My friend got cash ($35,000) from his relatives when they came to visit. He split the money up into small chunks and finally deposited all of it to his bank account within five months (less than $10K each time). Does the bank report this to IRS or goverment? His income is very low every month, so will it be a problem for him? What can he do to avoid the problem? After he deposited the money over five to six months, he decided to use it for a mortgage down payment. Will he be in any trouble?
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There is a section of federal regulations commonly referred to as the Bank Secrecy Act regulations, 103.63 of 31 CFR Part 103, a regulation of the U.S. Department of the Treasury. What it says is that anyone who knowingly structures a series of cash transactions in an attempt to avoid the cash transaction reporting requirements of the regulation is violating federal law. Your mention that all of the deposits were less than $10,000 indicates that someone knows of the requirement that cash transactions over that amount must be reported. Whether your friend will experience problems or owe a tax liability for the $35,000 he received is also something you should seek legal advice on.
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There is a section of federal regulations commonly referred to as the Bank Secrecy Act regulations, 103.63 of 31 CFR Part 103, a regulation of the U.S. Department of the Treasury. What it says is that anyone who knowingly structures a series of cash transactions in an attempt to avoid the cash transaction reporting requirements of the regulation is violating federal law. Your mention that all of the deposits were less than $10,000 indicates that someone knows of the requirement that cash transactions over that amount must be reported. Whether your friend will experience problems or owe a tax liability for the $35,000 he received is also something you should seek legal advice on.
