Suspicious Activity Reports to the IRS when buying or depositing money orders.
May 27, 2016, 8:12 pm
#1231
Join Date: Apr 2011
Posts: 2,055
Legally, it is a check.
UCC § 3-104 (f) states that
UCC § 3-104 (f) states that
"Check" means (i) a draft, other than a documentary draft, payable on demand and drawn on a bank or (ii) a cashier's check or teller's check. An instrument may be a check even though it is described on its face by another term, such as "money order."
Per IRS Pub 519 Ch. 7:
FinCEN Form 105
FinCEN Form 105 must be filed by each person who physically transports, mails, or ships, or causes to be physically transported, mailed, or shipped, currency or other monetary instruments in a total amount of more than $10,000 at one time from the United States to any place outside the United States, or into the United States from any place outside the United States. The filing requirement also applies to each person who receives in the United States currency or monetary instruments totaling more than $10,000 at one time from any place outside of the United States.
The term “monetary instruments” means the following:
Coin and currency of the United States or of any other country,
Travelers' checks in any form,
Investment securities or stock in bearer form or otherwise in such form that title to them passes upon delivery,
Negotiable instruments (including checks, promissory notes, and money orders) in bearer form, endorsed without restriction, made out to a fictitious payee, or otherwise in such form that title to them passes upon delivery, and
Checks, promissory notes, and money orders which are signed but on which the name of the payee has been omitted.
However, the term does not include:
Checks or money orders made payable to the order of a named person which have not been endorsed or which contain restrictive endorsements,
Warehouse receipts, or
Bills of lading.
A transfer of funds through normal banking procedures (wire transfer) that does not involve the physical transportation of currency or monetary instruments is not required to be reported on FinCEN Form 105.
FinCEN Form 105 must be filed by each person who physically transports, mails, or ships, or causes to be physically transported, mailed, or shipped, currency or other monetary instruments in a total amount of more than $10,000 at one time from the United States to any place outside the United States, or into the United States from any place outside the United States. The filing requirement also applies to each person who receives in the United States currency or monetary instruments totaling more than $10,000 at one time from any place outside of the United States.
The term “monetary instruments” means the following:
Coin and currency of the United States or of any other country,
Travelers' checks in any form,
Investment securities or stock in bearer form or otherwise in such form that title to them passes upon delivery,
Negotiable instruments (including checks, promissory notes, and money orders) in bearer form, endorsed without restriction, made out to a fictitious payee, or otherwise in such form that title to them passes upon delivery, and
Checks, promissory notes, and money orders which are signed but on which the name of the payee has been omitted.
However, the term does not include:
Checks or money orders made payable to the order of a named person which have not been endorsed or which contain restrictive endorsements,
Warehouse receipts, or
Bills of lading.
A transfer of funds through normal banking procedures (wire transfer) that does not involve the physical transportation of currency or monetary instruments is not required to be reported on FinCEN Form 105.
May 27, 2016, 8:28 pm
#1232
Join Date: Nov 2015
Posts: 84
The Uniform Commercial Code is only a set of guidelines, although many states have adopted it. And it does not say that money orders are checks, it says that if something meets the definition of a check it is considered a check even if it is called a money order on its face.
Per IRS Pub 519 Ch. 7:
As with the CBP guidelines, it hinges on whether or not it is a bearer instrument. If it is, then it can change hands freely as cash. If it is made out to a specific individual or business, then it is a check.
Per IRS Pub 519 Ch. 7:
As with the CBP guidelines, it hinges on whether or not it is a bearer instrument. If it is, then it can change hands freely as cash. If it is made out to a specific individual or business, then it is a check.
Same thing with the promissory note you signed when you bought your house, or if you endorse a check.
May 30, 2016, 3:40 pm
#1233
Join Date: Feb 2016
Posts: 829
I buy 2 VGCs at WM and if I need more I go back and get 2 more so I don't hold people up as each transaction needs to be rung separately. Sometimes on the same day, I may buy VGCs from 2 different walmart. Never exceeding $3K in combine purchases per day. I then may load up to $2-3K on my prepaid cards or Billpay. I have stopped purchasing MOs for the most part.
Could any of the above activity considered as structuring? I have noticed something fishy lately, WM employees are recording, monitoring transactions. I don't know if they can see all the activity in one place and start filing SAR.
Could any of the above activity considered as structuring? I have noticed something fishy lately, WM employees are recording, monitoring transactions. I don't know if they can see all the activity in one place and start filing SAR.
