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Do Banks Collect all Transaction Information? Do they report it to the IRS?
06.11.05 | mlmr

Posted on 06/11/2005 4:42:00 PM PDT by mlmr

Do banks collect all infomation from checks cashed if you are a customer? IOW...if one cashes a 15 dollar check, is it put into the same system as one's own checks that are copied and stored?


TOPICS: Government; Your Opinion/Questions
KEYWORDS: bank; irs

1 posted on 06/11/2005 4:42:01 PM PDT by mlmr
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To: mlmr

When I used to work for a bank a million years ago we used to photo every check that went through the place.


2 posted on 06/11/2005 4:45:39 PM PDT by rhombus
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To: rhombus

They seem to be inputting the check into the computer and attaching it to my account.


3 posted on 06/11/2005 4:48:13 PM PDT by mlmr (CHICKIE-POO!)
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To: mlmr

Yes. Every transaction is available to the IRS and the FBI, and they have plenty of bank examiners to deal with the info. Where do you suppose all those business majors end up?


4 posted on 06/11/2005 4:49:23 PM PDT by RightWhale (I know nothing, and less every day)
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To: mlmr

I think the bank reports large transactions like 8,000.00 or more deposited or cashed, etc. If you cash or deposit 2 - 4,000.00 amounts in one week, it would not be reported. The number may be larger, like 10,000, but it is somewhere thereabouts.
It has something to do with terrorism. My dad had saved a large amount and he deposited it in his account so he could by stocks with it. The bank can't give you info like that, but he knew to make two deposits like 6,000 each, I beleive. This was a month or two ago.


5 posted on 06/11/2005 4:49:24 PM PDT by texas_mrs
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To: texas_mrs
The bank can't give you info like that, but he knew to make two deposits like 6,000 each, I beleive.

That's called structuring. It's a federal crime. A single cash deposit for the whole amount would, on the other hand, have been perfectly legal but reported by the bank.

6 posted on 06/11/2005 4:55:05 PM PDT by PAR35
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To: PAR35
It's a federal crime.

Does it depend on intent?

7 posted on 06/11/2005 4:56:50 PM PDT by RightWhale (I know nothing, and less every day)
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To: mlmr

My brother works for a bank. Any cash deposit over 10 grand must be reported to the IRS, by law.


8 posted on 06/11/2005 4:57:26 PM PDT by Jenya (Terrorism. Bush gets it.)
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To: RightWhale
IRS and the FBI, and they have plenty of bank examiners

No, they don't have ANY bank examiners. The FDIC does, the states do, the Fed does. Of course, all of the relevant info finds its way into FINCIN.

9 posted on 06/11/2005 4:58:27 PM PDT by PAR35
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To: RightWhale

So if I go into a bank and cash a 15 dollar check that is written to me either one of the bank's accounts or another bank's account....it is tracable to me by the IRS?


10 posted on 06/11/2005 5:02:17 PM PDT by mlmr (CHICKIE-POO!)
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To: PAR35

There was a time when I thought about being a Federal bank examiner. GS-5, the position description may not have said Bank Examiner, but it was FBI and it was bank books.


11 posted on 06/11/2005 5:02:20 PM PDT by RightWhale (I know nothing, and less every day)
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To: RightWhale
Does it depend on intent?

Yes, but the intent is to strucure the transactions so as to stay below the reporting limits. And they are likely to presume intent if things happened that way. If you have a good explanation as to why it happened that way, then you may have a good defense.

From the explanation given above, it sounds like he clearly was trying to avoid the reporting requirements.

12 posted on 06/11/2005 5:04:50 PM PDT by PAR35
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To: mlmr

Should be, although the name might not be unique, your bank would have your account number. Even though my music career is not full-time pro, I report my music income on the income tax deal even if the employer obviously did not report since they didn't bother to know even my SS number. IRS could track that down, and even though it is not worth their time to do so, I would save them the trouble.


13 posted on 06/11/2005 5:07:46 PM PDT by RightWhale (I know nothing, and less every day)
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To: mlmr

You seem mighty worried over a $15 check...why???


14 posted on 06/11/2005 5:09:31 PM PDT by Krodg
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To: PAR35

Yeah, maybe so if it was for a single stock transaction. If it happens regularly there could be a problem. If it was the same day, but different stock transactions at different times, it should not be a problem.


