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#1747223 - 10/05/12 06:55 PM Free Webinar on FinCEN CTR & DOEP
Elwood P. Dowd Offline
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Click here for a link to a free FinCEN webinar on the new Form 112, the FinCEN CTR, and Form 110, the FinCEN DOEP.

It contains a link to the webinar and the materials. There are some real "nuggets" in the Q & A. I personally commit to buy a beer for each of the next 5 FinCEN people I see (or 5 beers for the first one) for their answers on sole proprietorships and deposits/withdrawals from "joint" accounts. Thank you a bunch!

Comments from those who watched it?
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#1747254 - 10/05/12 07:48 PM Re: Free Webinar on FinCEN CTR & DOEP Elwood P. Dowd
StevenD Offline
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Neither this nor the SAR recorded presentation will load. I can access the site, but the presentation will not play.
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#1747257 - 10/05/12 07:53 PM Re: Free Webinar on FinCEN CTR & DOEP StevenD
Elwood P. Dowd Offline
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Sorry, they click right through for me frown.
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#1747340 - 10/06/12 02:14 PM Re: Free Webinar on FinCEN CTR & DOEP Elwood P. Dowd
Matt_B Offline
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They work for me, if I get them unblocked by IT. StevenD, could be web filter related, or you might have an update you're needing to do.
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#1747442 - 10/08/12 08:44 PM Re: Free Webinar on FinCEN CTR & DOEP Elwood P. Dowd
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Thanks for the link Ken. I just watched it and it seems that sole proprietorship transactions would be treated as transactions conducted by/for an individual, even if the sole proprietorship has a different Tax ID number. "Person Conducting Transaction on Own Behalf" would be selected and only one Part I would be completed with the owner's information because a sole proprietorship is not a separate legal entity. The only difference is that Item 8 "Alternate Name Field" would be completed with the name of the sole proprietorship/DBA, if applicable.

However, I am still unclear on the joint accounts. The Q&A question is phrased as: "How do I complete a FinCEN CTR when the funds are being deposited or withdrawn from a joint account?" but the scenarion provided to illustrate the question only addresses a deposit into a joint account. Would a withdrawal by a joint owner necessitate completion of two Part I with 2c "Person on Whose Behalf Transaction was Conducted" selected in that case as well?
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#1748762 - 10/11/12 10:06 PM Re: Free Webinar on FinCEN CTR & DOEP Elwood P. Dowd
bOaty Offline
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They didn't mention what date the new formn will be made available for use. Would that also be the 4/1/13 date?
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#1748765 - 10/11/12 10:15 PM Re: Free Webinar on FinCEN CTR & DOEP Elwood P. Dowd
Matt_B Offline
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Both the CTR and DOEP forms are live on the site now. Under the New Reports heading, below the Legacy Reports. I've not used the new CTR form yet, but have filed some SARs on the new one.
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#1748814 - 10/12/12 01:04 PM Re: Free Webinar on FinCEN CTR & DOEP Compli(cated)
Elwood P. Dowd Offline
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The Q & A on the sole proprietorship represents the high water mark on FinCEN's evoloutionary understanding of the fact that a sole proprietorship is nothing but an individual with a nickname and (maybe) two TINs. While it could be difficult to resolve the Q & A with prior official guidance (still positively referenced in the 10/12 instructions) that discusses the use of the EIN on the CTR, I think they have finally reached the level of simple, common sense. The EIN is about wage withholding; it's the individual's SSN they want.

As the example on the joint account talks about both deposits and withdrawals, treating them differently would require someone to provide a rationale for the decision; i.e. why wouldn't all owners be included on the form? The example muddies the water as it involves the unlikely circumstance of a third party making a deposit to a joint account. I'm not quite certain there would ever be a circumstance where a third party would make a withdrawal from a joint account. Pointing out the Q & A and asking the Helpline for an interpretation on a withdrawal that does not involve a third party should close the door on the discussion one way or the other.
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#1748946 - 10/12/12 04:47 PM Re: Free Webinar on FinCEN CTR & DOEP Elwood P. Dowd
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Ken, I was thinking about a withdrawal by one of the account owners.

If a deposit is made into a jointly owned account, you can easily assume that this was done on behalf of all owners and now they all have access to that money. But if one of the account owners makes a withdrawal, I really don't see how 100% of the time this is done on behalf of all other account owners as well. The other ones may not even know that the withdrawal was happening. So either the "conducted on behalf of" language does not accurately reflect what they want listed in that field or there needs to be a better explanation.

Sadly, even with the old forms, I have not been able to find a withdrawal example discussed by FinCEN, when addressing this part, they always use an example of a deposit.

As a sidenote, I could see listing the second person on the account as the "on behalf of" individual in the case of a custodial or Rep. Payee account - one person is withdrawing the money, but since the money belongs to another person, the withdrawal is done on their behalf.
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#1749004 - 10/12/12 06:19 PM Re: Free Webinar on FinCEN CTR & DOEP Compli(cated)
Elwood P. Dowd Offline
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I decided to take my own advice and called the Helpline. I cited the Q & A from the webinar as the preface. I reiterated that it was a joint account owned by A & B, but one of the owners, not a third party, made a withdrawal.

The answer was that both parties are presumed to benefit from a withdrawal just as both parties are presumed to benefit from a deposit. While I find the logic inescapable, particularly in the face of the Q & A, some may not.

