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Spending $250K for Centurion, How About IRS? Large Cash deposits out of your league?

Spending $250K for Centurion, How About IRS? Large Cash deposits out of your league?

Old Aug 15, 10, 4:41 pm
  #1  
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Question Spending $250K for Centurion, How About IRS? Large Cash deposits out of your league?

I'm a Green Amex charge card member for 6 months now.

I have spent $60K so far. Used for my expenses, bills, friends purchasing stuff over the internet, college tuition for another friend etc. etc.

I work in a retail business, electronics field, making $60k/yr.

We have a customer who buys stuff in quantities and somehow sells them to other countries. He always deals in cash.

He can easily spend $30k in a week, only with us. I know he shops around and buys many stuff, computers, cameras, ipads etc. from electronics stores, apple store etc. all legit places.

He's cool and we sit down and drink beer from time to time after work.

I know if I go and ask him if I could charge his purchases from merchants except where I work on my Amex and he reimburses me, he will say "no problem".

My question is, let's say I start charging his purchases on my card, will I have any problems with IRS or Police?

I checked my Amex spending ability and it's good up to $30k a month. I spend $25K a week for him, then he gives me $25k cash. This money has to go into my bank account. But how?

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.

In extreme cases, if someone comes to your door, IRS or Police, asking about the transactions and you show them the invoices / credit card statements and tell them you sold them locally for cash. Still trouble?

P.S., I am just curious about what would happen. I don't have an extreme lifestyle like flying everywhere, staying at hotels. I also think $5000 + $2500 annual fee is steep and I wouldn't pay that by making $60k/yr. But too much brainstorming brought up these questions.

Thank you for replies.
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Old Aug 15, 10, 5:06 pm
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Originally Posted by boncovi View Post
DELETION MINE......................
I work in a retail business, electronics field, making $60k/yr.......................


I checked my Amex spending ability and it's good up to $30k a month.

Thank you for replies.
So American Express is giving you a spend ability that is 50% of your ANNUAL gross income before you buy discretionary items such as rent/mortgage, Food, Insurance and income taxes?

If you stated $60K income on your application or even only fudged a little bit, I am surprised that you have not had your account shut own.

A personal green card is issued for personal expense.

BTW, You are not a "green member"-- I'd beg to differ and say that you are a customer of a for profit business. AMEX, is not an exclusive club with a membership review committee
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Old Aug 15, 10, 5:10 pm
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If you buy things for someone else and they pay you for them you are acting as a reseller. You'd quite likely draw the ire of not only the IRS but also your local sales tax folks if you don't file all the appropriate paperwork and follow the regs on that. Even if you don't actually make money reselling the stuff you still are required by law to file the details.

Do you really want to pay nearly 5% of your gross salary for a credit card annual fee? Seems pretty ridiculous to me.
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Old Aug 15, 10, 5:28 pm
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Originally Posted by writetorich View Post
So American Express is giving you a spend ability that is 50% of your ANNUAL gross income before you buy discretionary items such as rent/mortgage, Food, Insurance and income taxes?

If you stated $60K income on your application or even only fudged a little bit, I am surprised that you have not had your account shut own.

A personal green card is issued for personal expense.

BTW, You are not a "green member"-- I'd beg to differ and say that you are a customer of a for profit business. AMEX, is not an exclusive club with a membership review committee

This green card is my first Amex and I got it on Feb. 2010. I checked "pre-qualified" offers and there were two. Green and Gold charge cards. I didn't want to risk it and applied for Green. Got approved.

I also one more credit card from BofA with $500 (fivehundreddollars) limit. That's it.

I stated $60K salary income on the application and nothing else.


First month, happened to be car's service period. I charged $2,200. With the expenses it came up to $3,800 that month

Second month, $4,750
Third month $7,650
Fourth: 15,900
Fifth: 19,300
This month (not cut yet): 9,400

As I said, most of these expenses were for girlfriend, girlfriend's mom's plane tickets, friends' tuition, other friends' purchases etc.

These numbers are statement balances. which means, no charge was declined. First month, it allowed me to charge $3,800. It also allowed me to charge $18,000 without any payment until the due date.

I guess I don't need to say that I always paid on time.

Regarding being a green member, I called Amex last month and asked about upgrading to gold or possibly platinum. I was told that I'm not eligible for an upgrade because I had to complete 12 months with them, then an upgrade link would automatically show up on my online account on 13th. month.


So, this is the story about the numbers.

Anyone has an idea about spending larger / depositing larger amounts, I would love to hear.
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Old Aug 15, 10, 5:34 pm
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Originally Posted by sbm12 View Post
If you buy things for someone else and they pay you for them you are acting as a reseller. You'd quite likely draw the ire of not only the IRS but also your local sales tax folks if you don't file all the appropriate paperwork and follow the regs on that. Even if you don't actually make money reselling the stuff you still are required by law to file the details.

Do you really want to pay nearly 5% of your gross salary for a credit card annual fee? Seems pretty ridiculous to me.
Thank you for your reply.

I just wanted to hear the legal side of a crazy idea. I have been charging some expenses for friends etc. as I said before. It's good to know what would happen if I go crazy.

As I said, I don't have an extreme lifestyle, I don't fly or stay at hotels a lot, so I won't pay $7,500 to get the Centurion even if they offer it to me today.

