as professional and "all bases covered" as opposed to "yeah I'm pretty sure I did the right thing".






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OnTheBrink
Alabama Fan
TN
Member since Mar 2012
3411 posts

re: Which bank transactions must be reported to the Feds?


Not gonna start a new thread, and not trying to hijack, but I worry about the IRS every single year I file my taxes. I use TurboTax, the wife and I make a little less than $100k a year, but I still worry. I get the audit protection that Turbo Tax offers. The past few years we have had a rental property, but other than that, nothing out of the ordinary.

My question(s), with the small amount of money we make, are we really "targeted" or are they after bigger fish?

If I was somehow in the wrong, do they give you a chance to pay the difference? Or is it straight to prison?

I know, probably stupid questions but I am a worry wart.






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RickAstley
LSU Fan
Reno, Nevada
Member since May 2011
1550 posts

re: Which bank transactions must be reported to the Feds?


There is definitely bigger fish the IRS is worried about. Although I wouldn't let that information comfort me. With no easing in Gov't spending, we are all targeted. If I didn't have morals and if I didn't have that sense of pride that I get from saying I work for a living, then I would certainly feed off of the unemployment/welfare checks and waste time on useless hobbies.





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LSURussian
LSU Fan
Baton Rouge
Member since Feb 2005
76112 posts
 Online 

re: Which bank transactions must be reported to the Feds?


I've used TurboTax for about 18 years.

One of the features of TurboTax is you can see your IRS "profile" regarding the possibility of an audit after you complete your taxes each year. It gives you an estimate of your chances of being audited based on the income/expenses/personal information you entered for your return.

I would guess if you do that, based on what you've said, you would have a "low" risk of being audited or being "targeted."

quote:

If I was somehow in the wrong, do they give you a chance to pay the difference? Or is it straight to prison?

It's straight to prison if not the firing squad.

Just kidding...

In my case they wanted an explanation of the income I showed on my return that they didn't have any information for such as a W-2 or 1099. It never got to the fines and penalties status so I can't really answer your question with any authority. Poodlebrain, who posts on this board, is a CPA and he can probably give you a very accurate answer.

However one year the La. State Department of Revenue lost my enclosed W-2's (before I started my own business and became self employed) and they wrote me a letter telling me I showed too much withholding on my state return and I owed them money for penalties and interest.

When I figured out they didn't include my state withholding from my W-2 I sent the "local" copy of the W-2 (which we don't have to use because we don't have a local income tax). I pointed out the "missing" withholding was on the W-2 and about 2 months later I got a letter from them saying "nevermind." I assume the IRS has some similar type procedures in place.






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OnTheBrink
Alabama Fan
TN
Member since Mar 2012
3411 posts

re: Which bank transactions must be reported to the Feds?


It doesn't, I just use that to put me at ease.

Another couple questions, what is the time fram you can be audited? Isn't it like 5 years?

Also, this year we sold the rental, which long story short, was my first house that was purchased with a THDA loan. Essentially down payment assistance. Well, I have to pay taxes on that, would it be worth it to go to an accountant this year? I know it will cost a little more but knowing that it will be done right seems worth it to me.

Finally, are you less likely to get audited if you go through an accountant, or will they back you up if the IRS chooses to audit you?

And we ALWAYS do what is right. Or what we feel is right. Like I said, worry wart gonna worry wart.






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OnTheBrink
Alabama Fan
TN
Member since Mar 2012
3411 posts

re: Which bank transactions must be reported to the Feds?


Russian, as always, thanks for the detailed response!

quote:

One of the features of TurboTax is you can see your IRS "profile"


We have always been very low. Even with that, I use some of our return to purchase the audit assistance they offer.

quote:

Just kidding...


Yeah, I figured I would have a chance to make up the difference/prove why I did what I did, but I never know. And the thought of my 6'0, 180 lb arse in prison does not sound entertaining!

And FWIW, we always do what we feel is right, never try to take advantage of anything, just be by the book. I did not want my questions in this thread to come across as us trying to game the system.






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