No matter how accurately they are regurgitated here, statements attributed to the Helpline are not official. If this issue is relevant to your institution, you need to make your own call and put a note in the file...
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#1749199 - 10/15/12 01:56 PM Re: Free Webinar on FinCEN CTR & DOEP Elwood P. Dowd
John Burnett Offline
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I don't disagree at all with what Ken has said. However, this question is really a tired one, and FinCEN should have the temerity to address it officially with a ruling or guidance that the industry can rely on. Whether or not the industry then agrees with the logic, the fact will be that there would be something official to go by. That institutions should have to continue calling the Helpline on something so fundamental as this question defies logic.
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#1818628 - 05/30/13 03:19 PM Re: Free Webinar on FinCEN CTR & DOEP Elwood P. Dowd
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Your wish came true, John. The new FAQ's address this issue and the ruling is:

24. How do I properly complete Part I on the FinCEN CTR for withdrawals from a joint account? What amounts do we show in Item 22 for each Part I? For example, John and Jane Smith have a joint account together. During one business day, John Smith withdrew $12,000 from the account.

Since John Smith made a withdrawal from the joint account in excess of $10,000, then the financial institution would list Jane Smith’s information only if it has knowledge that the transaction was also being conducted on her behalf. If the financial institution does not have knowledge that the withdrawal was conducted on behalf of Jane Smith, then it would neither be required to nor prohibited from listing Jane Smith in a second Part I.

Therefore, if the financial institution does not have knowledge that the withdrawal was conducted on behalf of Jane Smith, the financial institution would complete a Part I on John Smith. For Item 2 of Part I, the financial institution would check 2a “Person conducting transaction on own behalf” and complete the applicable information for John Smith. Item 22 for Part I on John Smith would be completed by entering $12,000 and providing the account number affected.

However, if the financial institution does have knowledge the withdrawal was completed on behalf of both John Smith and Jane Smith, the financial institution must complete two Part Is. In completing a Part I on John Smith, the financial institution would check 2a “Person conducting transaction on own behalf” and complete the applicable information for John Smith. In completing a Part I on Jane Smith, the financial institution would check 2c “Person on whose behalf transaction was conducted” and complete the applicable information for Jane Smith. Item 22 for each Part I would be completed similarly by entering $12,000 and providing the account number affected.

http://www.fincen.gov/whatsnew/html/ctr_faqs.html
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#1818676 - 05/30/13 04:08 PM Re: Free Webinar on FinCEN CTR & DOEP Compli(cated)
Elwood P. Dowd Offline
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I honestly thought they had already answered it, just not clearly enough so people who did not want to list all parties could not quibble over it. Now, banks that want to implement a policy where they automatically list all parties may do so:

If the financial institution does not have knowledge that the withdrawal was conducted on behalf of Jane Smith, then it would neither be required to nor prohibited from listing Jane Smith in a second Part I.

Banks choosing not to automatically list all parties will repeatedly have the opportunity to discuss with examiners whether the other party was there when the withdrawal was made, etc. Not an opportunity I would relish.

It's been a while since King Solomon crossed my mind; they handled it just fine.
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#1818684 - 05/30/13 04:15 PM Re: Free Webinar on FinCEN CTR & DOEP Elwood P. Dowd
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I agree with you there, I am one of those people who does not want to list all parties but did not feel that the existing written guidance would back me up in the face of examiners.

Now, it seems that the issue is whether the transaction was conducted on behalf of the joint owner, not whether they were there. And the answer to that would be: I do not have knowledge that the transaction was conducted on the joint owner's behalf.
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#1818690 - 05/30/13 04:23 PM Re: Free Webinar on FinCEN CTR & DOEP Compli(cated)
Elwood P. Dowd Offline
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Quote:
I do not have knowledge that the transaction was conducted on the joint owner's behalf.


But did you ask? wink
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#1818697 - 05/30/13 04:29 PM Re: Free Webinar on FinCEN CTR & DOEP Elwood P. Dowd
devsfan Offline
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Isn't it much easier to always list all parties on the CTR? No questions asked and answers documented for possible review at the next audit or examination.

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#1818732 - 05/30/13 05:20 PM Re: Free Webinar on FinCEN CTR & DOEP Elwood P. Dowd
John Burnett Offline
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It's easier if you have the requisite information. If you don't (pre-CIP account, perhaps?), asking the present joint owner about the absent joint owner might be a challenge for some of your bank's personnel.
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#1818746 - 05/30/13 05:46 PM Re: Free Webinar on FinCEN CTR & DOEP John Burnett
Elwood P. Dowd Offline
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John, I don't believe a bank would be required to get "missing" information on joint owners who are not present just to file a CTR, would it?
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#1818824 - 05/30/13 07:12 PM Re: Free Webinar on FinCEN CTR & DOEP Elwood P. Dowd
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Based on the rest of the FAQ's (and even older guidance) it would not. In that case, though, it is just more work to add the person to the CTR and not realy transmit any useful information to FinCEN anyway.
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#1818837 - 05/30/13 07:25 PM Re: Free Webinar on FinCEN CTR & DOEP Elwood P. Dowd
John Burnett Offline
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You're both right, and of course you mitigate the risk of an examiner challenge if you do include all joint owners on any reportable withdrawal.
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