by Prof. William H. Byrnes IV and Robert H. Munro *
The Bank Secrecy Act, which sets standards for financial institutions for identifying and preventing money laundering, provides that a Currency Transaction Report, or CTR, must be filed with IRS when there is a currency transaction of $10,000 or more. [Bank Secrecy Act. http://www.ffiec.gov/.] The Financial Crimes Enforcement Network (FinCEN) oversees and enforces the Bank Secrecy Act, and so a CTR is filed using the IRS/FinCEN Form 8300.
When there are multiple transactions done within one business day that add up to $10,000 a CTR must be filed. If there are multiple transactions within one business day done by different people in to the same account and the transactions equal a value of $10,000 a CTR must be filed.The Financial Crimes Enforcement Network applies, oversees, and enforces the Bank Secrecy Act. The Bank Secrecy Act determines standards and requirements for financial institutions with regards to identifying and preventing money laundering.A CTR is filed by using the IRS/FinCEN Form 8300. Form 8300 can be filed electronically with the Bank Secrecy Act or it can be filed by mailing in a hard copy to the Internal Revenue Service.Individuals and businesses alike must file a CTR when they receive one cash transaction that is $10,000 or more or related cash transactions that aggregate to $10,000 or more. The customer/client must be notified when a CTR is filed as a result of their transaction. However, if there is a suspicious activity detected, the customer/client must not be notified that they are under suspicion of a suspicious activity.
What is a Transaction?A transaction is an original occurrence that results in the transfer of cash. Examples of transactions include but are not limited to the following:Sale of goods, services or real or intangible property;Rental of goods or real or personal property;Cash exchanged for other cash;Establishment, maintenance of or contribution to a trust or escrow account;A loan repayment; andConversion of cash to a negotiable instrument such as a check or a bond.Related TransactionsThere are two types of transactions that are considered to be related transactions. The two types of related transactions are:Transactions between a buyer, or agent of the buyer, and a seller that occur within a 24-hour period are related transactions.Transactions more than 24 hours apart are related if the recipient of the cash knows, or has reason to know, that each transaction is one of a series of connected transactions.The following are examples of related transactions:1. If a person goes in to a motorcycle dealership and purchases a motorcycle for $9,000 in cash then returns later that day to the same dealership to purchase a motorcycle for his wife for $9,000 in cash, the dealership must file a Form 8300. The dealership is required to file the Form 8300 because the two transactions are related and they occurred within a twenty-four hour period.2. If a customer pays a travel agent $7,000 in cash for a trip then a few days later pays the travel agent $4,000 in cash to add another person to the trip, the travel agent must file a Form 8300 because the two cash payments are related transactions.The following are example of unrelated transactions:1. If a person purchases a vehicle for $8,000 in cash from a dealership then returns to the dealership within the following twelve months and pays $3,000 in cash for additional items (such as a new paint job, tint, new tires) the dealership does not have to file a Form 8300 because the two transactions are unrelated.2. If a person buys an item for $6,000 in cash from a business then returns about eight weeks later to purchase a different item for $5,000 in cash the business does not have to file a Form 8300 because the two transactions are unrelated.The following is an example of a transaction that can be considered related or unrelated:
* Prof. William H. Byrnes, IV is the Associate Dean of the Walter H. & Dorothy B. Diamond International Tax & Financial Services Graduate Program. He has achieved authoritative prominence with more than 38 book and compendium volumes, 93 book, treatise and supplement chapters, and 800 articles. Professionally, William Byrnes left Coopers and Lybrand as an Associate Director to full time academia wherein he pioneered online legal education in 1995, thereafter creating the first online LL.M. offered by an ABA accredited law school. He trains and supervises more than 200 professional and government LLM and JSD candidates annually for international tax and money laundering compliance.Dr. Robert J. Munrois Professor of Law at Thomas Jefferson School of Law in San Diego, CA. and a Senior Research Fellow and Director of Research for North America at CIDOEC at Jesus College, Cambridge University. He holds Masters degrees from the University of Iowa and Louisiana State University, a Juris Doctor from the University of Iowa and a Ph.D. from the University of Florida. He has done further graduate studies at Cambridge University, Oxford University and the Institute of Advanced Legal Studies at the University of London. He is the author of thirty-two published books, including the five-volume treatise, Money Laundering, Asset Forfeiture and Recovery and Compliance, the three-volume Cybercrime and Security, the three-volume Tax Havens of the World, and Foreign Tax and Trade Briefs, Second Edition.
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