15 posted on 06/11/2005 5:10:08 PM PDT by RightWhale (I know nothing, and less every day)
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To: mlmr

A lot of banks now won't cash a check for you if you don't have an account. For example, if I wrote a check to you on my bank, and you took it there to cash it, they would turn you away. You would need to take it to your bank, where they would first make sure you had money in your account to cover it if the check turned out to be bad (and would might put a hold on the money in your account until the check cleared).

If you don't have a bank account, you would have to go to a check cashing business which would charge you a significant fee for assuming the risk.


16 posted on 06/11/2005 5:10:58 PM PDT by PAR35
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To: mlmr
Banks record every transaction with links to a holder's account. They can identify every transaction you make.

Banks do not give every transaction to the IRS. These are but a few samples.

Each year they give the customer 1099s for interest income on each account held, which also goes to the IRS.
If you deposit or withdraw "more than $10,000 they file a CTR -Currency Transaction Report with the IRS--but you know they do that as you are asked to sign the form. If the bank "suspects" you are "structuring" lower amount cash transactions, they can report you--without you knowing it.
The IRS can print what they call an "IRP"--Information Return Program, which lists all banks, brokers, house sales, etc etc at any given time.
If the IRS suspects a "taxpayer" is cheating on his taxes big-time by cashing his/her customer/client checks for cash, rather than depositing them in accounts--the IRS can and does supoena the taxpayers' bank records including such undeposited counter cash backs.
If anyone is doing this sort of thing, I know some excellent criminal tax attorneys in Southern California. haha
PS--Cashing out the likes of gift or refund checks draws no attention. Everybody does it...

17 posted on 06/11/2005 5:11:22 PM PDT by CharlieChan
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To: mlmr

"They seem to be inputting the check into the computer and attaching it to my account."

Yeah, they do that. My bank also deducts the amount of every check I write from my account. It's scary what they can do.




;^)


18 posted on 06/11/2005 5:13:16 PM PDT by RFEngineer
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To: RFEngineer
Yeah, they do that. My bank also deducts the amount of every check I write from my account. It's scary what they can do.

That can be downright frightening at times.

19 posted on 06/11/2005 5:31:07 PM PDT by scott7278 (Before I give you the benefit of my reply, I'd like to know what we're talking about.)
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To: scott7278

Hhhmmm, that explains why so many business establishments in town keep posting my checks on their walls. I thought it was because they were thrilled to have my autograph.....


20 posted on 06/11/2005 5:36:05 PM PDT by anniegetyourgun (Yes, I'm blonde)
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To: texas_mrs
The amount is $10,000 for cash transactions, and there is a limit of $3,000 for negotiable instruments like money orders, traveler's checks, etc.

(I write a newsletter for the banking industry every week.)
21 posted on 06/11/2005 5:38:02 PM PDT by jps098
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To: mlmr
They probably have access to all the banking information that they want and devote extra effort to looking into the financial affairs of people transacting money over a certain amount, or posting questions on internet BBS systems about how much they can get away with.

:-)

22 posted on 06/11/2005 5:38:19 PM PDT by krb (ad hominem arguments are for stupid people)
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To: anniegetyourgun

There's a business around here that has a LARGE poster of the names of people who have bounced checks right beside the cash register, in something like 60-point font with their hometown (it's a rural area). I'm surprised it didn't have their mother and father listed for further embarrasment.

Word gets around here, and so I said, "That must be an effective deterrent." She looked at me and said, "You would think so!"


23 posted on 06/11/2005 5:44:17 PM PDT by scott7278 (Before I give you the benefit of my reply, I'd like to know what we're talking about.)
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To: mlmr

I've heard that the bank has to report you if you ask any questions about the reporting procedures.


24 posted on 06/11/2005 5:46:11 PM PDT by Born to Conserve
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To: Krodg

Becasue I cashed 15 or 20 of them over the past year and never kept good track of them....I am a Neanderthal at bookkeeping ...I recently hired a bookkeeping and billing person...but it concerns me.


25 posted on 06/11/2005 5:46:30 PM PDT by mlmr (CHICKIE-POO!)
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To: mlmr

At least Rush's bank reports every transaction.


26 posted on 06/11/2005 5:47:32 PM PDT by righttackle44 (The most dangerous weapon in the world is a Marine with his rifle and the American people behind him)
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To: krb
"They probably have access to all the banking information that they want and devote extra effort to looking into the financial affairs of people...posting questions on internet BBS systems about how much they can get away with.

