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#1559372 - 06/01/11 09:41 PM CTRs- aggregating affiliates of customers
Burgess Offline
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we have an exam point that we need to adopt procedures on CTR filings where we will aggreagate affiliates of customers .."in certain instances"

Can anyone offer any guidance here?

fellow owns two seperate corporations and they each deposit $6k in cash the same day - surely we wouldn't aggregage.

I can understand if the fellow owned two DBAs, but not corporations.

anyone else had to address this?
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#1559383 - 06/01/11 09:57 PM Re: CTRs- aggregating affiliates of customers Burgess
Elwood P. Dowd Offline
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My guess is that your level of comprehension is higher than that of the person offering the criticism. You do not aggregate based on common ownership of entities as long as those entities are actually operated separately from one another.

It's not that you are not required to do it. It's that it is wrong if you do.

If Andy is the sole owner of a corporation, a partner in a partnership, and a member of an LLC and each entity had a $6,000 cash deposit made by a separate person today you would not aggregate the transactions even if you knew about them. Make no mistake, for AML purposes it would be nice to know about the three transactions and the common bond between the organizations. However, it would be wrong to file a CTR.

You need to go back to the person who offered you the advice...
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#1559390 - 06/01/11 10:12 PM Re: CTRs- aggregating affiliates of customers Burgess
BrianC Offline
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FinCen has issued guidance for businesses that have a common owner who commingles funds and employees. If, in the bank's estimation the owner is operating these businesses as a single entity, then their deposits should be aggregated for CTR filing even if they have seperate Tax ID numbers.

An example is a customer who owns 3 grocery stores in town, all with seperate incorporations and tax id's. However, the managers all rotate between stores and all make deposits for each entity on a periodic basis. The stores are clearly not operating as seperate entities so their deposits would be aggregated.
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#1559412 - 06/01/11 11:28 PM Re: CTRs- aggregating affiliates of customers BrianC
Elwood P. Dowd Offline
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I cannot agree with your example. While the FinCEN Guidance mentions having common employees as one of three facts that might indicate the businesses are not being operated separately, the guidance does not suggest that they should be treated as a single entity for that reason alone. It does not indicate that a common employee's making deposits for more than one entity is a factor in any circumstance.

As it should, the exception to the non aggregation rule arises when the finances of the mutliple entities are routinely commingled; i.e. they are actually operated as a single financial entity rather than separately. The other examples given: ...the bank accounts of one corporation or business are used to pay the expenses of another corporation or business, or the corporation/business bank accounts are used to pay the personal expenses of the owner... focus on finance. While common employees may be an emblematic of a single entity, they are not a stand alone indicator of a single entity.
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#1559422 - 06/02/11 02:00 AM Re: CTRs- aggregating affiliates of customers Elwood P. Dowd
BrianC Offline
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Thanks for providing the additional clarification. The owner in my example was definitely commingling the funds as you've described. You just explained it better than I can. smile
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#1559426 - 06/02/11 02:55 AM Re: CTRs- aggregating affiliates of customers BrianC
JacF Offline

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As Ken stated, it is not correct to aggregate for CTR completion just based on the fact that multiple entites have common owners, or even common employees. CTRs are not subjective like SARs- specific transactions are reportable, others are not.

However, what your examiner may be trying to say (and not saying it well), is that your processes need to account for possible CTR triggering transactions (such as deposits into multiple entities' accounts by one person), that a system that aggregates based on ownership alone won't detect.

Here's a real world example:
One of my customers owns a bar. The bar is it's own entity, and he is the sole owner of the corporation, and sole signer on the account. His wife owns a store in the same neighborhood. Same structure- the store is it's own entity, and she is the sole owner of the corp, and the only signer on the account. The accounts have zero owners, and zero signers in common. Neither business deposits enough cash to trigger a CTR, but on occasion, the two together exceed the reporting threshold. In these cases, we file only if the husband brings all of the deposits in himself (which he usually does). But sometimes, a store employee brings the store deposits in, while the husband brings the bar deposits in, and in those situations we don't file.

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#1559444 - 06/02/11 10:48 AM Re: CTRs- aggregating affiliates of customers JacF
rlcarey Offline
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#1559719 - 06/02/11 04:52 PM Re: CTRs- aggregating affiliates of customers rlcarey
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#1563530 - 06/10/11 05:32 PM Re: CTRs- aggregating affiliates of customers kw004h
TNAndrews Offline
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Ok I understand with Corp, INC, etc. but what about DBA's? We have a customer that has 3 accounts as followed:
John Doe DBA Doe Car Wash with his SSN for tax ID
John Doe DBA Doe Thrift Shop with a EIN 11-1111111
John Doe DBA Doe Sports Bar with same EIN 11-1111111

They all make a 4k deposit on the same day at different locations, would you combine and do a CTR? My thought is yes... but want to make sure.
Just from the FINCEN Guide stating.... A sole proprietorship is a business in which one person, operating in his or her own personal capacity, owns all the assets and owes all the liabilities.3 Consistent with the definition of "person" in the Bank Secrecy Act's implementing regulations,4 a sole proprietorship is not a separate legal person from its individual owner. Thus, when filing a CTR involving a sole proprietorship, financial institutions are required to complete one section 'A', containing the name of the sole proprietorship's owner5, the sole proprietorship's DBA name, the owner's social security number ("SSN"), home address, date of birth, and occupation.6 Only one section 'A' is required, even if the business operations have a different address and/or tax identification number ("TIN") than its owner.7

Last edited by TNAndrews; 06/10/11 05:49 PM.
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#1563558 - 06/10/11 05:48 PM Re: CTRs- aggregating affiliates of customers TNAndrews
rlcarey Offline
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They are all John Doe = CTR.

You can create multiple Section As on the paper form, but you can't use the same SSN/EIN twice when e-filing. There is no specific guidance for multiple DBAs.
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#1563614 - 06/10/11 06:41 PM Re: CTRs- aggregating affiliates of customers rlcarey
Elwood P. Dowd Offline
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John Doe is one person, one customer. All deposits made to sole proprietorships he owns (DBA or otherwise) are for his benefit.

If the EINs are confusing people, the IRS would appreciate it if you switched them all to SSN's anyway. There is only one taxpayer involved here: John Doe.
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#1563648 - 06/10/11 07:05 PM Re: CTRs- aggregating affiliates of customers Elwood P. Dowd
John Burnett Offline
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Given the limitations of the e-filing system, if you're using John Doe's SSN for completion of section A, you'll be limited to providing one of his DBA names in item 5. Pick one.
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#1563937 - 06/13/11 01:34 PM Re: CTRs- aggregating affiliates of customers John Burnett
TNAndrews Offline
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Thats what I was thinking...thank you all!

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