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If a friend is depositing (transferring) cash into my bank account in parts, is that considered structuring? To be more specific, he is waiting on specific amounts and deposits whatever is on hand. First transfer/deposit was 5k. The second transfer/deposit would be around the same amount as well, nor will it be the last. And yes, the money is being withdrawn from my end.

In short, does structuring involve others depositing cash in your account in parts? Keep in mind that the amount might exceed 10k without being withdrawn.

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    I do not mean to be pedantic, but can you specifically describe the transfer? I ask because you use the word cash but you also use the word transfer. Is he walking into your bank with a wad of $100 bills? Or is he doing this via check or online transfer? – JTP - Apologise to Monica Nov 10 '16 at 11:53
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    When you withdraw the money what do you do with it? And do you withdraw it as cash, check, or something else? – mhoran_psprep Nov 10 '16 at 12:08
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    Yes, you're going to be caught for certain. – Fattie Nov 10 '16 at 12:10
  • @joetaxpayer He basically walks into my bank and deposits cash into my account. – Shadi Nov 10 '16 at 15:46
  • @mhoran_psprep I only withdrew the first 5k for monthly expenses. I'm not planning on withdrawing everytime he deposits. Yes I withdraw it as cash – Shadi Nov 10 '16 at 15:47
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See "Structuring transactions to evade reporting requirement prohibited."

You absolutely run the risk of the accusation of structuring. One can move money via check, direct transfer, etc, all day long, from account to account, and not have a reporting issue. But, cash deposits have a reporting requirement (by the bank) if $10K or over. Very simple, you deposit $5000 today, and $5000 tomorrow. That's structuring, and illegal.

Let me offer a pre-emptive "I don't know what frequency of $10000/X deposits triggers this rule. But, like the Supreme Court's, "We have trouble defining porn, but we know it when we see it. And we're happy to have these cases brought to us," structuring is similarly not 100% definable, else one would shift a bit right."

You did not ask, but your friend runs the risk of gift tax issues, as he's not filing the forms to acknowledge once he's over $14,000.

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Structuring, as noted in another answer, involves breaking up cash transactions to avoid the required reporting limits.

There are a couple of important things to note.

  1. Your bank is required to report transactions that exceed the limit ($10k, if my memory serves)
  2. Your bank may at its discretion report smaller transactions that appear to be questionable
  3. Simply reporting the transaction does not automatically bring any enforcement action unless other activities warrant more scrutiny

And, the biggest caveat - there have been many cases of perfectly legitimate transactions that have fallen foul of the reporting requirements. One case springs to mind of a small business that routinely deposited the previous day's receipts as cash, and due to the size of the business, those deposits typically fell in the $9,000-$9,500 range. This business ended up going through a lot of headaches and barely survived. Some don't.

A single batch of transactions, if it is only 2 or 3 parts and they are separated by reasonable intervals, is not likely in and of itself to be suspicious. However, any set of such transactions does run the risk of being flagged.

In your case, you also run afoul of the Know Your Customer rules, because it's not even you depositing the cash - it's your friend. (Why can your friend not simply write you a check? What is your friend doing with $5k of cash at a time? How do you know he's not generating illegal income and using you to launder it for him?) Were I your bank, you can be very certain I'd be reporting these transactions. Just from this description, this seems questionable to me.

IRS seizes millions from law-abiding businesses

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There's a difference between your street level drug dealer sending you sales proceeds of $20,000 in $5,000 increments to avoid sending you $10,000 or $20,000 at once to avoid the scrutiny of a government agency that might not be thrilled with your business venture, and a tire shop paying a wholesaler $5,000 each time funds are available up to the amount owed of $20,000.

The former is illegal for a few reasons, and the latter is business as usual.

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    And yet, I witnessed first hand how a bank wasn't happy with regular $5000-$9000 cash deposits. If this is a legit business, I strongly recommend they talk to the branch manager and discuss the best way to make such deposits. My own advice would be to accrue the funds and deposit $10K+ each time acknowledging that you know the paperwork will be submitted, and not risk being accused of structuring. Last, if I were the wholesaler, I'd ask why the tire shop can't deposit the money and write me a check. – JTP - Apologise to Monica Nov 12 '16 at 15:01
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In the Anti-Money Laundering World ( AML) , structuring consists of the division ( breaking up) of cash transactions, deposits and withdrawals, with the intent to avoid the Currency Transaction Reporting ( CTR) filings. In your case the issue is not structuring but the fact that you have another person ( unknown to the bank) depositing cash , event if it is above the CTR threshold, for you to withdraw later .

The entire scenario raises a lot of questions.

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