Reporting over $10,000 transactions

[Torellian]

What is the name of your state (only U.S. law)? WI

I'm someone who buys gold and silver bullion for a hedge against inflation. I've heard from many sources that transactions over $10,000 are reported to the IRS in Form 8300. I've also heard that multiple payments that can add up to that amount over time are also reported, but I can't find any info. about what period of time that is (a month? A year?). I've read 2 lengthy articles online on the subject and they contradict each other about what types of payments are reported. One says it only involves paper cash, and the other says "cash instruments" such as checks and money orders are included.

I emailed the bullion company I was going to do business with to ask them, and they said they don't report anything at all because it's my bank who would do the reporting, since I would be writing a check and that the bank would be the one responsible for it. That's the first time I heard that.

Structuring my purchases to stay below the $10,000 point is something that would seem reasonable, but I've heard that people can, and have been arrested for doing so. But how could they prove I was doing so? What if I made one purchase of $9,000 and then another one of that amount 2 weeks later? Is that considered "structuring" simply because it looks like I split an $18,000 order in half to avoid being reported?

I'm asking these things so I don't get arrested for spending my own money as I see fit, as strange as that sounds. Not wanting to be paranoid, I'd like to know from a legal standpoint how I can avoid being reported, and how frequent my purchases can be below $10,000 before it's considered "structuring purchases to avoid reporting".

In the past, I've heard this whole reporting thing only involved cash deposits to a bank, but now it appears to include coin dealers and other businesses when a customer makes a purchase. Supposedly, this whole reporting thing was an attempt to prevent money laundering and drug activities.

Here's the form: http://www.irs.gov/pub/irs-pdf/f8300.pdf

 

[tranquility]

I'd like to know from a legal standpoint how I can avoid being reported, and how frequent my purchases can be below $10,000 before it's considered "structuring purchases to avoid reporting".

So, you want to know how to structure your purchases so you avoid reporting without it being considered structuring purchases to avoid reporting, right? Can you see the problem there and why there is not an exact definition?

 

[Zigner]

If the purchases are on the up-and-up, then there is no problem with reporting, right?

 

[justalayman]

cash is cash except when it isn't credit. Then it's cash.

• The meaning of the word “currency”
for purposes of 31 U.S.C. 5331 is the
same as for the word “cash” (See Cash
under Definitions, later).

Cash. The term “cash” means the
following.
• U.S. and foreign coin and currency
received in any transaction; or
• A cashier’s check, money order, bank
draft, or traveler’s check having a face
amount of $10,000 or less that is
received in a designated reporting
transaction (defined below), or that is
received in any transaction in which the
recipient knows that the instrument is
being used in an attempt to avoid the
reporting of the transaction under either
section 6050I or 31 U.S.C. 5331.
Note. Cash does not include a check
drawn on the payer’s own account, such
as a personal check, regardless of the
amount.

as long as you use a check drawn on your own account, it does not have to be reported

 

[Torellian]

So, you want to know how to structure your purchases so you avoid reporting without it being considered structuring purchases to avoid reporting, right? Can you see the problem there and why there is not an exact definition?

Please don't just assume I'm trying to do something wrong. What I'm trying to do is something right, but might look like something wrong in the eyes of the law. I'd just like to get it straight about what they look for when deciding what to report.

I recently placed an order for $9100 for silver bullion. 2 days later, the price dropped sharply, and now I'm considering a second order to average out the difference. It wouldn't be an order over $10,000 by itself, but if added to the total of the previous order, it would be. I'd like to know if 2 orders so close together would raise suspicion. I figured someone here who specializes in tax law would know.

 

[Torellian]

If the purchases are on the up-and-up, then there is no problem with reporting, right?

Supposedly! But just because it's on the up-and-up doesn't mean it looks like it is and wouldn't cause problems anyway. I'd like to know how closely they look at those things.

 

[OHRoadwarrior]

The bank reports the transactions, so what. Unless the money is being funneled into the account from illegal sources, you have nothing to worry about as it is going out for legal purchases. Is this money you legally earned and paid taxes on or are you laundering money? Are you running a buy/sell speculation business and not paying taxes on it?

 

[justalayman]

Supposedly! But just because it's on the up-and-up doesn't mean it looks like it is and wouldn't cause problems anyway. I'd like to know how closely they look at those things.

the reporter simply files the form as required. It is the government that reviews them. If you regularly make purchases to fly just under the radar, it will likely draw attention.

so, simple answer: use a check from your account and they do not fill out the form. What form of payment are you currently using?

this isn't about tax law. It is a criminal law issue. As you stated previously, the intent is to catch money laundering schemes.

 

[Torellian]

The bank reports the transactions, so what. Unless the money is being funneled into the account from illegal sources, you have nothing to worry about as it is going out for legal purchases. Is this money you legally earned and paid taxes on or are you laundering money? Are you running a buy/sell speculation business and not paying taxes on it?

The legal system doesn't know an illegal dollar from a legal one or what the purpose is on the surface. Just as when someone deposits $10,000 in cash to their bank account, the system doesn't know if it came from a legitimate cash business or the drug trade. That's the original intent of this law--to find out who's dealing drugs, since they are assumed to be the ones most likely to be making those kinds of deposits. But legit people doing legit business sometimes get caught up in the legal dragnet, and I'm just not wanting to be one of them.

So, could someone tell me if multiple purchases under $10,000 over a given time period qualifies in the eyes of the law as structuring? What time period would multiple transactions have to take place in order to raise a red flag? Would it be within a week, month, year??? I'd just like to know.

 

[tranquility]

Please don't just assume I'm trying to do something wrong. What I'm trying to do is something right, but might look like something wrong in the eyes of the law. I'd just like to get it straight about what they look for when deciding what to report.

