This is regarding a payday lending company. At times we need to transfer cash from one location to another where there might be a cash shortage. The stores are all under the same TIN/EIN. The IRS is claiming that a CTR must be filed by each location for cash in and cash out if over $10k.

Thoughts?

When the bank ships cash from our central cash vault to a branch there is no CTR. Why would there be one here?

I agree with the IRS?

Are you a bank employee or an employee of the payday lending company?

Employee of the payday loan company. These are transfers between on store in the company to another. Say a store in one town is low on cash, and another store in another town has extra on hand, some one will transport the cash to the store in need. It is all recorded in the accounting software. Banks have no invovlement in this.

I know a bank would not have to report movement between branches but in your case, as a NBFI they may be considering this differently.

As a Bank, if you were our customer and physically moved the money from one location to another, we'd never know it unless you physically cashed a check from one 'store account' and left the bank with it, then came back and deposited the cash to another 'store account'.

I'm not familiar with NBFI reporting requirements. Do you use Form 104 for CTR reporting or another form? Do the instructions tell you anything about transfers?

We do use form 104 CTR. I looked at the instructions on form 104, but since this is not a customer transaction, just internal, to me it does not seem to apply.

I guess since you've gotten an answer from IRS that says you must file a CTR, unless you can find something that says otherwise you'll have to comply. I'd probably go back to them and ask why financial institution would not have to file when transferring between 'branches', yet you as a 'non-bank financial institution' is required to. It seems to me that if you have to file the same form and follow the same instructions, you as a NBFI would be no different than me as a FI.

Just my two cents worth.

I know from past experience that one large payday loan corporation uses different TINs for different locations. If one location using TIN "A" transfers money to another location using TIN "B" there has been an exchange of funds from one entity to another, so I could see how a CTR would be needed since the locations are not identical.

In any case if the IRS says fill it out, fill it out. I don't ever recall hearing about a pleasant IRS audit.

I think like so many .gov examiners, I think some just make a lot up as they go. I have had 2.5 years of IRS audits, about 30-40 in all and nothing yet. They sometimes claim violations, but nothing has stuck. I have had things made up by them as BSA regs. I have had one examiner give us the A-okay in one location, and another try to tear into us. Drives me crazy.

I could see it if we had different TINs, but we don't.

I don't think that is correct.
I would call again and try and get another opinion or a more senior person to respond to you.

The definition of "transaction" in 103.11 says: "For purposes of Sec. 103.22, and other provisions of this part relating solely to the report required by that section, the term ``transaction in currency'' shall mean a transaction involving the physical transfer of currency from one person to another."

If your company is just moving money between locations, ask them who the other "person" is that's involved.