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large cash deposit and withdrawal - any concern?
Old 06-18-2016, 06:29 PM   #1
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large cash deposit and withdrawal - any concern?

A few weeks ago I wanted to move some money from one bank at which I have an account to another. For reasons I won't bore you with, I was not able to make an electronic transfer. The two banks have branches 2 miles down the road from one another. So I went to the first bank, withdrew $20,000 in cash, the went to the second bank, and deposited the $20,000.

I know this will generate some sort of "report" by the banks. But is there any reason I should care? Does the report tend to increase IRS audit risk? (I am scrupulously honest on my tax returns, but still audit would be an annoyance).
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Old 06-18-2016, 06:44 PM   #2
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Checks or dead presidents? I annually move that much around when searching for the best CD yields but it's in the form of a check rather than currency. No scrutiny consequences so far at least.
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Old 06-18-2016, 07:06 PM   #3
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I don't think you have any major issue. Some years ago I cashed a $10,000+ check for timber harvested on land my Mom had put in my name. Cashed the check, handed her the money, thought no more about it. Three years later the IRS contacted me wanting taxes, fees, and interest. I had no idea what they were referencing and it took awhile before I figured it out. Knew my Mom had paid the taxes on the timber harvest, but the IRS wouldn't open another taxpayers file when they were investigating me. Got in touch with dear old Mom, who was on her way to the Amazon and said she would deal with it when she got back. This made little sonny boy me distressed, as I was getting more notes from the IRS than I ever wanted to see - and the interest and fees were growing.

All worked out - though Mom couldn't resolve the issue by phone there was an IRS field office within driving distance. Mom adjusted her costume, er, shawl, tuned up her Kate Hepburn spasmodic dysphonia, and clutching random pages of paper presented herself before some hapless agent and refused to leave before the matter was corrected. An effective woman she was she was.

In your case you have all proof ready to hand, so even if you are contacted you can just point out that the transaction was just from one of your accounts to another. Easy-peasy. I can't imagine the IRS would go to full on audit mode if you have an immediate clear answer to there question.
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Old 06-18-2016, 07:12 PM   #4
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The banks have discretion to report a cash transaction over $3,000 (which they rarely do) and must report a cash transaction over $10,000.00.

Just curious, why would you withdraw cash and not request a cashier's check? My bank will recognize a cashier's check from a bank it is familiar with as cash.
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Old 06-18-2016, 07:59 PM   #5
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Just curious, why would you withdraw cash and not request a cashier's check? My bank will recognize a cashier's check from a bank it is familiar with as cash.
The bank from which I withdrew the funds wanted $10 to issue a cashiers check. I am a cheap bastard and did not see any point in paying them $10 for a cashiers check when I could get cash for free, drive the 2 miles (in a very safe area), and deposit it.

There are probably a number of reasons why this was a dumb thing to do. But, for better or worse, it is what I did.

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The banks have discretion to report a cash transaction over $3,000 (which they rarely do) and must report a cash transaction over $10,000.00.
Yes, I know about the reporting requirement. But what I am less certain about is what are the likely consequences of having these reported transactions, whether they play any role in DIF scoring, etc.

There is no structuring issue here -- it was one $20k withdrawal and one $20k deposit, and the sole purpose of the move was to move cash from a lower interest account to a higher interest account.
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Old 06-18-2016, 08:10 PM   #6
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I think 10k + triggers the patriot act if I recall. This is to put checks and balances for money laundering. If you move the money with a personal check, ACH, etc ... no issue. Using a bank check, money order or cash require the bank to file a report with the appropriate government agency. When you travel internationally customs requires travelers to report carrying more then 10k in total currency being transported for the same reason.
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Old 06-18-2016, 08:20 PM   #7
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Here is the deal: When a transaction involving more than $10,000 in cash is processed, most banks have a system that automatically creates a CTR electronically. Tax and other information about the customer is usually pre-filled by the bank software. CTRs since 1996 include an optional checkbox at the top if the bank employee believes the transaction to be suspicious or fraudulent, commonly called a SAR, or Suspicious Activity Report. A customer is not directly told about the $10,000 threshold unless they initiate the inquiry. A customer may decline to continue the transaction upon being informed about the CTR, but this would require the bank employee to file a SAR. Once a customer presents or asks to withdraw more than $10,000 in currency, the decision to continue the transaction must continue as originally requested and may not be reduced to avoid the filing of a CTR. For instance, if a customer reneges on their initial request to deposit or withdraw more than $10,000 in cash, and instead requests the same transaction for $9,999, the bank employee should deny such a request and continue the transaction as originally requested by filing a CTR. This sort of attempt is known as structuring, and is punishable by federal law against both the customer and the bank employee. Those who habitually run transactions just under the $10,000 threshold will likely subject themselves to scrutiny and/or the filing of a SAR.
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Old 06-18-2016, 08:51 PM   #8
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Here is the deal: When a transaction involving more than $10,000 in cash is processed, most banks have a system that automatically creates a CTR electronically. Tax and other information about the customer is usually pre-filled by the bank software. CTRs since 1996 include an optional checkbox at the top if the bank employee believes the transaction to be suspicious or fraudulent, commonly called a SAR, or Suspicious Activity Report. A customer is not directly told about the $10,000 threshold unless they initiate the inquiry. A customer may decline to continue the transaction upon being informed about the CTR, but this would require the bank employee to file a SAR. Once a customer presents or asks to withdraw more than $10,000 in currency, the decision to continue the transaction must continue as originally requested and may not be reduced to avoid the filing of a CTR. For instance, if a customer reneges on their initial request to deposit or withdraw more than $10,000 in cash, and instead requests the same transaction for $9,999, the bank employee should deny such a request and continue the transaction as originally requested by filing a CTR. This sort of attempt is known as structuring, and is punishable by federal law against both the customer and the bank employee. Those who habitually run transactions just under the $10,000 threshold will likely subject themselves to scrutiny and/or the filing of a SAR.
Thanks. So where does that leave a guy like me who tells the teller "I want to withdraw $20k cash." The teller says "if you do that, I need to file a report." I say "OK, sure, do whatever you need to do." Then I get my $20k, drive down the road, and deposit the $20k in another bank, thus generating, I think, another report. Any concern?
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Old 06-18-2016, 09:01 PM   #9
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If it's legal there's nothing to be worried about, but I understand the concern and think something's wrong with the system if any of us gets hassled for doing legal things. If that happens, post about it and I suspect a group will rise to support you by making similar large xfers so as to overload the system.
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Old 06-18-2016, 09:13 PM   #10
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I wouldn't worry about it. It's a one time thing. They'll file the report with the treasury and you're on your way. If ever questioned, you have a solid paper trail from where you got the cash (a withdrawal) followed by what you did with it (deposit, presumably minutes later at a bank a couple miles away).