LOL!

27 posted on 06/11/2005 5:48:27 PM PDT by scott7278 (Before I give you the benefit of my reply, I'd like to know what we're talking about.)
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To: krb

I might as well just hang myself now....


I just never really thought about it until now. It isnt that much...perhaps 300 or so. With four children I would still be at the poverty level.

Does TurboTax have an I made a glitch refile section?


28 posted on 06/11/2005 5:50:44 PM PDT by mlmr (CHICKIE-POO!)
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To: Born to Conserve

I've heard that the bank has to report you if you ask any questions about the reporting procedures.

You're joking, right?


29 posted on 06/11/2005 5:51:46 PM PDT by mlmr (CHICKIE-POO!)
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To: PAR35

I don't think so. You can cash a check at your own bank OR at the bank it is drawn on. You do not need to have an account at the bank it is drawn on, just good ID.


30 posted on 06/11/2005 5:53:12 PM PDT by The Ghost of FReepers Past (Legislatures are so outdated. If you want real political victory, take your issue to court.)
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To: mlmr
absolutely... when you give them the check, they run it through a check reader that reads the magnetic numbers on the bottom lefthand side of your check and completes the transaction
31 posted on 06/11/2005 5:53:27 PM PDT by Chode (American Hedonist )
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To: mlmr

"You're joking, right?"

No.


32 posted on 06/11/2005 5:59:31 PM PDT by Born to Conserve
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To: Born to Conserve

Why?


33 posted on 06/11/2005 6:07:23 PM PDT by mlmr (CHICKIE-POO!)
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To: mlmr
Does TurboTax have an I made a glitch refile section

Yes. It's called an amended 1040.

But if you have only $300 that came in without some sort of 1099 form with it, then it probably looks like a gift. If it is business income that you didn't report, you can probably just report it on this year's 1040.

I'm not a tax dude, so YMMV as far as any point of view that I have...

34 posted on 06/11/2005 6:10:22 PM PDT by krb (ad hominem arguments are for stupid people)
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To: PAR35

As long as you have the required id, I don't understand why a bank would dishonor a check drawn on one of their accounts. Some banks now require a fingerprint along with ID and some even a charge a small amount for cashing a check drawn on them for a non-account holder. The only time I've had problems, the teller got in trouble for dishonoring the check.


35 posted on 06/11/2005 6:12:56 PM PDT by meatloaf
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To: mlmr

"Why?"

Because that's what I heard.

I would assume they want to know who is trying to 'structure'.

That's assuming it is true. I think I heard it on one of those crimestoppers type tv shows, which of course proves it must be true.


36 posted on 06/11/2005 6:15:09 PM PDT by Born to Conserve
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To: krb

It was a bunch of 15 dollar checks...not a gift.


37 posted on 06/11/2005 6:16:15 PM PDT by mlmr (CHICKIE-POO!)
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To: Born to Conserve

of course proves it must be true.



LOL


38 posted on 06/11/2005 6:16:50 PM PDT by mlmr (CHICKIE-POO!)
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To: mlmr
Hmmm, what would I do...

Well, and amended 1040 sounds like a pain in the buttocks. I think it means you have to redo a bunch of stuff, and if you hired help to get your first one done, you probably have to get their help to fix it.

But you are obviously paranoid about doing the wrong thing, so you probably need to do something to make sure your conscience is taken care of.

How about you just report it on this year's return, and in case the tax rates are lower this year than last year (because the Bush 2001 tax bill phased in tax cuts) you can check off that "$3 presidential campaign" box. ;-)

39 posted on 06/11/2005 6:21:01 PM PDT by krb (ad hominem arguments are for stupid people)
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To: mlmr

Oh yeah, if you want, you can pay "estimated tax" (i.e. the same thing self employed people are supposed to do) and just send in the taxable amount of the money now. That way, if anyome ever questions your motive in this whole sordid affair, you can show that as soon as you found out about the taxable income, you made sure the government had its share immediately, and you worked out the paperwork as you found the help.


40 posted on 06/11/2005 6:24:21 PM PDT by krb (ad hominem arguments are for stupid people)
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To: mlmr
No.
41 posted on 06/11/2005 7:39:10 PM PDT by b4its2late (Light travels faster than sound. This is why some people appear bright until you hear them speak.)
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To: mlmr

are you kidding me? you are worried about an under-report of $300? almost every self incorporated person in the US is cheating on their taxes - deducting leases on cars and boats they they have for personal use, but declare as business deductions. and you are worried about $300?


