We have a cash-intensive customer who have been bringing in cash proceeds less than $10K, typically once a week or so. CTR has never been filed for this customer. For obvious reasons, we've filed a numerous number of SARs for structuring. Through enhanced due diligence, however, we learned that the total volume of cash brought in during the last 12 months is less than the amount the customer filed on its tax return. For that matter, it seems that they weren't trying to skip out on taxes. The question is, now that we are sure the business is not evading taxes, is it right to continue to file SARs solely based on the amount being brought in (<$10K per transaction)?

If you have sufficient documentation to support the fact that the cash deposits are not suspicious or structured, why would you continue to report?

Two words, Randy, "Defensive filing."

I think that under $10,000 a week by itself should not trigger a SAR.
You did not say what industry the customer is in - perhaps the volume is consistent with the nature of the business...?

You also mentioned that you have filed numerous SARs..
Your policy should state that you will close the account after a certain number. For example, a lot of banks will draw the line at 3 filings.

So assuming the cash does not fit the line of business and is therefore suspicious, - and if you have a cut off number for filings, that would be the end of it... You would then close the account.

Going back to your question of should you continue to file SARs, I think the answer is No, ..you should be closing the account if you think the activity is suspicious, and further you should have your policy updated with the maximum number of SARs that you will file so you can put closure to these scenarios.

An additional comment - I think checking tax returns to cash in etc is above and beyond the call of duty. My humble opinion.

I don't believe there is any requirement that any bank close accounts simply because a certain number of SARs have been filed. Some banks may have written these kinds of practices into their policies as a way to address the need to appropriately review ongoing suspicious activity, but having a "magic number" threshold doesn't seem to be a requirement. Of course, a bank must adhere to whatever's in its own policy....

"......it should continue to review the suspicious activity to determine whether other actions may be appropriate, such as bank management determining that it is necessary to terminate a relationship with the customer or employee that is the subject of the filing." (p. 76 of the FFIEC Manual, italics mine)

Even if policy did call for closing the account after three filings, this bank apparently now realizes the deposit patterns aren't suspicious, and [probably] won't need to do more filings, so what sense would it make to shut the account down now?

Well, if I understand the situation correctly, you have a reason to believe that the customer is not evading their taxes and the origin of the funds is legitimate. It would come down to if you still feel the customer is structuring. If so, continue to file. If not, document your rationale and move along.

As a reminder, there is no requirement to close any account.