Do banks report EFT's....???

tgoodm1 · Aug 17, 2003

I would just like to know if banks report money transferred into one's bank account to the IRS after so much money is sent by one company, such as Neteller or Firepay.

Here is a hypothetical example in less than a two month timeframe of EFT's to one's bank account: $2500, $1500, $2000, $2500, and $2300. That comes to $10,800 in less than 2 months.

I would appreciate any feedback.

Fishhead · Aug 17, 2003

oldmantime · Aug 17, 2003

bump
I really hope you get some informed answers here, but would suspect they will only be guesses at best. The only people that would KNOW would be some of the folks at IRS or high ups in the banks themselves and they ain't saying. (My guess and that's all is sorta like what The General suggested a few days ago. It may simply depend on how bored someone is, etc.) But I would think the more standard answer might be concerned with other things --such as how long the acct has been opened, is this an every two month occurrance or a one-time thing. Basically, I am only guessing!

lander · Aug 17, 2003

I use direct deposit at my job, so wouldn't many of us be reported for our normal 9-5's if this were the case?

sean8499 · Aug 17, 2003

US banks are required to keep records of any wire transfer $3k or higher. Amounts higher than $10k are routinely reported to federal government, although I'm not sure which branch actually receives the information. In the post 9/11 environment, financial institutions are now required to report ANY suspicous transactions. Not sure what all this means to the average gambler. Has anyone on this board ever received an official inquiry or tax related question that stemmed from a large wire transfer???

WildBill · Aug 17, 2003

Sorry I didn't get to this quicker, but just understand that the rules are exactly the same as in a casino. The general rule is $10,000 in transactions in a 24 hour period must be reported with a CTR (Cash Transaction Report). Amounts of $3,000 or more require the location to take your drivers license info or something that is a positive ID and keep a record of it just in case you make multiple transactions. The place you do this business at is also supposed to check those 3k transactions and add them up to make sure that you indeed did not go past 10k over the 24 hours. If you did not do that then they are not required to file a CTR. They do have to keep those smaller transactions on file for something like a year, but that is purely in case an authority wants to investigate you. There is no crime for making these transactions and a vast majority of them do not get investigated so don't think that just because a CTR is filed that you will be ringing some gigantic bells or something. What they basically are used for is to build a case for prosecution, almost always by the IRS. If you are reporting that you make 25k a year on your 1040 and they see that you have 7 CTRs for over 10k they are going to immediately know something is up and your chances of an audit are quite good I would guess. If you are making 250k and you get 2 reports 6 months apart they probably don't even get alerted to it. So just keep in mind that this isn't intended for some feds to just sit over and watch the CTRs roll in, its a resource they have to use properly and with some safeguards for your privacy and innocence. Yes some people have gotten snagged by it, but for the most part it hasn't really caused too much trouble except for the institutions that have to spend millions in meeting the system's requirements.

printman · Aug 17, 2003

Why is it if I make money in another country do I have to pay taxes to this government? It doesn't make sense. If I had a job in England and brought my money here I don't pay taxes here

Woody0 · Aug 17, 2003

<BLOCKQUOTE class="ip-ubbcode-quote">quote:<HR>Originally posted by printman:
Why is it if I make money in another country do I have to pay taxes to this government? <HR></BLOCKQUOTE>

It depends on the tax treaties between the two governments. Usually they are structured so that you pay tax on your world income in your country of residence.

fathead · Aug 17, 2003

<BLOCKQUOTE class="ip-ubbcode-quote">quote:<HR>Originally posted by printman:
Why is it if I make money in another country do I have to pay taxes to this government? It doesn't make sense. If I had a job in England and brought my money here I don't pay taxes here<HR></BLOCKQUOTE>

If you live and work abroad and have EARNED income, you are exempt for a certain amount (I think the first 80K). Gambling winnings are not earned income and the IRS wants their cut, no matter where you won it.

WildBill · Aug 17, 2003

There is also some credit you get for paying taxes to a foreign government. The rates are so high in places like the business capitals of Europe and Asia, the places that most highly paid expats go, that there is little tax liability if any for those that were originally targeted. From what I understand this thing is a relic of many decades ago when rates and paying taxes wasn't a given in much of the world and the US government had sky high rates with some rich people having marginal rates of 90% that they did it to make sure people were just getting theoretically stationed overseas to avoid the tax. There have been a couple attempts in recent years to repeal it, but the populists just see too many dollars and relatively few taxpayers. These people after all are overseas and sort of out of sight and out of mind.