May 30, 2016, 5:47 pm
#1235
Join Date: Mar 2011
Location: SAN
Programs: Delta Gold. Hilton Diamond. Hyatt Explorist.
Posts: 1,677
I buy 2 VGCs at WM and if I need more I go back and get 2 more so I don't hold people up as each transaction needs to be rung separately. Sometimes on the same day, I may buy VGCs from 2 different walmart. Never exceeding $3K in combine purchases per day. I then may load up to $2-3K on my prepaid cards or Billpay. I have stopped purchasing MOs for the most part.
Could any of the above activity considered as structuring? I have noticed something fishy lately, WM employees are recording, monitoring transactions. I don't know if they can see all the activity in one place and start filing SAR.
Could any of the above activity considered as structuring? I have noticed something fishy lately, WM employees are recording, monitoring transactions. I don't know if they can see all the activity in one place and start filing SAR.
May 30, 2016, 7:37 pm
#1236
Join Date: Feb 2016
Posts: 829
My daily and monthly volume is nothing ($2k daily average and $20K monthly), compare to what I have read people do. Obviously, no one is buying let's say 10 VGCs from one WM at a time, You have to follow this route i.e. buy few at a time, rinse and repeat and try different walmarts. correct? There is no way around it because of the volume.
May 30, 2016, 9:23 pm
#1237
Join Date: Mar 2011
Location: SAN
Programs: Delta Gold. Hilton Diamond. Hyatt Explorist.
Posts: 1,677
My daily and monthly volume is nothing ($2k daily average and $20K monthly), compare to what I have read people do. Obviously, no one is buying let's say 10 VGCs from one WM at a time, You have to follow this route i.e. buy few at a time, rinse and repeat and try different walmarts. correct? There is no way around it because of the volume.
May 30, 2016, 9:30 pm
#1238
Suspended
Join Date: Apr 2016
Posts: 335
My daily and monthly volume is nothing ($2k daily average and $20K monthly), compare to what I have read people do. Obviously, no one is buying let's say 10 VGCs from one WM at a time, You have to follow this route i.e. buy few at a time, rinse and repeat and try different walmarts. correct? There is no way around it because of the volume.
Not out of question.Been there done that.
May 31, 2016, 7:11 am
#1239
Join Date: Mar 2015
Location: Cincinnati
Programs: AA, Hyatt
Posts: 371
FinCEN Form 105 must be filed by each person who physically transports, mails, or ships, or causes to be physically transported, mailed, or shipped, currency or other monetary instruments in a total amount of more than $10,000 at one time from the United States to any place outside the United States, or into the United States from any place outside the United States. The filing requirement also applies to each person who receives in the United States currency or monetary instruments totaling more than $10,000 at one time from any place outside of the United States.
May 31, 2016, 8:42 am
#1240
Join Date: Apr 2011
Posts: 2,055
CTRs and structuring
tl:dr - This is not legal advice, I don't represent you, but Congress appears to have made the rules applicable to cash and currency. In addition, they allowed the Secretary of the Treasury to include domestic bearer instruments and foreign non-bearer instruments but the Secretary seems to have declined to add these to the regulations. So for FinCen, only cash and currency should matter for Currency Transaction Reports (CTRs). For Suspicious Activity Reports (SARs) and reports to the IRS, I suspect any 'monetary instruments' count.
OK, here are the exact regs . . .
REPORTING
The law as enacted by Congress:
31 U.S. Code § 5313 - Reports on domestic coins and currency transactions
(a) When a domestic financial institution is involved in a transaction for the payment, receipt, or transfer of United States coins or currency (or other monetary instruments the Secretary of the Treasury prescribes), in an amount, denomination, or amount and denomination, or under circumstances the Secretary prescribes by regulation, the institution and any other participant in the transaction the Secretary may prescribe shall file a report on the transaction at the time and in the way the Secretary prescribes. A participant acting for another person shall make the report as the agent or bailee of the person and identify the person for whom the transaction is being made.