The IRS might care a lot more if you suddenly deposited $20,000 in cash without any explanation where you got it from, and they suspected you earned the money from some business activity or under the table employment.
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Old 06-18-2016, 10:01 PM   #11
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Thanks. So where does that leave a guy like me who tells the teller "I want to withdraw $20k cash." The teller says "if you do that, I need to file a report." I say "OK, sure, do whatever you need to do." Then I get my $20k, drive down the road, and deposit the $20k in another bank, thus generating, I think, another report. Any concern?
Why not a cashiers check, which avoids the risk of being robbed? Anyway I wonder how many branches could handle that big a withdrawal in cash without prior notice. (I suspect most branches tend to have on hand cash to handle the days transactions plus some margin). I do suspect the people on both ends would rather handle the cashiers check than have to handle the 2000 bills involved.
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Old 06-18-2016, 10:07 PM   #12
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If the banker asked you what it was for, and you said "none of your business", expect your account to be closed.
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Old 06-18-2016, 10:49 PM   #13
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I always think it kind of funny practically needing permission to access your money. I guess in the bank's view (at least according to the rules they have to follow), they think the money is dirty money .
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Old 06-18-2016, 10:56 PM   #14
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Now I'm really tempted to withdraw $20k just for kicks to see if they give me grief (or men in suits come seize me).

If they ask what I'm doing with the cash I'll tell them I'm playing Monopoly with it for fun because that's what you can do when you have $20k sitting in the bank drawing 1% interest.
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Old 06-18-2016, 11:18 PM   #15
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Now I'm really tempted to withdraw $20k just for kicks to see if they give me grief (or men in suits come seize me).

If they ask what I'm doing with the cash I'll tell them I'm playing Monopoly with it for fun because that's what you can do when you have $20k sitting in the bank drawing 1% interest.
Keep us updated.
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Old 06-18-2016, 11:18 PM   #16
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If the banker asked you what it was for, and you said "none of your business", expect your account to be closed.
I've done it many times at banks and have never been asked what it's for (withdrawals) or where it came from (deposits). I'm sure they are filling out CTR's "as required". No big deal.

Casinos have the same CTR and SAR requirements as banks and on an individual basis they probably fill out many more of these forms on a daily basis than most individual banks. They certainly don't ask.
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Old 06-18-2016, 11:39 PM   #17
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About a month ago I had to replenish my remodeling account. I thought it was odd that they wanted to know why I was wire transferring $x, now I know! The conversation wasn't casual, I had the feeling they were filling out a form. I was a bit annoyed, it was my money after all and frankly, it was none of their business.
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Old 06-18-2016, 11:49 PM   #18
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A few weeks ago I wanted to move some money from one bank at which I have an account to another. For reasons I won't bore you with, I was not able to make an electronic transfer. The two banks have branches 2 miles down the road from one another. So I went to the first bank, withdrew $20,000 in cash, the went to the second bank, and deposited the $20,000.

Was online bill pay from your first account to your second account not an option? I do that with a few thou at at a time between my accounts at two banks. Have one coming up for 40k+ so hope my bank's bill pay doesn't have a limit below that.
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Old 06-18-2016, 11:49 PM   #19
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I get my $20k, drive down the road, and deposit the $20k in another bank,
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I do suspect the people on both ends would rather handle the cashiers check than have to handle the 2000 bills involved.
Use one hundred dollar bills. It only takes 200 one hundred dollar bills to make 20k.
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Old 06-19-2016, 12:04 AM   #20
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Absent electronic transfer, my preferred method for this transaction (which I have done a few times) would be to take my chequebook for Account at Bank A to Bank B, write a cheque to myself, and deposit it in person, making sure to get the receipt. I would also let Bank A know about the imminent withdrawal. I would not carry that much cash between banks, and I see no reason to invite unnecessary scrutiny or a tax audit.
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