42 posted on 06/11/2005 7:45:37 PM PDT by oceanview
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To: meatloaf
I don't understand why a bank would dishonor a check drawn on one of their accounts.

They shouldn't, but some of the big ones don't even like their own retail customers, much less folks off the street. I know I read a story along these lines a few years ago, but I'm not coming up with it tonight.

43 posted on 06/11/2005 9:53:09 PM PDT by PAR35
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To: CharlieChan
If you deposit or withdraw "more than $10,000 they file a CTR -Currency Transaction Report with the IRS--but you know they do that as you are asked to sign the form. If the bank "suspects" you are "structuring" lower amount cash transactions, they can report you--without you knowing it.

Generally $5000 to generate a SAR, although in some cases smaller amounts are reportable if the bank should have reason to suspect them. It is easier to get in trouble for not filing a SAR than for filing:

"national banks are required to report known or suspected criminal offenses, at specified thresholds, or transactions over $5,000 that they suspect involve money laundering or violate the Bank Secrecy Act. Similar regulations by other regulators apply to other financial institutions."
http://www.occ.treas.gov/sar.htm

44 posted on 06/11/2005 10:04:42 PM PDT by PAR35
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To: PAR35

"Suspect" is the key word. This gives banks a big out. If any given bank is making appropriate contributions to the related congressional chairs, the "judgement call" often beats administrative enforcement, especially re dommestic institutions. I was among the first generation of certain federal employees to have password access to the Detroit CBRS Telnet system. During the 1980s banks completed ignored the law until BCCI hit the fan. Then there was Polar Cap, Midas, etc. Money Laundering/Bank Secrecy statutes have been upgraded since 1970s enactment, but not until 911 did DC politicians seem to wake up. I've been out of it for a few years, but I have no doubt the politics of Title 31 continues...


45 posted on 06/11/2005 10:55:29 PM PDT by CharlieChan
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To: PAR35
For example, if I wrote a check to you on my bank, and you took it there to cash it, they would turn you away.

A bank that is refusing to cash valid checks written against accounts at that bank to the named recipient? I don't think that would make the bank's regulator very happy to hear.

It's been a while since I read any of the relevant codes, but basically failure to honor the presentation of an valid instrument by the bank holding the account was not allowed. There's nothing that makes your bank's presentation of the same instrument somehow different than you presenting in person. Unless things have changed, then I would write a letter to the bank's regulator (likely the FDIC, but maybe the OCC or the OTS.)

I wouldn't have been surprised to hear about onerous conditions attached to the identification process; lately, it seems banks want DNA samples and fingerprints and maybe a copy of your last utility bill in order for identity purposes, but that's not the same as flat refusing to honor the check's physical presentation.

46 posted on 06/13/2005 2:58:49 AM PDT by snowsislander
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To: mlmr
The banks are required by law to report to the IRS all transactions of over $10,000. They'll still report it even if you try to keep it just under the amount that triggers the reporting. The feds want to make sure you're not hiding any income you don't want them to know about. If its illegal, you'll want to hide it under your mattress.

(Denny Crane: "Sometimes you can only look for answers from God and failing that... and Fox News".)
47 posted on 06/13/2005 3:04:05 AM PDT by goldstategop (In Memory Of A Dearly Beloved Friend Who Lives On In My Heart Forever)
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To: mlmr

I just never really thought about it until now. It isnt that much...perhaps 300 or so. With four children I would still be at the poverty level.

Does TurboTax have an I made a glitch refile section?

Given the above facts, the IRS is not going to care about $300 (unless you did something else) because 1) at the "poverty level" and 4 children there is probably some distance to even get to a taxable level of income, 2) the tax laws are so complicated the IRS is focusing on "substantially correct" not "100% correct", and 3) even if the $300 was taxable income, the tax would be about $30 and is not worth the cost the IRS would have to invest to get it.

48 posted on 06/13/2005 3:28:30 AM PDT by Victoria_R
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To: Victoria_R

Thanks. I get afraid when I think of dealing with big guys like the IRS.


49 posted on 06/13/2005 4:45:33 AM PDT by mlmr (CHICKIE-POO!)
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