FlyerTalk Forums - View Single Post - Spending $250K for Centurion, How About IRS? Large Cash deposits out of your league?
Old Aug 16, 10, 2:17 pm
Join Date: Sep 2009
Location: RNO/SFO
Programs: UA1P, Global Entry
Posts: 326
Originally Posted by taipeiflyer View Post
sorry, but he is not smurfing at all... he is not trying to break up transactions into smaller transactions... he is in fact trying to make bigger purchases, by not only buying his stuff but everyone else's too.
Originally Posted by andrewpartyman View Post
Any banking transaction of $10k or more in cash has to be reported to the IRS. Checks, wire transfers, etc. are not held to this as there is a paper trail. If this man were to refund you with a check there is no problem.

The actual problem is that every transfer he gives you over about $12k (I think that's the limit for a tax-exempt "gift") is subject to U.S. income tax. So every time you received money from him, you would have to pay taxes therefore making every transaction with him a losing one. Wouldn't take long to be in the 35% tax bracket, therefore making your 60k/year base salary worthless when it is taxed at 35% + state income tax + medicare tax + social security. Going to work would suck for you.
Originally Posted by thissnisnottaken35 View Post
As long as you do the proper paperwork, it doesn't matter that you'll have banking transactions over $10k. It's just a flag for the IRS -- and if you're keeping your records on the up-and-up, you'll survive an audit.
Originally Posted by boncovi View Post

Cash transactions over 10K has to be reported by the bank. I know if you go and deposit 9K every other day, you may receive a letter from the bank telling that you're trying to avoid $10k threshold, be careful.

Authorities come knocking on your door and searching your house to see if you're selling drugs, or do you get audited by IRS?

On the other hand, how do you get taxed on personal buying/selling activities? Let's say I buy a single item for $9,000. I post an ad on craigslist, sell it for $9,000. I get paid cash, it's under threshold, and I did not make any income because I sold it at no profit, so nothing to get taxed. I do this 300 times and flipped $270,000 in cash, all deposited to my checking account in cash and transferred to Amex to pay the bill. How about that? Technically, I did not go above $9K at all, and I did not make any income.
Deliberately trying to avoid the mandatory filing requirements, no matter the intent, is smurfing. The OP's intent is to hide the source of the funds, and even if for a legitimate purpose, the IRS CID wouldn't care, because the OP intended to avoid the taxes by structuring his transactions that way.

Either way, it's a bad move. If the OP wants to be a reseller, then he should start a business, and pay the taxes to be a reseller. Once he discusses trying to deposit $270K+/yr in cash without reporting to the IRS, that's a crime.


There's a reason that business charge a markup. It's for the taxes, fees, and overheads. If things were this simple, then there would be no middle men because they couldn't make money!
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