See https://www.law.cornell.edu/uscode/text/31/5313
The implementing rules promulgated by the Department of the Treasury:
31 CFR § 1010.311 Filing obligations for reports of transactions in currency.
Each financial institution other than a casino shall file a report of each deposit, withdrawal, exchange of currency or other payment or transfer, by, through, or to such financial institution which involves a transaction in currency of more than $10,000, except as otherwise provided in this section. <Snip Postal exemption.>
See https://www.law.cornell.edu/cfr/text/31/1010.311
STRUCTURING
The law as enacted by Congress:
31 U.S. Code § 5324 - Structuring transactions to evade reporting requirement prohibited
(a)Domestic Coin and Currency Transactions Involving Financial Institutions.—No person shall, for the purpose of evading the reporting requirements of section 5313(a) or 5325 or any regulation prescribed under any such section, the reporting or recordkeeping requirements imposed by any order issued under section 5326, or the recordkeeping requirements imposed by any regulation prescribed under section 21 of the Federal Deposit Insurance Act or section 123 of Public Law 91–508—
(1) cause or attempt to cause a domestic financial institution to fail to file a report required under section 5313(a) or 5325 or any regulation prescribed under any such section, to file a report or to maintain a record required by an order issued under section 5326, or to maintain a record required pursuant to any regulation prescribed under section 21 of the Federal Deposit Insurance Act or section 123 of Public Law 91–508;
See https://www.law.cornell.edu/uscode/text/31/5324
The implementing rules promulgated by the Department of the Treasury:
31 CFR § 1010.314 Structured transactions.
No person shall for the purpose of evading the transactions in currency reporting requirements of this chapter with respect to such transaction:
(a) Cause or attempt to cause a domestic financial institution to fail to file a report required under the transactions in currency reporting requirements of this chapter;
(b) Cause or attempt to cause a domestic financial institution to file a report required under the transactions in currency reporting requirements of this chapter that contains a material omission or misstatement of fact; or
(c) Structure (as that term is defined in § 1010.100(xx)) or assist in structuring, or attempt to structure or assist in structuring, any transaction with one or more domestic financial institutions.
See https://www.law.cornell.edu/cfr/text/31/1010.314
MONETARY INSTRUMENT
As defined by Congress:
Definitions: 31 U.S. Code § 5312(a)
(3) “monetary instruments” means—
(A) United States coins and currency;
(B) as the Secretary may prescribe by regulation, coins and currency of a foreign country, travelers’ checks, bearer negotiable instruments, bearer investment securities, bearer securities, stock on which title is passed on delivery, and similar material; and
(C) as the Secretary of the Treasury shall provide by regulation for purposes of sections 5316 and 5331, checks, drafts, notes, money orders, and other similar instruments which are drawn on or by a foreign financial institution and are not in bearer form.
See https://www.law.cornell.edu/uscode/text/31/5312#a_3
CONCLUSION
The following is my interpretation of the laws and regulations but should not be considered legal advice as I do not represent you.
The laws enacted by Congress need to be 'enabled' by regulations promulgated by the corresponding executive department, in this case the Department of the Treasury. Congress's laws appear in the United States Code (USC) and department regulations show up in the Code of Federal Regulations (CFR).
The laws in this case allow the Secretary of the Treasury to include not just cash and currency but also domestic bearer instruments (anything that is payable to whomever holds it rather than to a specified payee) and foreign non-bearer instruments. However, it appears that the Secretary of the Treasury did not include anything other than cash and currency in the regulations (although they are a little unclear as a comma appears to be missing).
This is only applicable to FinCen Currency Transaction Reports (CTRs) for domestic bank transactions. Foreign bank transactions and transporting money when entering or leaving the country includes not just coin and currency but monetary instruments as well.
Suspicious Activity Reports (SARs) can, AFAIK, be reported on both cash/currency and monetary instruments, as any suspicious transaction can be reported. Likewise, I am not sure about reports to the IRS. Those are more about unreported income than the transfer of the money itself.
OK, here are the exact regs . . .
REPORTING
The law as enacted by Congress:
31 U.S. Code § 5313 - Reports on domestic coins and currency transactions
(a) When a domestic financial institution is involved in a transaction for the payment, receipt, or transfer of United States coins or currency (or other monetary instruments the Secretary of the Treasury prescribes), in an amount, denomination, or amount and denomination, or under circumstances the Secretary prescribes by regulation, the institution and any other participant in the transaction the Secretary may prescribe shall file a report on the transaction at the time and in the way the Secretary prescribes. A participant acting for another person shall make the report as the agent or bailee of the person and identify the person for whom the transaction is being made.
