« iepriekšējāTurpināt »
Mr. WOLFE. It does not do it often, but as I recall it is spelled out in the regulations when they do do it. If it is above a certain amount, they do refer it to us, and, of course, as it did in this case, it appeared to be one we needed to look into.
Mr. DRINAN. What is the statute that gives them that power, though? That seems to erode everything that I have been reading, everything we have been talking about.
Mr. WOLFE. I think it is the 1970 Act, Mr. Congressman, that we were discussing that give them—
Mr. DRINAN. The Bank Secrecy Act?
Mr. WOLFE. We will check it out and furnish it for the record. [The material referred to follows:]
REPORTING CURRENCY TRANSACTIONS
United States v. Bisceglia, 95 S.Ct. 915 (1975), concerned two deposits in November 1970 of $20,000 each in old $100 bills by a bank in Kentucky to the Cincinnati Branch of the Federal Reserve Bank of Cleveland, after which the facts were reported to the IRS. Regulations in 31 C.F.R. Part 102 in effect in 1970 provided for reporting by banks to Federal Reserve Banks of such unusual currency transactions on Form TCR-1.
That procedure was no longer required after June 30, 1972 and was then superseded by 31 C.F.R. Part 103 now providing for reports by banks directly to the IRS (not through the Federal Reserve Banks) on Form 4789, Currency Transaction Report (attached with instructions on the back). A copy of 31 C.F.R. 103.22 is also attached. These regulations are authorized by sections 221-223 of Title II-Reports of Currency and Foreign Transactions, P.L. 91-508, codified in 31 U.S.C. 1081-1083.
Domestic currency transaction reports by banks to the IRS are only required for transactions in currency of more than $10,000. Exceptions are provided for interbank transfers and transactions between a bank and established customers maintaining a deposit relationship, in amounts which the bank may reasonably conclude do not exceed amounts commensurate with the customary conduct of the customer's business.
Secretary. The Secretary of the Treasury or any person duly authorized by the Secretary to perform the function mentioned.
Transaction in currency. A transaction involving the physical transfer of currency from one person to another. A transaction which is a transfer of funds by means of bank check, bank draft, wire transfer, or other written order, and which does not include the physical transfer of currency is not a transaction in currency within the meaning of this part.
United States. The various States, the District of Columbia, the Commonwealth of Puerto Rico, and the territories and possessions of the United States. [37 F.R. 6912, Apr. 5, 1972, as amended at 38 F.R. 2175, Jan. 1973]
SUBPART B-REPORTS REQUIRED TO BE MADE
§ 103. 21 Determination by the Secretary.
The Secretary hereby determines that the reports required by this subpart have a high degree of usefulness in criminal, tax, or regulatory investigations or proceedings.
§ 103.22 Reports of currency transactions.
(a) Each financial institution shall file a report of each deposit, withdrawal, exchange of currency or other payment or transfer, by, through, or to such financial institution, which involves a transaction in currency of more than $10,000.1
(b) Except as otherwise directed in writing by the Secretary, this section shall not (1) require reports of transactions with Federal Reserve Banks or Federal Home Loan Banks; (2) require reports of transactions solely with, or originated by, financial institutions or foreign banks; or (3) require a bank to report transactions with an established customer maintaining a deposit relation
1 Forms filed as part of the original document.
ship with the bank, in amounts which the bank may reasonably conclude do not exceed amounts commensurate with the customary conduct of the business, industry or profession of the customer concerned. A report listing such customers who engage in transactions which are not reported because of the exemption contained in this paragraph shall be made to the Secretary upon demand therefor made by him.
§ 103.23 Reports of transportation of currency or monetary instruments.
(a) Each person who physically transports, mails, or ships, or causes to be physically transported, mailed, or shipped, currency or other monetary instruments in an aggregate amount exceeding $5,000 on any one occasion from the United States to any place outside the United States, or into the United States from any place outside the United States, shall make a report thereof. A person is deemed to have caused such transportation, mailing or shipping when he aids, abets, counsels, commands, procures, or requests it to be done by a financial institution or any other person. A transfer of funds through normal banking procedures which does not involve the physical transportation of currency or monetary instruments is not required to be reported by this section.
