"FinCEN has announced final rules amending its 31 CFR Chapter X regulations to facilitate FinCEN’s access to CTRs filed by clerks of courts and to conform qualifications for CTR-exempt payroll customers to those applicable to exempt bank transaction account customers."

I understand that CTRs are exempted for business customers who "frequently" withdraw cash for payroll purpose. However, I could not find a clear guidance in regards to the aggregate level (e.g. at account or TIN level).

For example, if a signer of two business accounts (with different EIN but common ownership) "frequently" withdraws $10,500 and $9,000 from account A and B, respectively, is account A only exempted or can both be exempted due to the common ownership?

Thanks for your input.

Common ownership is not by itself sufficient "glue" to justify combining the cash activity of two legally-separate entities for CTR purposes (see FinCEN Guidance FIN-2012-G001 http://www.fincen.gov/statutes_regs/guidance/html/FIN-2012-G001.html. It stands to reason that you'd apply the same concept to aggregating transactions for determining eligibility for a Phase II exemption.

If the two businesses are operated independently of one another, the common ownership should not be used to exempt account B.

But, if the businesses are actually sole proprietorships owned by the same individual (but they use separate EINs for some reason), you should aggregate because all of the transactions are actually on behalf of the individual owner.

John, you're right on that subject matter. I guess I wasn't clear on what I'm looking for. Regardless of the number of EINs affected, if that same one person conducts multiple withdrawals from two business accounts (different EINs and independent from each other) and the aggregate amount exceeds the threshold, a CTR must be filed.

Now, let's assume that the purpose of the "frequent" withdrawals is to pay its employees in cash. Since the transactions were conducted by one individual (regardless of how many EINs were affected), can this particular activity be exempted under the Phase II ruling? And what if only one of the two accounts had more than $10K withdrawn? My apologies for the confusion..

Correct on point one - a CTR would be needed for the scenario in the first paragraph.

Exemptions are never based upon the person conducting the transactions because they relate to the business and its activity, not to the runners, employees, agents, etc. If three businesses frequently use one conductor to withdraw cash for payroll purposes, with Business X frequently withdrawing $15,000, business Y frequently withdrawing $8,000 but never more than $10,000 and business Z frequently withdrawing $7,500 but never more than $10,000, only business X could be considered for an exemption.

Am I understanding this correctly that I could file an exemption for multiple businesses in the following example?

We have 3 separate LLC's with common ownership, different EIN's, different locations, and money is occasionally comingled between accounts.

I understand that we should be aggregating the transactions for all three businesses for CTRs according to the recent guidance since money is comingled, but can we also exempt them under the same concept? No individual business exceeds $10,000 on its own, but aggregated they do.

Commingling of funds is one symptom of a failure to operate the businesses independently. FinCEN doesn't say where the bright line is separating independent operation from non-independent operation. You have to make that determination.

I don't know how you can file a DOEP on three "separate" entities, so I question whether you can or should aggregate these businesses' activity to determine whether an exemption is warranted. I'd recommend sticking to an individual business-by-business qualification procedure, without aggregating among the businesses. That's my gut talking; I can't point to "holy writ" from FinCEN.

There was a Holy writ regarding an exemption for multiple businesses under the old exemption process, but none under this one.

No.

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