Amitightornot · Aug 17, 2003

In what countries you dont have to pay tax on your gambling winnings? Which countries are tax free?

oldmantime · Aug 18, 2003

"suspicious activity" means?

In other words they can do whatever "They" want at any time.
So pay your taxes-report all income see a tax accountant and two attorneys from different firms, join the crurch of your choice and PRAY!

LOL---As I said earlier-"guesses"

fathead · Aug 18, 2003

<BLOCKQUOTE class="ip-ubbcode-quote">quote:<HR>Originally posted by Am i tight or not?:
In what countries you dont have to pay tax on your gambling winnings? Which countries are tax free?<HR></BLOCKQUOTE>

My understanding is that gambling winnings are only taxable in two countries, the United States and the Phillipines.

WildBill · Aug 18, 2003

Suspicious activity is in the judgement of the institution, not the government Oldman. A couple of court cases have exonerated institutions when government charged they should have treated fairly normal occurences as suspicious, basically because later on there were criminal charges brought. The courts ruled that quite obviously investigation of entities is supposed to be done by law enforcement, not bank officials.

marc · Aug 18, 2003

Wildbill,

If I have a credit card bill for over $10,000 and I pay it, does the bank that issued the card have to fill out a ctr, since I sent them over $10,000

blueedwards · Aug 18, 2003

my bank only reports cash transactions. efts are like checks...some people have every single bill electronically paid for out of their checking account. its the cash transactions they are worried about.

with an eft, there is a trail just like with a check. suspicion gets raised when big time cash in invloved because there is no trail with cash.

oldmantime · Aug 18, 2003

Well, Wild Bill
In the court cases that you mentioned, I would be willing to bet, that somewhere down the line, (maybe not in the particular case mentioned) charges were brought a bit later against someone, which meant they had to hire an attorney. Now then as for as the term "institution" not referring to the government, that is all well and good. But in the way financial matters usually play out, if someone--be "they" the government or some other "financially interested party" figures that "they" did not get "theirs" litigation usually follows. See the lawyers get paid from each side--so-if "they" can find some hint of a problem, then it matters not who is hurt as far as those greedy #as%a#$s are concerned! "John Q. Public" is still the one that is hurt. If you trust a bank to be "on your side"--well more power to you. Thanks for the info you provided, it was appreciated. ("Both sides played hard")

tgoodm1 · Aug 18, 2003

Thanks guys! This is all very insightful and informative.

rowland · Aug 18, 2003

I asked a bank worker about this and he said that only cash transactions of over $10k in one day will be a problem. Banks are the most regulated business in the world and they hate to deal with the government more than anyone else. Banks do not care how much money you have in there. They actually want your money. He says it doesn't matter if you make minumum wage and have a bank account of over $100k, or deposit $5k every day. The banks need your money to make more money. Why would they go and try to bust you. If then, the IRS would need a search warrant to go into your account which then, even takes years to do. You could get a safe deposit box, which the IRS cannot legally look inside, and stash your money in there. Like Blue Edwards says, cash is untracable, so cash is what they have to worry about. You could make a $10k deposit by check and it would be okay. There wouldn't be any other reason to look into your bank account.

So to answer the question, EFT's are okay. It's from one account to another and there is no real money involved.

Well this is the best information I have heard on this topic. Can anyone else validate this info? I still find mixed responses on this topic like the ones on this thread.

blueedwards · Aug 18, 2003

rowland, its not about a bank trying to bust you. its about a bank complying with regulations. $10,000 in cash in one 24 period will trigger reporting. someone suspected of trying to circumvent this (i.e. deposits $9,500 on monday, then $8,000 on tuesday, etc) can be required to file a report as well. this is a judgement call by the tellers.

as far as eft's...they are not reported. however, if the gov't wanted to, they could probably pass a law requiring banks to provide info on "neteller" transactions. but, no bank would do this on its own. they only act in response to regulations and in their own best interest.