12

Is there a maximum amount limit on exceeding which the tracking starts? Or does each and every check deposited by me gets tracked by IRS for reconciliatory purposes?

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    Maximus - Why do you think they track your checks at all? Did you see this somewhere? – gef05 Jun 23 '11 at 0:08
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    Time to take off he tin foil hat and back away from the conspiracy theory websites. The only time the IRS looks at bank accounts in detail is if you get audited.. at that point if there are a lot of deposits that don't come from some source that's already on record (e.g. you get a W2 or 1099 from them) you are likely to face questions on where that money came from and if it's been reported as income etc. – Chuck van der Linden Jun 23 '11 at 5:43
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They don't track checks at all.

If you make a cash transaction for an amount that exceeds the reporting limit (circa $10K), then a Currency Transaction Report will be filed with the US Department of the Treasury (not IRS, but close) about it. This is to detect and prevent money laundering.

  • doesn't "circa" mean approximately, or "about" and used to indicate the precise number isn't known? – JoeTaxpayer Aug 10 '15 at 14:54
11

The IRS gets notified when you:

  • Earn job income (Form W-2)
  • Earn interest/dividend income, retirement income or sell securities. (Form 1099)
  • Earn royalties
  • Earn partnership income (Form K-1, K-2)

(Note this is not a comprehensive list)

As littadv mentioned, banks are required to send a CTR for any transactions over $10,000. They also are obligated to file a SAR (Suspicious Activity Report) for transactions deemed "suspicious" by bank policy. These filings are primarily for law enforcement purposes. The IRS may or may not have access to this information.

The IRS isn't all-seeing or all-knowing. But -- In the event of an audit, checks do provide a paper trail documenting the origins of your deposits. So if you fail to report income from an "off the books" job, or do not fully report self-employment income, deposit records could be used against you. You are particularly vulnerable to this if you are in a profession where "off the books" transactions are routine -- plumbers, auto repair, vending machines, etc.

At the end of the day, give Caesar his due, and you'll have alot less to worry about.

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    And remember that "that which is due unto God is deductible from that which is due unto Caesar" – Dilip Sarwate Jun 24 '15 at 1:47
  • Are banks required to send a CTR for any transactions over $10,000 ? I thought only CASH transactions over $10,000 – Kevin Fegan Jan 7 '16 at 2:18
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    The $10,000 CTR limit applies to CASH transactions. Transactions by one person will be aggregated each day. Depositing $5,000 cash and driving to another branch and depositing $5,001 will trigger a CTR (and likely a SAR in the obvious attempt at structuring). Additionally, banks must keep a monetary instrument log of any monetary instrument (cashier's check or money order) purchased with cash between $3,000 and $10,000. – Jesse Feb 4 '16 at 21:32

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