Avoiding Unintentional Structuring of Cash Transactions

Structuring is a strategy used by businesses that are attempting to evade taxes by hiding large amounts of cash. With structuring, companies deposit smaller amounts of cash to avoid automatic reporting by the bank to the government.

When you make a cash deposit of more than $10,000, the bank is required to fill out a form known as a Cash Transaction Report, or CTR. Some businesses try to get around this requirement by making several smaller deposits at the bank over a series of several days, or by going to many different banks in the same day or over several days.

Structuring is also known as "smurfing" in the industry. If you are caught doing it, you can face serious fines and penalties as the practice is illegal, no matter how you attempt it.

Even if you think that you are being clever by depositing, for example, $5,000 over three days, the bank may still file an suspicious activity report, also known as a SAR. Bank officials are trained to recognize structuring, and they will file this report if they see signs of it. The report doesn’t accuse you of a crime, but it does raise a red flag. If you get enough of those reports filed against you, the authorities may investigate you. If you are attempting cash structuring, you may be discovered.

Of course, if you are making smaller cash deposits, it doesn’t mean that you are trying to defraud the government or engage in structuring. It could just mean that your business deals in smaller sums of money that you have to deposit. For example, you might run a small retail shop that has daily cash deposits.

The best thing you can do to avoid the suspicion of illegal activity is to just deposit the money all at once, whether it is a small amount from your daily sales or it is a large amount from a huge sale. Always file the appropriate forms. For example, if you have a large financial transaction in which your business receives more than $10,000 from a customer, you will have to report it on a Form 8300.

Failure to file the appropriate forms could result in a criminal investigation and the seizure of assets.

If you are wrongly accused of structuring, working with an experienced tax lawyer can help you resolve the case and get your assets back as quickly as possible. Silver Law PLC in Arizona has years of experience working with businesses accused of structuring, and we have counseled numerous businesses on the laws surrounding cash reporting to help them avoid penalties. Call us today to talk about your legal responsibilities or to get experienced representation to defend the charges against you. A Phoenix tax lawyer from our team is ready to build a strong case for you.

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Silver Law, PLC

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Scottsdale, Arizona 85254

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