If I have someone (a family member) pay a portion of my U.S. credit card debt[Repayments] from a bank abroad. The money is directly paid to the credit card account and not to my regular bank account.

Will this be suspicious transaction and counted as taxable income?

I know that the IRS monitors bank deposits if they are above $10K. But do they have a way of monitoring credit card payments and charging you with taxes owed?

  • 1
    It doesn't sound like you would owe any taxes in this situation, so what is your primary concern?
    – Joe
    Oct 10 '16 at 18:30
  • 1
    my concern is that i may have to spend time answering questions if IRS decided to audit me. even though i wouldn't owe in the end, i would not like to spend any time justifying myself
    – amphibient
    Oct 10 '16 at 18:35

US bank deposits over $10K only need to be reported to FinCEN (Financial Crimes Enforcement Network- a bureau of the US Department of Treasury) if the deposits are made in cash or other money instruments where the source cannot be traced (money orders, traveler checks, etc). Regular checks and wires don't need to be reported because there is a clear bank trail of where the money came from.

If your family member is giving you money personally (not from a business) from a bank account which is outside of the US, then you only need to report it if the amount is over $100K. Note, you would need to report that regardless of whether the money was deposited into your US bank account, or paid directly to your credit cards on your behalf, and there are stiff penalties if you play games to try to avoid reporting requirements. Neither deposit method would trigger any taxable income for the scenario you described.

  • Not quite; cash transactions over $10k at a bank are reported not to IRS but to FinCEN, a different part of the Treasury Department with no responsibility or authority for tax administration. (On the other hand foreign accounts and some assets of US persons, over differing thresholds, must be reported both to FinCEN under BSA and IRS under FATCA.) Oct 10 '16 at 23:45
  • @dave_thompson_085, thanks for pointing that out. The departments are related but I edited to be more exact. Here's the form the banks fill out: irs.gov/pub/irs-tege/fin104_ctr.pdf
    – TTT
    Oct 11 '16 at 15:29

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