(b) Each person who receives in the U.S. currency or other monetary instruments in an aggregate amount exceeding $5.000 on any one occasion which have been transported, mailed, or shipped to such person from any place outside the United States with respect to which a report has not been filed under paragraph (a) of this section, whether or not required to be filed thereunder, shall make a report thereof, stating the amount, the date of receipt, the form of monetary instruments, and the person from whom received.
(c) This section shall not require reports by (1) a Federal Reserve bank, (2) a bank, a foreign bank, or a broker or dealer in securities, in respect to currency or other monetary instruments mailed or shipped through the postal service or by common carrier, (3) a commercial bank or trust company organized under the laws of any State or of the United States with respect to overland shipments of currency or monetary instruments shipped to or received from an established customer maintaining a deposit relationship with the bank, in amounts which the bank may reasonably conclude do not exceed amounts commensurate with the customary conduct of the business, industry or profession of the customer concerned, (4) a person who is not a citizen or resident of the United States in respect to currency or other monetary instruments mailed or shipped from abroad to a bank or broker.
(Replaces TCR-1) Department of the Treasury
Internal Revenue Service
Currency Transaction Report
File a separate report for each transaction
Identity of person who conducted this transaction with the financial institution
Name (Last, first and middle initial)
Number and street
City or town, State and ZIP code
Social security number
Business, occupation or profession
Person or organization for whom this transaction was completed (Complete only if different than Part I)
Number and street
City or town, State and ZIP code
Business, occupation or profession
Description of transaction (If additional space is needed, attach a separate schedule)
1. Nature of transaction (check the applicable boxes)
☐ Security purchase (specify)
2. Total amount of currency transaction 3. Amount in denominations of $100 or (in U.S. dollars)
5. If other than U.S. currency is involved, please furnish the following information: Currency name
4. Date of transaction (Month, day and year)
Total amount of foreign currency
6. If a check was involved in this transaction, please furnish the following information (See instructions): Date and amount of check
This report is required by Treasury Department regulations (31 Code of Federal Regulations 103).
Who Must File.-Beginning July 1, 1972, each financial institution (as described in these instructions) shall file a report of each deposit, withdrawal, exchange of currency or other payment or transfer, by, through, or to such financial institution, which involves a transaction in currency of more than $10,000.
Exceptions. Financial institutions are not required to file Form 4789 for transactions:
(1) with Federal Reserve Banks or Federal Home Loan Banks;
(2) solely with, or originated by, financial institutions or foreign banks; or
(3) between a bank and established customers maintaining a deposit relationship with the bank, in amounts which the bank may reasonably conclude do not exceed amounts commensurate with the customary conduct of the customer's business, industry or profession. However, upon request each bank shall submit a report listing those customers who engage in transactions which were not reported because of the exemption in (3).
When and Where to File.-This report shall be filed on or before the 45th day following the date of the transaction with the Internal Revenue Service Center, 11601 Roosevelt Boulevard, Philadelphia, Pennsylvania 19155. Forms may be ob tained from any Internal Revenue Service office.
Identifying Number.-Social security number or employer identification number if other than individual.
Identification Required.-Before any transaction is effected a financial institution shall verify and record the identity, and record the account number on its books or the social security or taxpayer identification number, if any, of a person with whom or for whose account such transaction is to be effected. Verification of identity for a customer of the financial institution depositing or withdrawing funds may be by reference to his account or other number on the books of the institution. Verification of identity in any other case may be by examination, for example, of a driver's license, passport, alien identification card, or other appropriate document normally acceptable as a means of identification.
Penalties. Civil and criminal penalties are provided for failure to file a report or to supply information, and for filing a false or fraudulent report. See sections 103.47 and 103.49 of the regulations.
Part (1) In the address block, enter the permanent address of the person conducting the transaction.
(2) In the social security block, enter the social security number of the person conducting the transaction. If the person has no number, write "None" in this block.
Part II.-(1) In the name block, individuals should enter their last name, first name and middle initial, if any, in that order. All others should enter their complete organization name.
(2) In the identifying number block, enter the social security number or employer identification number.