I was discussing about it with a friend yesterday and wanted to ask what would happen, because I always see stuff like "how to get centurion" and they say "spend, spend, spend like there's no tomorrow", Charge everything on the card. I wondered if anyone had issues with spending "so much" personally while they don't make that much money. That's it.
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Old Aug 15, 10, 5:47 pm
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Originally Posted by boncovi View Post
I just wanted to hear the legal side of a crazy idea.
It's called credit card factoring, and (depending on your state) it can be a felony.
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Old Aug 15, 10, 5:55 pm
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Originally Posted by NickW View Post
It's called credit card factoring, and (depending on your state) it can be a felony.
Incorrect. This isn't credit card factoring, and it's certainly not a felony.
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Old Aug 15, 10, 5:56 pm
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Originally Posted by NickW View Post
It's called credit card factoring, and (depending on your state) it can be a felony.
I don't think it's what I'm talking about.

What is credit card factoring?

Credit card factoring is one way to get funding to businesses that are suffering from cash flow problems. I don't have to tell you how difficult it is to keep up with vendors and other business expenses each month. Whatever the reason, an interruption of cash flow can seriously hurt the company's credit rating and cause even more problems, ultimately causing the decline or failure of their business.

Who uses credit card factoring?

Merchant cash advances aren't cheap. Merchant cash advances aren't always the best choice for everyone. However, they are a legitimate alternative for businesses that have less than perfect credit or that need cash in a hurry. A poor borrowing history limits the places a business can go for loans and the result is either being turned down for the loan or getting a very high interest rate on the approved loan.

Some of the businesses that use credit card factoring the most are bars, restaurants, retail stores and service providers. In each case, the amount of business done with credit cards allows the investment factor to think about profit availability.

Getting an unsecured loan may be the only way a business owner can survive during tough times, but the owner should be careful because there are some less than reputable lenders out there.

A credit card factor will not necessarily look at a business owner's credit history or score as reason to decline the unsecured loan. They look at the history of steady credit card sales more than the business's credit score. And while banks may take several weeks or even months to approve a loan request, a credit card factor can approve a merchant cash advance in a matter of days.

All in all, it is a win-win relationship for both parties involved. Remember; if you do decide to use a credit card factoring company, you need to verify the legitimacy of the lender by as many sources as possible. You might consider checking the Better Business Bureau or asking for references.
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Old Aug 15, 10, 5:57 pm
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Originally Posted by NickW View Post
It's called credit card factoring, and (depending on your state) it can be a felony.
More like Credit Card Laundering. LOL
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Old Aug 15, 10, 6:03 pm
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Originally Posted by boncovi View Post
As I said, I don't have an extreme lifestyle, I don't fly or stay at hotels a lot, so I won't pay $7,500 to get the Centurion even if they offer it to me today.

I was discussing about it with a friend yesterday and wanted to ask what would happen, because I always see stuff like "how to get centurion" and they say "spend, spend, spend like there's no tomorrow", Charge everything on the card. I wondered if anyone had issues with spending "so much" personally while they don't make that much money. That's it.
I guess an attorney or accountant would be the best ones to ask this, however I guarantee you would have a problem with the cash deposits. The bank would almost certainly file a SAR on you and possibly close your account. Checks or ACH would be better, but even still would raise flags with the IRS due to your income.

And since it's hypothetical, I'll say at 60k a year income the cent card is way too expensive, nor is someone the target customer of centurion. Also, when you apply for centurion they will ask your income, would you lie?
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Old Aug 15, 10, 6:09 pm
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Originally Posted by gallardo View Post
And since it's hypothetical, I'll say at 60k a year income the cent card is way too expensive, nor is someone the target customer of centurion. Also, when you apply for centurion they will ask your income, would you lie?
Exactly what I'm thinking.
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Old Aug 15, 10, 6:55 pm
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Isn't this the same as taking thousands of dollars in $1 coins to the bank?
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Old Aug 15, 10, 7:11 pm
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The OP would not owe sales tax. The OP would not be credit card factoring. The OP would have to worry about his bank filing SARS.

But I WOULD REALLY WANT TO KNOW WHY MY FRIEND HAS SO MUCH CASH AND WHERE IT CAME FROM.

The OPs friend could be getting cash from blood diamonds, drugs, arms dealer, or Super Fake Notes (which are fake bills printed by people who hate our country AND CAN NOT BE DETECTED AS FAKE) etc.


I would be more concerned with moral issues than legal and not just accept some story of where my friends money came from and that is was clean money.
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Old Aug 15, 10, 7:13 pm
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I think people are missing the main point here...

There is no more $250,000 spend threshold for Centurion. It is something higher than that, and not necessarily the same for everyone. But in any case, $250,000 no longer cuts it.
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Old Aug 15, 10, 7:21 pm
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Originally Posted by aviators99 View Post
I think people are missing the main point here...

There is no more $250,000 spend threshold for Centurion. It is something higher than that, and not necessarily the same for everyone. But in any case, $250,000 no longer cuts it.
you are right... a little over $100,000 can cut it. i know from personal experience in the last year. the $250,000 figure is a mythical creation by the cardholders who carry it to make themselves sound like bigger spenders than most of them actually are.
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