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7 Answers

Will the IRS be notified if I deposit a large cash sum without claiming it on my taxes?

Asked by: epondel 7965 views YA Discussion

Say I have $ 20,000 in one account (and I have paid taxes on that amount) and then all the sudden I deposit like $ 15,000 untaxed (such as self earned craigslist/ebay money I have made) will they be notified or no? Is it best to put it in a safety deposit box or what?

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  • how much money can you deposit without the irs being notified

7 Answers

  1. MadMan on Mar 22, 2012 Reply

    All large cash deposits are notified to the Department of the Treasury.

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  2. Rob on Mar 22, 2012 Reply

    any deposit over 9999 is recorded with IRS.
    u will get more than a tax bill on it.
    make a number of small deposits over a period of time 1-3 months.

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  3. Bash Limpbutt's Oozing Cyst© on Mar 22, 2012 Reply

    All single cash transactions of $ 10k or more, or a series of smaller transactions that add up to $ 10k or more over a short period of time, are reported to the US Treasury on a Currency (or Cash) Transaction Report. That’s filed automatically by recipient of the cash, whether it’s a bank or a business, such as a car dealership.

    What’s best? Declare the income and pay the taxes of course. That way you never have to look over your shoulder wondering when the IRS will be coming for you. Payments that pass through certain payment processors (PayPal, eBay, credit card processors, etc.) are reported by the processor and you may receive a Form 1099-K for those payments.

    Aside from fulfilling your legal obligation to declare all income and pay all taxes, shorting your income today to save a few tax dollars can impact you later in life when you apply for Social Security Retirement or become disabled and apply for Social Security Disability. Your benefits are based upon your lifetime earnings so any earnings that are not declared will adversely affect your benefits, sometimes catastrophically so.

    BTW, a safety deposit box isn’t as safe as you think. If it’s broken into and the contents are stolen, you have to file a claim either with the bank or your insurance company to be reimbursed. The IRS is always standing by to review those claims, so you are left with a quandary — lose all of the money forever or reveal that you’ve been a tax cheat for many years.

    Additionally, when you die the box will be sealed by the bank as soon as they learn of your demise and won’t be opened until the IRS says it can be opened. Needless to say, there is an IRS representative there to inventory the contents before they are released to the executor of your estate.

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  4. A Hunch on Mar 22, 2012 Reply

    It’s best to put it in a bank and pay proper taxes on it. If you don’t pay taxes, you can’t purchase things.

    If you sell things on ebay or craigslist like it’s a garage sale (selling your own used items for less than you paid for them) it is not taxable income. Selling items for a profit make it taxable income If you purchase things to resale, you can’t write of the purchase price if you don’t claim the income.

    Being a tax cheat makes you end up in jail = ask Wesley Snipes how much he is enjoying it.

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  5. tro on Mar 22, 2012 Reply

    money earned on ebay or craigs list is not NON TAXABLE, this is self employment income and is reported on sch C and SE as well
    banks are r’qd to report transactions of $ 10000
    and ebay will likely issue you a 1099 K on this income

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  6. DesMoinesPilot on Mar 22, 2012 Reply

    Anything over $ 10k will be reported. Structuring the transactions into smaller amounts may work, but they are supposed to report those if they recognize them so don’t do it. Look up “smurfing” if you are tempted.

    Paypal has already sent 1099-K’s so if you haven’t gotten one you are probably safe in that department.

    Do not put the money in a safe deposit box; that would be unsafe and rather silly. Here’s what I would do:

    -Prepay all of your utilities for the year in cash if you are not planning on moving
    -Pay your rent/mortgage with it
    -Buy some prepaid credit cards and hold onto them
    -With whatever’s left you can buy money orders and either pay off any debt you may have or make deposits into an IRA or whatever. Money orders are not subject to CTRs. Cashiers checks are, so stay away from those.
    -Or open up NON interest bearing accounts at several different banks and deposit the cash directly

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  7. K L on Jul 29, 2012 Reply

    I have a question. My father left me over 100k in Swiss franks. “My father is now dead” the franks were in a safe not in a trust, bank or ira. Its always been in a safe in our basement. I cashed them in the other day at a foreign currency exchange place and they wrote me a check. In return I had to deposit it into my bank. I know the bank is going to report it to the IRS but will I have to pay taxes on it? If so, what percentage will I have to pay? I really don’t think I should have to pay anything since its been in my fathers safe for years. Thanks for the help!



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