Currency Transaction Reports: Has One Been Filed on You?

Plenty of otherwise innocent people are unaware that some of their large deposits or withdrawals to or from their bank are discreetly flagged in what is called a Currency Transaction Report (CTR). This report is completed by employees of financial institutions when cash transactions of $10,000 or more pass through the institution in some capacity. It also applies to transactions involving other negotiable instruments like Federal Reserve notes and foreign bank notes. 

CTRs have been around since the Bank Secrecy Act was passed in 1970 and signed by President Nixon; the purpose of the law was to tamp down on money laundering and other financial crimes. This blog will take a look at what happens when a CTR is completed, how your business can avoid one being filled out, and what can happen when you are caught trying to evade a CTR. 

Procedure

Let’s say, during what is likely an otherwise harmless transaction, you deposit $10,500 into your savings account. If your bank has kept up with the times, a CTR is automatically filled out when the deposit goes through. Tens of millions of CTRs just like yours are filed each year in the U.S., so it is not an uncommon occurrence. Within a Currency Transaction Report, there is a box for a teller or other bank employee to bubble in called a “Suspicious Activity Referral” if they believe extra scrutiny is warranted. One way the SAR is almost guaranteed to be checked off is if the individual that is initiating the transaction asks about a potential CTR. If they are informed that a CTR will be completed and then ask to cancel the transaction, then the SAR for that specific transaction will be filled in. 

Form 8300

It is common for businesses and merchants to deal with cash transactions that trigger a CTR. To potentially avoid one being filed, business entities can elect to complete Form 8300, which will absolve the bank from having to complete a CTR. This must be done within 15 days of the transaction’s completion. 

Structuring

One way people might try to get around a CTR is by breaking up payments into amounts of less than $10,000. For example, someone might deposit $6,000 in the bank on Monday and, on Friday, put in $5,000 to avoid triggering a CTR for a deposit totaled $11,000. This is actually considered a federal crime referred to as “structuring.” Penalties for structuring are surprisingly harsh: up to five years in prison and a fine of up to $250,000 (doubled if the structured payments totaled $100,000 or more in a consecutive 12-month period). 

Conclusion

Unless you operate a casino, cash withdrawals or deposits of more than $10,000 will get noticed by the financial institution you’re using and cause a Currency Transaction Report to be completed. In the vast majority of cases, this does not cause problems for the person or business initiating the transaction. However, it is not unheard of for FinCEN (Financial Crimes Enforcement Network) or the IRS to investigate sources of CTRs and recommend prosecution. 

If you are currently dealing with such a situation or any other dispute with the IRS, give Attorney Robert V. Boeshaar a call today at 206-899-0869. We offer complimentary 15-minute consultations with potential clients.

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