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CTRs for Individual Depositing to Exempt Accounts

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Question: 
The bank has a customer with two separate business accounts. One is a sole proprietorship mini-mart; the other is a corporation with a separate EIN. He frequently deposits money into these accounts, which when aggregated together totals over $10,000. However, when treated separately, they do not total over $10K. His business accounts are exempt. Should he remain an exempt customer when he rarely deposits over $10K in each account? Should we file a CTR on him (personally) for the cash transactions over $10K, even though they are for his business?
Answer: 

Even though these businesses are undoubtedly controlled by the same individual, they appear to be two separate entities. I don't advocate aggregating their activity when weighing exemptions. If, after separating their activity, one or the other does large cash transactions (LCTs - over $10,000) less than 8 times a year, I recommend canceling the exemption for that customer (or for both, if that's what the analysis suggests).

[As an aside, you might also consider canceling the mini-mart's exemption if it's involved in any sort of non-depository financial institution transactions.]

Let's continue the discussion assuming that neither customer is exempt.

If the individual brings in over $10,000 for deposit to the accounts (allocated between them in any manner), you should file a CTR. The individual is one customer (the sole proprietorship); the corporation is the other. File the CTR with the individual listed in section A on the front (including his DBA name in item 5), using his SSN and either his home address or the street address for the mini-mart. Record information about the corporation in section A on the reverse. Check the multiple persons and multiple transactions boxes in item 1 on the form.

In Section B, check "conducted on own behalf" to indicate the individual did the combined transactions. Then list both account numbers in Part II.

Now, let's assume that the corporation is still exempt, but the sole proprietorship is not.

If the individual brings in over $10,000 for deposit to the two accounts, subtract and ignore the amount being deposited to the exempt account. Only if there's still over $10,000 to be deposited to the sole proprietorship do you file a CTR.

If both accounts remain exempt (which I doubt will happen based on your comments), you don't file a CTR at all unless the individual does more than $10,000 in cash transactions beyond deposits and withdrawals in the exempt accounts.

First published on BankersOnline.com 2/7/05

First published on 02/07/2005

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