If you deposit $10,000 or more in cash at your bank, you need to understand what will happen. Although this is a perfectly legal transaction, there are several things to consider.
The first step is to determine whether or not your bank has the capability to report your deposits. A bank must file an IRS Form 8300, called a Currency Transaction Report, if it receives a large deposit.
The form requires the name and address of the account holder, the name of the company the deposit came from, and a Social Security number. After the report is filed, the bank is required to notify local and national officials of the suspicious activity.
The IRS is also responsible for reporting to the government all businesses that receive more than $5,000 in cash. This includes large cash-only purchases by private businesses, as well as cashier’s checks and money orders.
However, if you make a large deposit in cash, it will not necessarily trigger a response from the authorities immediately. However, if the amount is higher than your bank’s maximum limit, your bank may report your activity to the IRS.
The Bank Secrecy Act is a law passed in 1970 that requires banks to report all transactions over a certain dollar threshold. The law was created to curb illegal activities and deter financial crimes, such as money laundering.
When you deposit ten thousand dollars in cash, your bank is required to report this information to the IRS. It is called the “10,000 Rule” and it was designed to curb money laundering and financing terrorist activities.