This may have been answered a few places but I am sure many people don't know what the limits that will trigger a Finacial Review or an account shutdown or even a Audit from the Gov't or perhaps a investigation about moving money.
So perhaps for Money Orders what $ amount is Max yearly?
I thought I read somewhere 100k but not sure.
What about running money through ATM's from Cards and depositing it into banks?? I know 10k Cash is Taboo and there is some type of bank form for 5k Cash that may be filled out on you.
I am sure deposit amounts and CC spend amounts vary greatly on the persons history and income and assets and that changes to spend can cause red flags.
What about taxes owed if you earn 100k airline miles or 500k??
Are you for real? It is illegal -- a federal offense -- in America to give people advice on how to structure payments to avoid federal reporting requirements. I have alerted this thread.
FinCEN enforces anti-money laundering compliance as it relates to monetary instrument sales (cashier's checks, money orders, travelers cheques, etc) purchased with cash or cash equivalents. They also monitor (with the help of bank employees) large currency movement in excess of certain dollar amounts per day. These thresholds are listed in the link above.
Just because you're 'under the limit' does not mean a bank representative or their corporate LPs haven't flagged or reported your activity as suspicious...
The statement that he avoids depositing etc. $10K or more a day is a confession of structuring under the Money Laundering Act of 1986 for starters. To advise others how to structure payments is also structuring. Honestly, the entire thread should be removed. The first post is a clear violation. If you want more discussion, ask an attorney with experience in this area and in the area of forfeiture. This guy is playing with fire, and I'm OUT of this discussion. He's just asking to have his bank account and his cash seized. The act of structuring is illegal. Moving cash openly and honest is NOT illegal. All they're asking you to do is comply with the rules and file (or have filed) the proper document. What is so hard about having a proper currency report filled out if you have a certain amount of money? Nothing, if you're honest. Takes but a few minutes.
Quote:
Originally Posted by flatus
I think he's asking what the limit is, not how to get around it. Is this really illegal to ask? Can you provide a legitimate reference?
This may have been answered a few places but I am sure many people don't know what the limits that will trigger a Finacial Review or an account shutdown or even a Audit from the Gov't or perhaps a investigation about moving money.
So perhaps for Money Orders what $ amount is Max yearly?
I thought I read somewhere 100k but not sure.
What about running money through ATM's from Cards and depositing it into banks?? I know 10k Cash is Taboo and there is some type of bank form for 5k Cash that may be filled out on you.
I am sure deposit amounts and CC spend amounts vary greatly on the persons history and income and assets and that changes to spend can cause red flags.
What about taxes owed if you earn 100k airline miles or 500k??
Your questions are incredibly broad and you might want to google a few keywords if you want to learn more: Currency Transaction Reports, Structuring, Suspicious Activity Reports. The flyertak threads on dollar coins and 1099s from banks have some good reading material.
In general, financial institutions must file Currency Transaction Reports for deposits of cash (including money orders made out to yourself) of 10K or more. These financial institutions must keep internal paperwork for deposits between 3K and 9.99999K, not for 5K or more like you suggested in your question. A lot of Currency Transaction Reports get filed each year, so it is not clear if the filing of one of these really increases the likelihood that you will get investigated.
It is a felony called Structuring to arrange your deposits to avoid having the bank file a Currency Transaction Report. You do not want to obtain 12K and then deposit 8K at one bank branch and 4K at another branch of that bank. Money really does get seized by the government and people really do go to jail for Structuring, as wrong as that seems.
Most Structuring is discovered by banks filing Suspicious Activity Reports. Banks file these forms with the government when they feel that something suspicious is occurring. Usually you can tell this is happening because they ask for information from your Drivers License, even though you did not deposit more than 10K. Resistance is futile and it looks worse when they file the Suspicious Activity Report and say the guy's face turned green and he ran out of the bank. Most of us who get miles from financial transactions have probably had these filed. Like CTRs, it is not automatic that the receipt of a SAR causes the government to investigate you. A lot of SARs get filed, although not as many SARs are filed as CTRs.
Certainly, depositing a lot of money orders (made out to yourself) at the bank increases the risk of a SAR being filed, but no one knows how great that risk is.
None of use will ever agree as to the taxation of miles, or the value (if any) of miles and points for tax purposes. There are a lot of tax rules such as the Rebate Rule that many posters believe will allow miles to often be earned without the inclusion of any amount in taxable income as a result of the receipt of miles. This Rebate Rule is a little harder to apply when earning miles through purely financial transactions, so the argument for little or no value of miles/points becomes more relevant. I get amused by the people arguing in the Valuation thread that their miles are worth the retail cost of a first class ticket (which no one actually pays) without considering the negative tax consequences of such an argument. Once again, check out the 1099 thread for more information.
The statement that he avoids depositing etc. $10K or more a day is a confession of structuring under the Money Laundering Act of 1986 for starters. To advise others how to structure payments is also structuring. Honestly, the entire thread should be removed. The first post is a clear violation. If you want more discussion, ask an attorney with experience in this area and in the area of forfeiture. This guy is playing with fire, and I'm OUT of this discussion. He's just asking to have his bank account and his cash seized. The act of structuring is illegal. Moving cash openly and honest is NOT illegal. All they're asking you to do is comply with the rules and file (or have filed) the proper document. What is so hard about having a proper currency report filled out if you have a certain amount of money? Nothing, if you're honest. Takes but a few minutes.
I did not perceive his question as how to do anything illegal or how to commit Structuring. I certainly do not intend to give anyone financial or tax advice, and I hope that no one would consider things they read on an anonymous message board to be such advice. Most people do not know the basics of currency transaction reports or Structuring, and threads like this are useful. A lot of people would have committed Structuring with their dollar coins if the discussion of Structuring did not occur in that thread, so I think the issues are worth discussing. Many of the normal transactions such as prepaid cards with ATM withdrawals present these issues.
