I understand that making a large cash deposit can trigger an IRS audit. I have about $75K to deposit. It's a mix of a loan I made to a friend by check that he paid back in cash, and a cash gift from my parents (under the tax-free gift limit).

I want to deposit the cash for safety and so that I can use it easily. Although I'm not involved in anything illegal, I'm worried about two things:

  1. The hassle of going through an IRS audit, and
  2. The risk that if I get audited, so will my friend and parents.

Am I right to worry about both of these?

  • It would be better if your friend deposits the money in HIS account and gives you a bank check. Same for the parents. Jan 3, 2017 at 5:48
  • 3
    I knew someone who's parents gave her money for a house. $100k+ in cash, which had never been in a bank (her mom would collect $100s in a household safe over decades). The bank had a problem with this as the cash amount was so large, but the fix for her was a notarized letter from the parents stating they were the source of the cash, it had been legally reported to the IRS as past income, and that was it. It might trigger an audit, but that's not a crime; make sure you have a verifiable paper trail when they almost inevitably ask for more details.
    – BrianH
    Jan 3, 2017 at 23:47

4 Answers 4


Am I right to worry about both of these?

Of course. Who carries $75K in cash for no good reason? Your friend got the cash from somewhere, didn't he? If its legit - there's paper trail to show. Same for your parents.

If you/they can show the legit paper trail - there's nothing to worry about, the hassle, at worse, is a couple of letters to the IRS. If the money is not legit (your friend is selling crack to the kids in the hood and your parents robbed a 7/11 to give you the money, for example) - there may be problems.

  • 2
    One thing that will cause hassles is if the $75K is deposited not as a lump sum in one transaction but in amounts less than $10K each, as pointed out in @Paul's answer. Feb 11, 2015 at 14:09

Yes you should worry and take care not to violate the law or provide any appearance of impropriety.

Every bank in the USA is required under the Bank Secrecy Act to report cash transactions over $10,000 the same day to the IRS -- and here's the fun secret part -- without notification to the depositor.

But splitting the deposits up into smaller amounts is also a crime, called "structuring".

On occasion there is a news story where a retail business that naturally must deposit cash from customers will be (falsely?) accused of structuring, e.g.:

Feds seize grocery store's entire bank account -- Institute for Justice defends grocer

Under the legal doctrine of civil asset forfeiture, your money can be accused of a crime, seized, and tried separately from its owner. The actual cases indicate the money as defendant, i.e. "US v $124,700"

In this somewhat bizarre system of "justice", the owner need not be charged with a crime, and is not in immediate peril of going to prison (about the only upside in this, but might be temporary because the authorities haven't charged the owner yet). When only the money is charged with a crime, there is no requirement for the government to supply a public defender for the owners who can not afford a lawyer.... can not afford a lawyer, because the government took all their money....

  • 2
    A minor note: Banks can but are not required to inform customers that they will file a CTR while they are prohibited from disclosing filing of a SAR. Banks are required to obtain certain identification details from customers to complete a CTR if they do not already have it and will explain it's because they must file a CTR. Fincen publishes a pamphlet banks can supply to customers explaining the CTR requirements. It also describes the crime of "structuring," and notes it has nothing to do with any other illegal activity except avoidance of CTRs.
    – doug
    Dec 28, 2016 at 18:51

Why would you even accept 75K in cash? If anything is going to trigger an audit, this will be it. 75K in cash deposited will look like money laundring, so you better have a paper trail ready to prove this is legal or this won't end well.


In the event of an audit, you AND your friends need to have already reported the cash the same way in previous tax filings. Even differences between legitimate sources can result in civil and criminal sanctions from the IRS, let alone questionable, dubious and illegal sources.

  • 1
    That's true, loan interest should have appeared on your schedule B
    – littleadv
    Jan 20, 2014 at 8:48
  • What if it's an interest-free loan?
    – user541686
    Mar 27, 2017 at 23:46
  • 1
    @Mehrdad then there's no tax event. Some form of repayment terms should be able to be produced when necessary.
    – CQM
    Mar 27, 2017 at 23:52

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