Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 5
Would eight of $5K deposits spaced over a couple of months avoid all unnecessary attention? Could even be done at an ATM.

I was wondering when this would come up, which is why I've stayed out of the discussion. The motivator for currency transaction reporting is money laundering, not tax enforcement. This series of transactions would be much more likely to trigger investigative interest than a one-time $40,000 cash deposit. (It's also illegal if done with the intent to avoid transaction reporting, and the banks are required to report these patterns.) It's easy to explain that you inherited $40,000 cash, but not easy to explain why you're trying to slip under the radar. From a tax standpoint, this approach coupled with a cash-based business, e.g. a laundromat, would just about guarantee an excruciating audit. In general, law enforcement people's instincts say, "If you're not up to something, why are you trying to hide what you're doing?" I found extreme inbred curiosity to be my greatest asset when working in tax enforcement.

As for the Grandpa's affairs angle, if he was running drugs and amassed only $40,000, he wasn't very good at it. IRS could, of course, try for an unreported income "cost of living" reconstruction, but I would find the "old crank who didn't trust banks" perfectly reasonable for anyone who lived through the bank holiday.

Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.