See https://www.law.cornell.edu/uscode/text/31/5313
The implementing rules promulgated by the Department of the Treasury:
31 CFR § 1010.311 Filing obligations for reports of transactions in currency.
Each financial institution other than a casino shall file a report of each deposit, withdrawal, exchange of currency or other payment or transfer, by, through, or to such financial institution which involves a transaction in currency of more than $10,000, except as otherwise provided in this section. <Snip Postal exemption.>
See https://www.law.cornell.edu/cfr/text/31/1010.311
STRUCTURING
The law as enacted by Congress:
31 U.S. Code § 5324 - Structuring transactions to evade reporting requirement prohibited
(a)Domestic Coin and Currency Transactions Involving Financial Institutions.—No person shall, for the purpose of evading the reporting requirements of section 5313(a) or 5325 or any regulation prescribed under any such section, the reporting or recordkeeping requirements imposed by any order issued under section 5326, or the recordkeeping requirements imposed by any regulation prescribed under section 21 of the Federal Deposit Insurance Act or section 123 of Public Law 91–508—
(1) cause or attempt to cause a domestic financial institution to fail to file a report required under section 5313(a) or 5325 or any regulation prescribed under any such section, to file a report or to maintain a record required by an order issued under section 5326, or to maintain a record required pursuant to any regulation prescribed under section 21 of the Federal Deposit Insurance Act or section 123 of Public Law 91–508;
See https://www.law.cornell.edu/uscode/text/31/5324
The implementing rules promulgated by the Department of the Treasury:
31 CFR § 1010.314 Structured transactions.
No person shall for the purpose of evading the transactions in currency reporting requirements of this chapter with respect to such transaction:
(a) Cause or attempt to cause a domestic financial institution to fail to file a report required under the transactions in currency reporting requirements of this chapter;
(b) Cause or attempt to cause a domestic financial institution to file a report required under the transactions in currency reporting requirements of this chapter that contains a material omission or misstatement of fact; or
(c) Structure (as that term is defined in § 1010.100(xx)) or assist in structuring, or attempt to structure or assist in structuring, any transaction with one or more domestic financial institutions.
See https://www.law.cornell.edu/cfr/text/31/1010.314
MONETARY INSTRUMENT
As defined by Congress:
Definitions: 31 U.S. Code § 5312(a)
(3) “monetary instruments” means—
(A) United States coins and currency;
(B) as the Secretary may prescribe by regulation, coins and currency of a foreign country, travelers’ checks, bearer negotiable instruments, bearer investment securities, bearer securities, stock on which title is passed on delivery, and similar material; and
(C) as the Secretary of the Treasury shall provide by regulation for purposes of sections 5316 and 5331, checks, drafts, notes, money orders, and other similar instruments which are drawn on or by a foreign financial institution and are not in bearer form.
See https://www.law.cornell.edu/uscode/text/31/5312#a_3
CONCLUSION
The following is my interpretation of the laws and regulations but should not be considered legal advice as I do not represent you.
The laws enacted by Congress need to be 'enabled' by regulations promulgated by the corresponding executive department, in this case the Department of the Treasury. Congress's laws appear in the United States Code (USC) and department regulations show up in the Code of Federal Regulations (CFR).
The laws in this case allow the Secretary of the Treasury to include not just cash and currency but also domestic bearer instruments (anything that is payable to whomever holds it rather than to a specified payee) and foreign non-bearer instruments. However, it appears that the Secretary of the Treasury did not include anything other than cash and currency in the regulations (although they are a little unclear as a comma appears to be missing).
This is only applicable to FinCen Currency Transaction Reports (CTRs) for domestic bank transactions. Foreign bank transactions and transporting money when entering or leaving the country includes not just coin and currency but monetary instruments as well.
Suspicious Activity Reports (SARs) can, AFAIK, be reported on both cash/currency and monetary instruments, as any suspicious transaction can be reported. Likewise, I am not sure about reports to the IRS. Those are more about unreported income than the transfer of the money itself.
May 31, 2016, 9:46 am
#1241
Join Date: Mar 2015
Location: Cincinnati
Programs: AA, Hyatt
Posts: 371
This is only applicable to FinCen Currency Transaction Reports (CTRs) for domestic bank transactions. Foreign bank transactions and transporting money when entering or leaving the country includes not just coin and currency but monetary instruments as well.
Suspicious Activity Reports (SARs) can, AFAIK, be reported on both cash/currency and monetary instruments, as any suspicious transaction can be reported. Likewise, I am not sure about reports to the IRS. Those are more about unreported income than the transfer of the money itself.
