I am in the process of moving some of my savings to gold but don’t want to trigger the IRS reporting or anything else for that matter. If I withdrawal $3,500 a day or a few times a week, will that cause problems? I have been saving for a while, and so it is definitely out of the ordinary for me to withdraw that kind of money frequently, however, I did tell them what I was doing, and even inquired about safety deposit boxes to store the gold I am buying.
You’re much better off just doing it in one go. What you are considering doing is called structuring, and will, unlike making a large transfer, result in mandatory reporting and a money laundering investigation.
Contrary to popular misunderstanding, [the reporting requirement] does not apply to checks or electronic transactions. Financial institutions suspecting deposit structuring with intent to avoid the law are required to file a suspicious activity report (SAR).
Yes. What OP is asking about is a surprisingly serious crime. You don’t even have to be doing it on purpose to be guilty, but if you are doing it on purpose, you’re ultra fucked.
OP: Don’t
They have to prove you did it on purpose to try to avoid reporting or whatever, so you’re highly unlikely to be found guilty if you just happen to need to move a lot of money over a few days in pieces. If you get a call, just tell the truth and the investigation should be closed pretty quickly.
you’re highly unlikely to be found guilty
This is untrue. People have been found guilty of this even when they had a perfectly legitimate explanation, which OP doesn’t. I don’t know that OP is likely to get investigated simply for a single instance. Maybe. If they are investigated, I do know that it’s a big deal and they’re likely to be found guilty. I also know that OP is far more guaranteed to be completely fine if they just take it all out at once and do the IRS reporting. The IRS gets these reports all the time for all kinds of things. They’re not going to care about a single withdrawal right above the limit.
If you get a call, just tell the truth and the investigation should be closed pretty quickly.
This is some of the absolute worst possible advice I have ever seen on the internet.
Absolutely fucking not. If the feds call you and want to talk with you about a crime they suspect you of, get a lawyer. Any talking they want to do that will be to your benefit can happen after you talk to your lawyer. There are some scenarios, before you become a suspect, where it is useful to be communicative with the cops. Once you’re a suspect, those scenarios are 0.
Without a lawyer’s guidance, you can have a 30-second conversation with them which will torpedo your defense and send you to prison when you would have been able to fight the case and walk away a free man. They are extremely skilled at making it sound harmless and friendly, and like a good idea to talk with them so you can air your side of the story and clear your name. It is not. They are lying. Get a lawyer.
Even if you didn’t do anything illegal (which, again, OP did in this scenario), don’t say a goddamned word. Tell them you’d like to speak with your lawyer first, show them ID, cooperate in general, but don’t say a goddamned word.
Here’s the law on structuring:
(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—
It requires intent to evade reporting requirements. The prosecution needs to prove intent, so if it was completely accidental, you wouldn’t be found guilty unless you have absolutely terrible representation or something. If regulators actually pursue an investigation, you’d give an explanation of your actions and the case would likely be. dropped.
which OP doesn’t
Sure. OP is attempting to evade reporting requirements, so this would be a pretty straightforward case should prosecution choose to pursue it. If this is their first offense, the amount of money is pretty small, and OP can provide a clear paper trail, there’s a pretty good chance they’d be let off w/ a warning.
If the feds call you and want to talk with you about a crime they suspect you of, get a lawyer.
I’m saying this in response to “accidentally triggering” the reporting requirement. The average citizen isn’t aware of the reporting requirements, and if they happen to trigger it because of normal transactions, there’s no crime. If my bank called me asking about suspicious transactions, I’d tell them the truth, which lets them complete their report and the whole thing likely disappears.
If it gets to the point where federal regulators are calling, sure, lawyer up. But by that point, you should be aware that there’s some kind of criminal investigation happening instead of a reporting mishap.
It requires intent to evade reporting requirements. The prosecution needs to prove intent, so if it was completely accidental
Which this wasn’t.
If regulators actually pursue an investigation, you’d give an explanation of your actions and the case would likely be. dropped.
There was a guy who got convicted of structuring because his armored car service or whatever gave him a limit of $10,000, so he would do deposits whenever his amount of cash started to get close to that. Presumably he explained himself in court. Guilty. Nobody decided to drop the case because he had a good explanation. For all I know, he’s now unemployable to this day because of his criminal history.
You have this sort of boy-scout understanding of how federal charges work that is not at all how they work. A lot of things in life work by just giving the honest explanation and people being reasonable. Being prosecuted is not one of those things.
If my bank called me asking about suspicious transactions, I’d tell them the truth, which lets them complete their report and the whole thing likely disappears.
That’s a whole different scenario. For some reason I was thinking you were talking about getting a call from the feds. Your bank calling is a little different.
If you were talking about getting a call from the bank, I would… well, OP basically is laying out that he’s planning to structure his deposits to evade the IRS reporting requirements, so I wouldn’t really advise telling that even to the bank. Again, being upfront about that kind of thing can be a quick recipe for prison. Just don’t do it. And, since you haven’t done it, if your bank calls and asks what you’re doing, you can be upfront about the not-criminal thing you are doing, if the not-criminal thing you are doing has somehow triggered some red flag. That I can agree with you on.