I recently placed an order for $9100 for silver bullion. 2 days later, the price dropped sharply, and now I'm considering a second order to average out the difference. It wouldn't be an order over $10,000 by itself, but if added to the total of the previous order, it would be. I'd like to know if 2 orders so close together would raise suspicion. I figured someone here who specializes in tax law would know.

Assume? Heck, you are making a specific plan to do so. The law is not written in such detail so that one can safely circumvent it just by knowing the rules of "what they look for". Just like in audits in general, the discriminatory function is pretty much secret. Of course with criminal law, it's right out there. Are you trying to circumvent the reporting? That's what prosecutorial discretion is all about--and why so much of our law is problematic. Here, the key is substance over form. If you had true reasons (like the dropping of the price), I don't see how you would lose the argument. But, there is not a hard and fast rule. One court spoke of how the government feels:

It cites several 11th and former 5th Circuit cases including U.S. v. Thompson, 603 F.2d 1200 (5th Cir.1979) and U.S. v. Tobon-Builes, 706 F.2d 1092 (11th Cir.1983), for the proposition that a reviewing court must apply a " 'substance over form analysis' ", when "dealing with schemes to circumvent financial institution reporting requirements." Appellee then discusses a number of cases in which transactions similar to the one at hand were developed to avoid the reporting requirements. In each case cited, the reviewing court commented that to allow the scheme would frustrate the congressional intent in the passage of the Currency and Foreign Transaction Reporting Act " 'to give law enforcement officials an important tool in fighting crime.' " Indeed, in U.S. v. Thompson, 603 F.2d 1200 (5th Cir.1979), the Fifth Circuit held that a decision to structure a large transaction into a group of smaller ones "with the intent to annul the reporting requirements does not equate to a decision to structure a financial transaction in a lawful manner so as to minimize or avoid the applicability of a tax covering only specific activity." Id. at 1204. The Government claims that each time a new variation of the same scheme to circumvent the Act's reporting requirement has been developed "the courts have pierced the myth of ... these 'legal' transactions and held, in each instance, that the act violates the law." This case should be no exception. According to the Government, the only reason Denemark purchased the 14 cashier's checks was to avoid the reporting requirement. These transactions should thus be considered together and the trial court finding of a violation of the law should be upheld.

And that, was before the law was changed to reflect the decisions in 1984.

However, the Supremes determined it in more detail. To understand what is required, see:
Ratzlaf v. United States (92-1196), 510 U.S. 135 (1994).

 

[LdiJ]

The legal system doesn't know an illegal dollar from a legal one or what the purpose is on the surface. Just as when someone deposits $10,000 in cash to their bank account, the system doesn't know if it came from a legitimate cash business or the drug trade. That's the original intent of this law--to find out who's dealing drugs, since they are assumed to be the ones most likely to be making those kinds of deposits. But legit people doing legit business sometimes get caught up in the legal dragnet, and I'm just not wanting to be one of them.

So, could someone tell me if multiple purchases under $10,000 over a given time period qualifies in the eyes of the law as structuring? What time period would multiple transactions have to take place in order to raise a red flag? Would it be within a week, month, year??? I'd just like to know.

What kind of legal dragnet are you worried about? What do you think is going to happen to you if you have transactions of 10k plus? As long as the source of your funds is clear and you properly report all transactions on your tax return then why are you even concerned about this?

 

[Torellian]

Assume? Heck, you are making a specific plan to do so. .

So now you know my plans? Are you a mindreader? What I had said is that 2 of my purchases would be under $10,000 but that 2 of them so close together and equaling OVER that amount might draw attention and make it look like I was doing something illegal even though I'm not. Even looking like you're doing something illegal can cause problems. Understand? And do you understand how problems are something best avoided?

What I'm asking is HOW OFTEN do purchases under $10,000 have to be made that would cause suspicion. If you don't know, just admit it--rather than start making assumptions and accusations against me.

 

[Torellian]

What kind of legal dragnet are you worried about? What do you think is going to happen to you if you have transactions of 10k plus?

I'm more concerned with being suspected of doing something I'm not. Namely, this is example showing that all you have to do is be SUSPECTED, even though they have no proof: http://azstarnet.com/news/local/crime/tucson-border-patrol-agent-arrested/article_82f6ec34-9668-11e2-b271-0019bb2963f4.html


Here are a host of more examples for you to read: http://www.google.com/#hl=en&sclient=psy-ab&q=arrested+for+structuring+transactions&oq=arrested+for+structuring+transa&gs_l=hp.1.0.33i21.1000.9750.0.12312.35.22.1.11.11.2.469.2766.13j7j1j0j1.22.0...1.0...1c.1.8.psy-ab.NTdhpqaJZgg&pbx=1&bav=on.2,or.r_qf.&bvm=bv.44990110,d.b2I&fp=5d9bd000382de410&biw=1024&bih=641&safe=active

 

[Zigner]

If you don't "structure" your transactions, this won't be a problem. If the transactions are legitimate, then there is nothing to worry about.

 

[justalayman]

So now you know my plans? Are you a mindreader? What I had said is that 2 of my purchases would be under $10,000 but that 2 of them so close together and equaling OVER that amount might draw attention and make it look like I was doing something illegal even though I'm not. Even looking like you're doing something illegal can cause problems. Understand? And do you understand how problems are something best avoided?

If you don't know, just admit it--rather than start making assumptions and accusations against me.

You were given a means to avoid the issue. If you refuse to use it, then you choose to risk your transactions being suspect and reviewed.

What I'm asking is HOW OFTEN do purchases under $10,000 have to be made that would cause suspicion.

there is no definite answer. It is whatever the person reviewing your transactions or the department they work for decides it is.