For the persons who belong to an average family making deposits in their saving account is a pretty good idea as it will help the individual in handling his money appropriately so that they can plan a good future. It will help them in maintaining their money and saving it for future use.
There are millions of people who make their deposits in saving account and maintain their saving for paying bills, making a home down payments, saving money for after retirement and much more. It can either sound sad or may be due to security reasons that both IRS and law enforcement found that the people who deposit a large amount of money in their savings account might be involved in some illegal activities like as of illegal drug activity money laundering, tax evasion or can either be involved with terrorism.
Bank Secrecy Act and The Patriot Act
To know more about this we need to learn about the bank secrecy act which is also called as the Currency and Foreign Transactions Reporting Act which was passed in 1970 during the government period of Congress. It is designed to focus on the citizens who are trying to evade taxed or involved in illegal activities like money laundering. When in 2002 after the attack of terrorist on 9/11, the Patriot Act passed, this bank secrecy act gots a new strength due to the Title III of The patriot act.
What is Title III
International Money Laundering Abatement and Financial Anti-Terrorism Act of 2001, part of the Patriot Act, requires banks and credits unions to report certain deposits to the IRS within 15 days by filling out a Form 8300. A copy of this form is sent to the Financial Crimes Enforcement Network (FinCEN).
Which Deposits are Reported?
It is necessary for credit unions and banks to report any cash deposit which is equal to or more than 10 thousand dollars. Along with it is in the duration of one year two transactions equal or exceeds the limit of 10 thousand dollars then it will be reported. Apart from this if various small transactions of equal or more than 10 thousand dollars have been accounted within 24 hours duration then they will also be reported to the IRS.
It does not end here, if any credit union or bank founds suspicious activity of any person or account in which regular deposits are being made then they have full right to report their suspicion. As per the IRS, cash deposits include all kind of currency including notes and coins which are legal in the United States tender as well as for other countries also. The deposit of personal cheque does not lie within the Bank secrecy act as these cheques are already traced from with those account from which they have been writing.
IRS Form 8300
This is the form which is filled by credit unions or banks while reporting any account, now we are going to know which kind of information they can share.
Any bank or credit union who is going to fill this Form 8300 has to mention their personal details along with their business information which includes name, identification of taxpayer, an identity of the depositor. If these deposits are made in any joint account then there can be various depositors and the banking institutions have to provide details of each and every depositor.
The amount which triggers the Form 8300 should be listed in it along with the information of way of deposition like by bank drafts, cashier or traveller cheque or the combination of both. After it, this fork is sent to the IRS by bank union or credit union for the purpose of review. If in any case the credit union or banks failed in filing the IRS form 8300 on time then they will be charged with a penalty by IRS for not submitting the form within a deadline.
Generally, average people do not receive the threshold amount of 100000 dollars by bank drafts or money orders except those who are running any kind of small business. If you found that you are going to receive amount bigger than the threshold limit then it will be beneficial to contact your branch about your concern so that you can find a way within the Patriot Act or Bank secrecy act.