Maybe I'm reading this different than everyone else but I interpret his question to be around staying under the radar. Buying MOs for points is not illegal. If you really want to stay under the radar do about $1,000 a week. That's a nice 50,000 points.
I suggest also that you don't BS or lie to the cashiers or tellers about it. If you tell them it is for points and then later have a government entity get involved you will not have to play games. Keep good records and be prepared to share them if you need to. The truth is always your strongest defense unless you are a criminal.
In my opinion your real risk is the bank you are depositing to will shut you down as a fraud/security risk. Be sure you can live with that account being frozen for a few weeks if they decide to close it on you. They can sit on your money for something like 10 business days AND be real slow about getting you a check.
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As an aside, I have a friend who is another business owner in Montana and with a bakery and restaurant they do a lot of cash business. In order not to have to take the time to fill out the paperwork on over $10K deposits, they kept doing $9K deposits. One day 2 guys with badges showed up at their home (not business) and wanted to know what they were up to. It took a lot more time than the paperwork!! My friend is so vocal, i am surprised that she did not end up in jail!!
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Quote:
Originally Posted by Nottafatslob
What about taxes owed if you earn 100k airline miles or 500k??
This one we can answer, right?
In general, frequent flier miles earned from flying or from credit cards are not taxed.
Off the top of my head, the only cases I know where you'll get a 1099 for miles are:
- miles won as a prize in a contest, raffle, or sweepstakes.
- miles awarded as a bonus for Citi bank accounts (other banks don't do this, and Citi doesn't do this for credit cards, only for bank accounts)
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In general, frequent flier miles earned from flying or from credit cards are not taxed.
Off the top of my head, the only cases I know where you'll get a 1099 for miles are:
- miles won as a prize in a contest, raffle, or sweepstakes.
- miles awarded as a bonus for Citi bank accounts (other banks don't do this, and Citi doesn't do this for credit cards, only for bank accounts)
We would like to think, or at least hope, that miles earned from credit card spending are nontaxable but that may not always be the case. The reason that the miles are usually viewed as nontaxable is the Rebate Rule, which allows the user to reduce the basis of what he purchases with the card by the fair market value of the miles (if any). Usually there are no tax consequences to this. But if Nottafatslob has figured out how to purchase 100K of money orders with his credit card, and he deposits the 100K and uses the funds to pay his credit card bills, it is hard to figure out how to apply the Rebate Rule in a manner to escape tax consequences if the miles/points do, in fact, have any value. If the miles theoretically had a value of 1K, it looks like he deposited 100K of cash with a basis of 99K and then withdrew the 100K. Some would argue that this results in 1K of taxable income and it makes everyone's head explode who tries to reason it through. That is the reason the tax results are easier if the miles are worth $0.00 instead of 1K. It is not something most people worry about because the credit card company will not issue a 1099 to Nottafatslob in this situation.
The statement that he avoids depositing etc. $10K or more a day is a confession of structuring under the Money Laundering Act of 1986 for starters. To advise others how to structure payments is also structuring. Honestly, the entire thread should be removed. The first post is a clear violation. If you want more discussion, ask an attorney with experience in this area and in the area of forfeiture. This guy is playing with fire, and I'm OUT of this discussion. He's just asking to have his bank account and his cash seized. The act of structuring is illegal. Moving cash openly and honest is NOT illegal. All they're asking you to do is comply with the rules and file (or have filed) the proper document. What is so hard about having a proper currency report filled out if you have a certain amount of money? Nothing, if you're honest. Takes but a few minutes.
We would like to think, or at least hope, that miles earned from credit card spending are nontaxable but that may not always be the case. The reason that the miles are usually viewed as nontaxable is the Rebate Rule, which allows the user to reduce the basis of what he purchases with the card by the fair market value of the miles (if any). Usually there are no tax consequences to this. But if Nottafatslob has figured out how to purchase 100K of money orders with his credit card, and he deposits the 100K and uses the funds to pay his credit card bills, it is hard to figure out how to apply the Rebate Rule in a manner to escape tax consequences if the miles/points do, in fact, have any value. If the miles theoretically had a value of 1K, it looks like he deposited 100K of cash with a basis of 99K and then withdrew the 100K. Some would argue that this results in 1K of taxable income and it makes everyone's head explode who tries to reason it through. That is the reason the tax results are easier if the miles are worth $0.00 instead of 1K. It is not something most people worry about because the credit card company will not issue a 1099 to Nottafatslob in this situation.
Let's not forget the money orders come with a fee. Perhaps the fee is his basis for the miles, or the miles are a rebate for those fees.
The statement that he avoids depositing etc. $10K or more a day is a confession of structuring under the Money Laundering Act of 1986 for starters. To advise others how to structure payments is also structuring. Honestly, the entire thread should be removed. The first post is a clear violation. If you want more discussion, ask an attorney with experience in this area and in the area of forfeiture. This guy is playing with fire, and I'm OUT of this discussion. He's just asking to have his bank account and his cash seized. The act of structuring is illegal. Moving cash openly and honest is NOT illegal. All they're asking you to do is comply with the rules and file (or have filed) the proper document. What is so hard about having a proper currency report filled out if you have a certain amount of money? Nothing, if you're honest. Takes but a few minutes.
Seriously read the post I never said I avoided anything and only asked the LEGAL LIMITS for transactions.
Last edited by Nottafatslob; Dec 25, 12 at 7:01 am..
Reason: sp
