Thread Options
|
#1652431 - 01/18/12 09:03 PM
SAR Tax Evasion
|
Gold Star
Joined: Mar 2006
Posts: 336
Bank
|
We have a loan customer who notified us they have 20,000 dollars of income not reported.
Should we file a SAR on this individual for tax evasion or is that an IRS issue?
_________________________
Thanks
|
Return to Top
|
|
|
|
#1652456 - 01/18/12 09:23 PM
Re: SAR Tax Evasion
mstark
|
10K Club
Joined: Jul 2001
Posts: 84,326
Galveston, TX
|
We have a loan customer who notified us they have 20,000 dollars of income not reported.
Should we file a SAR on this individual for tax evasion or is that an IRS issue? I concur with AgentP, unless they somehow misrepresented their income on any information provided to the bank as that would be loan fraud. If the customer just told the loan officer that, then I don't see it as actionable. Please tell us the LO didn't include the $20,000 in the credit underwriting process........
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com
|
Return to Top
|
|
|
|
#1652464 - 01/18/12 09:28 PM
Re: SAR Tax Evasion
mstark
|
Power Poster
Joined: Sep 2001
Posts: 6,029
Sweet Home AL
|
If the customer indicated that in a prior tax year, he had $20k that he knew was reportable as income, but he failed to do so, I would file a SAR.
If he indicated that he had $20k for current tax year that was not reflected in his income, I probably would not file. He has not committed tax fraud...yet.
_________________________
Life without Jesus is like an unsharpened pencil - it has no point.
|
Return to Top
|
|
|
|
#1652468 - 01/18/12 09:17 PM
Re: SAR Tax Evasion
mstark
|
Power Poster
Joined: Oct 2009
Posts: 3,927
|
My major concern would be how the lender is verifying the income that is allegedly not being reported. This is especially critical on HPMLs, but will start becoming more so on all loans eventually.
_________________________
I hear and I forget. I see and I remember. I do and I understand.--Confucius
|
Return to Top
|
|
|
|
#1652469 - 01/18/12 09:18 PM
Re: SAR Tax Evasion
BrendaC
|
Power Poster
Joined: Nov 2001
Posts: 6,719
PA
|
If the customer indicated that in a prior tax year, he had $20k that he knew was reportable as income, but he failed to do so, I would file a SAR. Even if it has nothing to do with activity conducted at or through the bank?
|
Return to Top
|
|
|
|
#1652470 - 01/18/12 09:19 PM
Re: SAR Tax Evasion
Doug Hendrickson
|
Power Poster
Joined: Nov 2001
Posts: 6,719
PA
|
My major concern would be how the lender is verifying the income that is allegedly not being reported. This is especially critical on HPMLs, but will start becoming more so on all loans eventually. And I think that's where randy was going with his statement about not including the $20k in underwriting.
|
Return to Top
|
|
|
|
#1652509 - 01/18/12 10:11 PM
Re: SAR Tax Evasion
mstark
|
Power Poster
Joined: Jul 2008
Posts: 4,797
You are here
|
http://www.ffiec.gov/bsa_aml_infobase/documents/new_6_08/SAR_Act_Rev_12.pdfPAGE 14 Law Enforcement Support Several Other types of suspicious activity are regularly indicated and are of enormous value to specific law enforcement agencies, such as: Tax Evasion; Fraudulent W-2; Narcotics Trafficking; Currency Smuggling; and Employing Illegal Aliens. Would they be voluntary?
_________________________
Opinions can be considered as coming from anywhere but my employer.