Suspicious Activity Reports (SARs) can, AFAIK, be reported on both cash/currency and monetary instruments, as any suspicious transaction can be reported. Likewise, I am not sure about reports to the IRS. Those are more about unreported income than the transfer of the money itself.
Results are exactly what we have been saying the whole time.
SARs can be filed for anything, CTR for cash and coin only. Both are filed to FINCEN only.
I don't think I will be getting any SARs any time soon as all the CSRs at my local wal mart know exactly what I am doing, and I have spoken to the Financial Crimes division of my bank (where I work) regarding my activities. Guy on the other end wanted to know how to get started doing it for himself.
May 31, 2016, 4:50 pm
#1243
Join Date: Jul 2014
Posts: 3,688
NO, you can't pay for MOs with CCs. You buy VGCs first and you use them to pay for the MOs PROVIDED the store will accept debit GCs as tender for MOs.
May 31, 2016, 7:07 pm
#1244
Original Member
Join Date: May 1998
Posts: 1,139
Thanks IkeEsq. Very useful information.
This is a lawyer & travel blogger who I thought did an excellent job in a multi-part post of discussing structuring and asset forfeiture as it relates to manufactured spending.
http://travelblawg.boardingarea.com/...federal-crime/
He discusses what has always tripped me up in understanding this stuff, which is whether a debit card transaction is looked at as a cash withdrawal & cash expenditure, or is instead akin to a credit card transaction. It appears it is looked at as a credit card transaction based on most of the evidence out there. He uses the IRS guidance for auto dealers and points out that a person can pay his or her federal income tax with a debit card for amounts in excess of $10,000 and the IRS makes no mention of it being a cash transaction.
That might all sound quite simple to you, and it makes sense as a result of the money already "being in the banking system", but most of us who do or did MS for a long time recognize that most WalMart branches very directly treated debit card transactions as cash. The screen popped up for transactions of $3,000 and demanded the very information required for entry in a Daily Monetary Log. Since Structuring also includes arranging transactions to avoid the bank making entries in a Daily Monetary Log, and it is logical that multiple entries in a Daily Monetary Log would result in a greater likelihood of SARs (in fact I think the SAR guidance tells a financial organization to use its Daily Monetary Log in evaluating whether to file SARs), some of the concerns regarding structuring has occurred based on how WalMart programmed its computers.
I guess it is kind of an interesting legal question. If WalMart was going overboard in recording transactions between $3,000 and $9,999, and someone arranged transactions to avoid them making such entries in the Daily Monetary Log (when they were not in fact required to do so), could that be structuring? I would guess not.
This is a lawyer & travel blogger who I thought did an excellent job in a multi-part post of discussing structuring and asset forfeiture as it relates to manufactured spending.
http://travelblawg.boardingarea.com/...federal-crime/
He discusses what has always tripped me up in understanding this stuff, which is whether a debit card transaction is looked at as a cash withdrawal & cash expenditure, or is instead akin to a credit card transaction. It appears it is looked at as a credit card transaction based on most of the evidence out there. He uses the IRS guidance for auto dealers and points out that a person can pay his or her federal income tax with a debit card for amounts in excess of $10,000 and the IRS makes no mention of it being a cash transaction.
That might all sound quite simple to you, and it makes sense as a result of the money already "being in the banking system", but most of us who do or did MS for a long time recognize that most WalMart branches very directly treated debit card transactions as cash. The screen popped up for transactions of $3,000 and demanded the very information required for entry in a Daily Monetary Log. Since Structuring also includes arranging transactions to avoid the bank making entries in a Daily Monetary Log, and it is logical that multiple entries in a Daily Monetary Log would result in a greater likelihood of SARs (in fact I think the SAR guidance tells a financial organization to use its Daily Monetary Log in evaluating whether to file SARs), some of the concerns regarding structuring has occurred based on how WalMart programmed its computers.
I guess it is kind of an interesting legal question. If WalMart was going overboard in recording transactions between $3,000 and $9,999, and someone arranged transactions to avoid them making such entries in the Daily Monetary Log (when they were not in fact required to do so), could that be structuring? I would guess not.
Last edited by Andy2; May 31, 2016 at 7:22 pm
May 31, 2016, 8:20 pm
#1245
Join Date: Feb 2016
Posts: 829
There is SAR and then there is confusion about what will constitute filing of SAR. Many people when in doubt will take a safer road and pass up an opportunity to make money. I myself could apply for few more WF cards and run'em for 6 months each. Have to pass up this opportunity because it is just mind boggling when you look at the repercussions.