“[Twoflower] also believed that anyone could understand anything he said provided he spoke loudly and slowly, that people were basically trustworthy, and that anything could be sorted out among men of goodwill if they just acted sensibly.” -The Light Fantastic, Terry Prachett
Do you have a link to a news article or court records for that case?
It’s in the John Oliver segment about structuring, which for some reason I can’t find right now. It’s in there though. That’s the only reason I know anything about this stuff.
Which this wasn’t.
True. I’m talking about this statement you made:
You don’t even have to be doing it on purpose to be guilty
That part is false. If you aren’t doing it on purpose, you’re missing the intent required to be in violation of the law. I’ll quote again:
No person shall, for the purpose of evading the reporting requirements of…
And yes, I was talking about getting a call from the bank. That will happen pretty much every time unless it’s very clear that you’re trying to break the law, and getting a call from the bank could tip you off to destroy evidence or something.
If you know about the reporting requirements and are actively trying to avoid them (like the OP), I would hope you’d know enough to not admit to that over a potentially recorded line. If you’re unaware of the law and were not trying to avoid reporting requirements, there is very little, if any, harm in explaining yourself (they already have the evidence anyway).
That part is false. If you aren’t doing it on purpose, you’re missing the intent required to be in violation of the law.
Yeah. Like I said, I think you are correct that I was misremembering, and the letter of the law is as you said.
If you’re unaware of the law and were not trying to avoid reporting requirements, there is very little, if any, harm in explaining yourself (they already have the evidence anyway).
Maybe. Like I said, if there’s a totally innocent explanation and the bank is who you’re talking to, then probably you’re right that just giving the innocent explanation is fine.
It still just makes me incredibly queasy as a general rule, because there can be tiny elements (like in this case the issue of intent) where if you don’t know the statute, and you’re just kind of explaining stuff, you can accidentally confirm some minor element of the statute that they otherwise would have had some incredibly difficult time proving and give your lawyer fits and maybe do some time. It’s just a really bad habit to get into. They might have the material evidence of what transactions happened, but not the why, and your explanation of why it was innocent might accidentally confirm something in the statute. Whether or not you “meant any harm” or anything, and certainly whether you were aboveboard in your first interview before you talked with a lawyer just to be safe, is often totally irrelevant in court.
If the bank calls you, just explain. Assuming you’ve been following the law, which you really should have been. If it’s anything else, it should be Shut the Fuck up Friday.
By my foggy memory of the mandatory money laundering training from when I worked at a bank a few years ago, basically any unusual transactions are supposed to be reported to the IRS, and bank employees will notice multiple large withdrawals in short succession. Also if I remember correctly the mandatory reporting amount is not per lump sum but includes over time as well. While I worked there I overheard plenty of bonkers reasons people decided to do strange things with their money so just withdrawing a large sum of money for any reason is fine. It’s your money to do with as you see fit .
Simply put, don’t try to hide what you’re doing. Just do it and own it if/when asked
The bank reporting requirements are primarily to protect against money laundering. That is, obscuring the source or destination of illegally-obtained funds through instruments that don’t leave a veritable paper trail (eg cash). The mandatory reporting threshold in the USA is for cash transactions (whether deposits or withdrawals) is $10,000, but bank clerks are instructed to also look for other signs of suspicion even if the transaction is smaller than that amount (eg repeated withdrawals that conveniently are below the mandatory threshold).
But reporting just means the clerk might have to ask one or two clarifying questions, to fill in the mandatory report. They usually otherwise perform the transaction unless the bank itself suspects money laundering or fraud is happening right now, which is very rare.
I personally have bought and sold a few automobiles with cash over the last decade or so, and have had no issue handling low-five figure sums with banks and credit unions, apart from their clarifying questions.
In short, don’t bother with breaking up transactions into smaller sums or whatever. That will almost always garner more suspicion than just doing a single large transaction.
That said, are you planning to buy gold in cash? Do they not offer wire transfer or ACH payment options? Those have no reporting requirements, precisely because the paper trail is already created and is traceable with the right warrants.
(I have other misgivings about whether financial privacy has taken a back seat, the opposite of the robust communications privacy we currently enjoy. But that’s a different can of worms).
You’re more likely to get flagged for AML/KYC by your financial institution. Which usually just results in a phone call.
There’s no trick or window to getting around IRS reporting. If it was a taxable event it’ll get reported to the IRS.
For legitimate reasons, I deposit large amounts of cash into a business account a few times each year. I report my social security info each time, and I’ve never once been contacted about it.
Just move it at once. Don’t do the structuring thing that was explained elsewhere. Or do a wire transfer.
I would just do the one big transaction. I’ve done it in the past (after selling a house, after getting disability lump sum payment, etc), never had an issue.
If you’ve got a reasonable explanation for where the money came from / where it went, you should be fine.
IRS doesn’t care when you buy gold, only when you sell it. At that point, it’s treated like capital gains on any other investment.
For completeness, the IRS will care about when property is obtained, since when you sell it, the capital gains tax rate is different for short-term gains (typically less than 1 yr) and long-term gains (typically over a year). It’s just that they don’t require a report when you acquire said property (unless it’s cryptocurrency, which might require you to answer a yes/no question on your tax return that year, even when merely buying and not selling).
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