CAMS
|
Return to Top
|
|
|
|
#1652513 - 01/18/12 10:30 PM
Re: SAR Tax Evasion
mstark
|
10K Club
Joined: Jul 2001
Posts: 84,326
Galveston, TX
|
I agree, if you have something to support it. Think of your supporting documentation. A hand written note saying that the applicant mentioned this to a LO in a loan interview? That is a little different from providing fraudulent W-2 and other suspicion of tax evasion that can be supported through documentation in possession of the bank.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com
|
Return to Top
|
|
|
|
#1652557 - 01/19/12 03:30 AM
Re: SAR Tax Evasion
mstark
|
Power Poster
Joined: Nov 2001
Posts: 6,719
PA
|
But even a fraudulent W2 or tax return doesn't necessarily indicate tax evasion. Loan fraud, sure. Tax evasion, possibly, but not likely.
Ed- to answer your question as to whether or not those filings are voluntary, I'd say what does the activity look like? If it's reportable activity, file it. Narcotics trafficking, employing illegal aliens- these are almost always going to involve transaction activity that, in and of itself, meets the reporting thresholds. And if, when reporting suspicious activity, you suspect tax evasion is a factor, say so.
All I'm saying though, is that as a standalone reason, it's next to impossible to justify filing for tax evasion because tax evasion isn't activity.
|
Return to Top
|
|
|
|
#1652626 - 01/19/12 01:48 PM
Re: SAR Tax Evasion
mstark
|
Power Poster
Joined: Jul 2006
Posts: 4,443
New York City
|
I don't know Agent. I have a number of customers who are cashing out checks made payable to "cash" and using the funds to pay employees. Every regulator and LE Officer I have spoken to want SAR's filed for tax evasion (payroll).
However, in this particular case, I agree with you. There does need to be some activity going at or through the bank. A comment alone won't do it.
_________________________
"100 victories in 100 battles isnt the most skillful. Subduing the other's military w/o battle is the most skillful." Sun-Tzu
|
Return to Top
|
|
|
|
#1652661 - 01/19/12 02:39 PM
Re: SAR Tax Evasion
ACBbank
|
10K Club
Joined: Jul 2001
Posts: 84,326
Galveston, TX
|
"I have a number of customers who are cashing out checks made payable to "cash" and using the funds to pay employees. Every regulator and LE Officer I have spoken to want SAR's filed for tax evasion (payroll). "
I'm not sure how paying a cash payroll equals tax evasion. They may be paying independent contracts or they may be paying their proper withholding taxes. While it might trigger a quick investigation, it is not a one size fits all outcome.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com
|
Return to Top
|
|
|
|
#1652667 - 01/19/12 02:31 PM
Re: SAR Tax Evasion
mstark
|
Power Poster
Joined: Sep 2001
Posts: 6,029
Sweet Home AL
|
AgentP - From SAR Activity Review...
"By requiring the reporting of transactions “conducted or attempted by, at, or through” an institution, FinCEN recognizes that reportable activity does not necessarily happen at an institution’s physical location."
_________________________
Life without Jesus is like an unsharpened pencil - it has no point.
|
Return to Top
|
|
|
|
#1652811 - 01/19/12 04:07 PM
Re: SAR Tax Evasion
mstark
|
10K Club
Joined: Oct 2000
Posts: 40,086
Cape Cod
|
If a loan applicant claims that he has annual income of $150,000 on an application for a $300,000 mortgage and you see that his most recent tax return reflects income of only $75,000, you will require him to to reconcile the two numbers, right? If you determine that he can't reconcile the numbers, he either overstated his income to the bank (fraudulent loan application) or understated his income to the IRS (possible tax evasion). In either case, you've got a SAR to consider.
But a simple statement (braggadocio?) that he didn't report income to the IRS when it's not related to any transaction at the bank doesn't pull my SAR trigger.
_________________________
John S. Burnett BankersOnline.com Fighting for Compliance since 1976 Bankers' Threads User #8
|
Return to Top
|
|
|
|
#1652866 - 01/19/12 04:29 PM
Re: SAR Tax Evasion
mstark
|
100 Club
Joined: Jun 2011
Posts: 156
New York, NY
|
Unless you tape recorded the conversation, there is no supporting documentation. Hence, a SAR should not be filed solely based on a verbal comment.
