Recently received an IRS Summons on a business cusotmer. We were only asked to get copies of 4 random checks from each statement. This customer has recurring NSF activity. When obtaining copies of checks for the 2 year period, I noticed that half way thru there were no longer any payroll checks showing up on their bank statement. I do not believe that the customer has an account elsewhere, but I doubt it. Also, I have noticed that their physical deposits have dropped ($ wise).
It is suspicious, but I am not sure how or if a SAR should be filed. I do not have a dollar amount to report.

Please help with any suggestions!!!

Is business declining and they laid off staff?

So you would file a SAR based on your customer not having payroll checks issued and decline in deposits? HOW and WHY is that suspicious?

On a flip side, if you were never summoned by the IRS and looked at the same transaction for whatever reason, would you have suspected otherwise? IMHO, I think you are (subconsciously) being influenced by the summon and not looking at the activity objectively.

The summons is the trigger for enhanced due diligence, not the filing of a SAR. So, you are on the right track in looking at the activity and trying to figure it out. However, if the activity does not show you the basis for filing a SAR you will not file one.

Without knowing more about the checks they wanted and the nature of the customer's business, the possibilities represent too wide of an array to speculate.

Thank you Ken!