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#1783618 - 02/07/13 02:49 PM CTR On Behalf Of Question
Dani York, CRCM Offline
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Dani York, CRCM
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Posts: 3,663
TN
OK, so we can't do anything the easy way around here.....

I have a customer who cashed a check against his account for a reportable amount. The check was payable to cash and drawn on his personal account, BUT I know he is using the cash for his business. He is an accountant and giving his clients cash for their refunds.

Soooo, on the CTR would I just list him on his own behalf? Or would I also list his business as conducted on behalf of?

crazy crazy crazy
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#1783644 - 02/07/13 03:11 PM Re: CTR On Behalf Of Question Dani York, CRCM
ComplianceGurl, CRCM Offline
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If he was by himself when cashing the check then he was the only one that benefitted from it. It would be no different from a grandparent doing the same thing "knowing" that she was going to give it to her grandkids. You wouldn't include the grandkids on the CTR.

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#1783647 - 02/07/13 03:19 PM Re: CTR On Behalf Of Question Dani York, CRCM
Elwood P. Dowd Offline
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I'm assuming the business is an entity. As it's unlikely the business would ever join him in the lobby, I don't think its absence would be the deciding factor. I find it a bit confusing that he would use personal funds to do this, but if I knew that's what he was doing I would include the business on the CTR.

He's not cashing checks, he's just giving them the cash? Unless he's the most trusting guy in Tennessee, he's probably going to have their refunds sent to one of his accounts. You need to chat about that. As noted in another thread, that's not what the IRS wants and he should know that. It may not be what you want either...
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#1783651 - 02/07/13 03:26 PM Re: CTR On Behalf Of Question Dani York, CRCM
Dani York, CRCM Offline
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Dani York, CRCM
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Posts: 3,663
TN
Thanks.

Normally, I would treat the cashed check as ComplianceGurl suggests; however, the customer had approached us a week ago about this cash. It was so large we had to special order it! So, I'm not sure I can apply my normal logic to this one.

Yes Ken, the business is an entity (LLC), though he is the only member. I'm still trying to get info on how the process works as far as straight cash to the client or cashing checks issued from his tax prep software. The refunds do get deposited into the business account from the software company....it is a very complex and strange set-up.....and I DO NOT feel comfortable with it AT ALL!!!! Too much to discuss in a public forum.

Another interesting tidbit of info, the account the cash came out of was funded by a wire transfer from one of his personal investment accounts.
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I can't herd the cats anymore, so I just set up the electric fences and let them fry when they stray out of bounds.

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#1783664 - 02/07/13 03:43 PM Re: CTR On Behalf Of Question Dani York, CRCM
ComplianceGurl, CRCM Offline
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...and the plot thickens. Good luck Dani!

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#1783705 - 02/07/13 04:13 PM Re: CTR On Behalf Of Question Dani York, CRCM
Dani York, CRCM Offline
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Dani York, CRCM
Joined: Apr 2005
Posts: 3,663
TN
Well, I was still waffling on what to do, so I called FinCEN, and they told me to only list the human customer. They explained that since the business entity was not tied to the account the cash came out of, the entity would not be listed on the CTR at all.

Still not sure that I agree with that, BUT I've documented what they said and will move one.

Thanks to you both!
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I can't herd the cats anymore, so I just set up the electric fences and let them fry when they stray out of bounds.

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#1784044 - 02/08/13 11:17 AM Re: CTR On Behalf Of Question Dani York, CRCM
Elwood P. Dowd Offline
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You need to do as you've done, document and follow FinCEN's advice on how to complete the form. However, I'm reminded that they are not final because they are right, they are right because they are final.

I cannot rationalize how the bank should not identify the person on whose behalf the transaction is being conducted when it knows that to a certainty based on statements from the person condcuting the transaction. The advice you were given is inconsistent with that they have given in other less clear cut situations.
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#1785188 - 02/12/13 05:43 PM Re: CTR On Behalf Of Question Dani York, CRCM
Dani York, CRCM Offline
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Dani York, CRCM
Joined: Apr 2005
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TN
Just to update....

My customer came in again to get more cash. This time it was funded by a transfer from the business account to the personal account, then the cash was withdrawn. Because of teh new funding source, I called FinCEN again and asked teh same question....do I list the business as a person on behalf of?

This week, they told me yes. So I asked to clarify that it was because of the funding source and explained last weeks scenario. They had to get a supervisor/subject matter expert involved, who then told me that I should have listed the business as a person on behalf of last week becasue the bank had knowledge. He went on to explain that the bank should not speculate but that if the conductor tells us that the money is on behalf of someone else, that would constitute knowledge. In our case, the bank had knowledge.

Of course I documented the conversation and am off to file an amendment to last weeks CTR. crazy
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I can't herd the cats anymore, so I just set up the electric fences and let them fry when they stray out of bounds.

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#1785455 - 02/13/13 01:00 PM Re: CTR On Behalf Of Question Dani York, CRCM
Elwood P. Dowd Offline
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Elwood P. Dowd
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Next to Harvey
Thank you. My faith is restored, somewhat. It should not take two calls to get the right answer.
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