_________________________
"Give thanks in all circumstances; for this is God's will for you in Christ Jesus." -Thessalonians 5:18
|
Return to Top
|
|
|
|
#1652938 - 01/19/12 05:12 PM
Re: SAR Tax Evasion
rlcarey
|
Power Poster
Joined: Jul 2006
Posts: 4,443
New York City
|
"I have a number of customers who are cashing out checks made payable to "cash" and using the funds to pay employees. Every regulator and LE Officer I have spoken to want SAR's filed for tax evasion (payroll). "
I'm not sure how paying a cash payroll equals tax evasion. They may be paying independent contracts or they may be paying their proper withholding taxes. While it might trigger a quick investigation, it is not a one size fits all outcome. Agreed. But the conversations that I have had with regulators go along the lines of "It's not proof of tax evasion, but is suggestive of it." I'm not going to play accountant and attempt to reconcile tax returns to bank statements. It's almost easier to file the SAR and be done with it.
_________________________
"100 victories in 100 battles isnt the most skillful. Subduing the other's military w/o battle is the most skillful." Sun-Tzu
|
Return to Top
|
|
|
|
#1652955 - 01/19/12 05:31 PM
Re: SAR Tax Evasion
mstark
|
10K Club
Joined: Jul 2001
Posts: 84,326
Galveston, TX
|
I wonder why tax evasion is not a check box on the SAR form
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com
|
Return to Top
|
|
|
|
#1653120 - 01/19/12 06:58 PM
Re: SAR Tax Evasion
rlcarey
|
Power Poster
Joined: Jul 2006
Posts: 4,443
New York City
|
I wonder why tax evasion is not a check box on the SAR form Preaching to the choir Sir.
_________________________
"100 victories in 100 battles isnt the most skillful. Subduing the other's military w/o battle is the most skillful." Sun-Tzu
|
Return to Top
|
|
|
|
#2152060 - 11/02/17 03:19 PM
Re: SAR Tax Evasion
mstark
|
Diamond Poster
Joined: May 2013
Posts: 1,076
Compliance Land
|
Kind of along these same lines...
We have a commercial loan customer who purchased real estate and each of the last three months has made payments of around $12k but $9k in cash then writing a check for the other $3k. What are your thoughts on this? The LO has explained where the cash comes from but just seems odd that loan payments are never over $10k in cash but consistently $9k.
_________________________
How long until retirement??
|
Return to Top
|
|
|
|
#2152067 - 11/02/17 03:23 PM
Re: SAR Tax Evasion
mstark
|
10K Club
Joined: Jul 2001
Posts: 84,326
Galveston, TX
|
File.
_________________________
The opinions expressed here should not be construed to be those of my employer: PPDocs.com
|
Return to Top
|
|
|
|
#2152076 - 11/02/17 03:34 PM
Re: SAR Tax Evasion
mstark
|
Diamond Poster
Joined: Feb 2014
Posts: 1,030
Southern U.S.
|
File, and generally cash loan payments alert for us at fairly low levels and if it's a continuing thing we instruct the account officer to re-direct the customer's cash activity to the appropriate deposit account (and give them the CTR Reference Guide, if needed).
|
Return to Top
|
|
|
|
#2152096 - 11/02/17 04:24 PM
Re: SAR Tax Evasion
mstark
|
Diamond Poster
Joined: May 2013
Posts: 1,076
Compliance Land
|
Thanks for confirming my suspicion. What box(es) in Part II of the SAR do you think would be marked for this type of activity?
_________________________
How long until retirement??
|
Return to Top
|
|
|
|
#2152101 - 11/02/17 04:34 PM
Re: SAR Tax Evasion
mstark
|
Diamond Poster
Joined: Feb 2014
Posts: 1,030
Southern U.S.
|
Suspicion concerning source of funds, and 'other' for unusual cash. That's how we do it.
|
Return to Top
|
|
|
|
|
|