This has probably been asked before and I could not locate it. I am in the process of reviewing for CTR Exempt Customers and trying to determine if any new ones can be placed on the list. I have come on a Convenience Store that qualifies for exempt status. I am reviewing the business account and I have noted they cash two checks a month and the check is over $1,000 each time. The check is a payroll check payable to the same person. No other checks over $1,000 are cashed. They are not registered as a MSB. My question is, can I place them on the exemption list and not require them to register as a MSB. Or should I not place them on exempt status and require them to be registered as a MSB.

Thanks for your help.

Cashing their own payroll checks does not make them an MSB.

Cashing checks over $1,000 for the same payee in a day makes the customer an MSB subject to FinCEN registration and perhaps state licensing as well (you need to research your state's requirements). A SAR is required for operating as an MSB without registration. Exempting them is a separate issue but in my opinion I would never exempt them.

From the original post it is not stated that the checks are their own payroll checks. If they are, as Randy stated they are not an MSB but if the checks are not their own then I stand by my reply.

A CTR exemption has nothing to do with an MSB being exempt from registering with FinCEN. You cannot exempt them from registering with FinCEN. If they are not operating as an agent of another MSB, they must register with FinCEN and possibly their state of operation as well.

They are not cashing their own payroll checks. I have reviewed further on account activity and they will be required to register as a MSB and will not be given exempt status.

Thanks

I've exempted MSBs. They just can't have more than 50% of their gross revenues derived from a non-exemptable activity.

If I have a local grocery chain that occasionally cashes a payroll check (& that's ALL they do), yes I make them register as an MSB ... but I also wouldn't think twice about granting an exemption.

Are you sure it is based off of Gross Revenue and not net Income?
Because you can have someone that owners a C-store that makes 70% of the gross revenue and also operate an auto dealer out of the same business and that makes 70% of the net Income. I just want to be sure before I Exempt this customer. Thanks

"A business that engages in multiple business activities may qualify for an exemption as a non-listed business as long as no more than 50 percent of its gross revenues per year are derived from one or more of the ineligible business activities listed in the rule...

...For example, if a business engages in lottery sales, the “gross revenue” from this activity would be the amount of money that the business actually earns from lottery sales, rather than the amount of money that the business takes in on behalf of the state lottery system. Refer to FinCEN Ruling 2002-1, www.fincen.gov."

Thanks for the link BrendaC

In this example how would you prove or document that more than 50% of gross revenues per year is not from ineligible business activities.