Part III, line 6.-This part should be completed only where a check is cashed or a bank check is purchased with currency.
Part IV. See instruction "Identification Required," above.
Part V.-Institutions may also enter in the name and address block other identifying information.
Definitions Bank. Each agent, agency, branch or office within the United States of a foreign bank and each agency, branch or office within the United States of any person doing business in one or more of the capacities listed below:
(1) a commercial bank or trust company organized under the laws of any state or of the United States; (2) a private bank;
(3) a savings and loan association or a building and loan association organized under the laws of any state or of the United States;
(4) an insured institution as defined in section 401 of the National Housing Act;
(5) a savings bank, industrial bank or other thrift institution;
(6) a credit union organized under the laws of any state or of the United States; and
(7) any other organization chartered under the banking laws of any state and subject to the supervision of the bank supervisory authorities of a state.
Currency. The coin and currency of the United States or of any other country, which circulate in and are customarily used and accepted as money in the country in which issued. It includes United States silver certificates, United States notes and Federal Reserve notes, but does not include bank checks or other negotiable instruments not customarily accepted as money.
Financial Institution.-Each agency, branch or office within the United States of any person doing business in one or more of the capacities listed below:
(1) a bank;
(2) a broker or dealer in securities, registered or required to be registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934; (3) a person who engages as a business in dealing in or exchanging currency as, for example, a dealer in foreign exchange or a person engaged primarily in the cashing of checks;
(4) a person who engages as a business in the issuing, selling or redeeming of travelers' checks, money orders, or similar instruments, except one who does so as a selling agent exclusively, or as an incidental part of another business;
(5) an operator of a credit card system which issues, or authorizes the issuance of, credit cards that may be used for the acquisition of monetary instruments, goods, or services outside the United States.
(6) a licensed transmitter of funds, or other person engaged in the business of transmitting funds abroad for others.
Person. An individual, a corporation, a partnership, a trust or estate, a joint stock company, an association, a syndicate, joint venture, or other unincorporated organization or group, and all entities cognizable as legal personalities.
Transaction in Currency.-A transaction involving the physical transfer of currency from one person to another. A transaction which is a transfer of funds by means of bank check, bank draft, wire transfer, or other written order, and which does not include the physical transfer of currency is not a transaction in currency within the meaning of this part.
Mr. ALEXANDER. These deposits were made in November of 1970. Mr. DRINAN. I have the facts. I just want to know. That seems to be a large loophole in anything related to privacy in banks if the Federal Reserve, the moment it gets the deposit, can just give this information. I could see where they could give it to the Treasury, that is quite relevant. But when they just hand it over to IRS, and this poor Mr. Doe had no knowledge whatsoever that he was being turned in to IRS
Mr. ALEXANDER. The bank may have notified Mr. Doe. We, of course, wanted to find out from the bank who Mr. Doe was to see whether these $40,000 in tattered old $100 bills had tax consequences.
Mr. DRINAN. A last question.
I have been intrigued as to whatever happened to Mr. Doe. Where did he get these decrepit $100 bills?
Mr. ALEXANDER. I share that interest, Father Drinan.
Mr. DRINAN. Thank you.
Mr. KASTENMEIER. The gentleman from California.
Mr. DANIELSON. I would like to state that I tend to like the suggestion contained in Mr. Railsback's of Illinois, comments of conceivably something like a simultaneous notification. The Supreme Court has volunteered and I presume correctly, that so long as these summonses can be enforced only through the courts, the taxpayer is not without remedy because he can always go to court.
I am also inclined to believe that that sort of reasoning, while technically correct, does not hit anywhere near home. I practiced law for a long time. If a citizen came in to me and wanted me to file a petition in the U.S. district court to enjoin the enforcement of that summons or some such thing, I am going to have to charge a pretty substantial fee. It is a lot of work. The average taxpayer just does not have that kind of money sitting around.
It is one of these things you have a right to do, but you do not have the money with which to do it. I think it is illusory in many instances. The simultaneous notification, though, would help.
One of you getlemen raised the point of a levy in the collection case. I question whether that is too much of a problem. You could hardly make a levy until you know against whom you are going to make it— there could be a few cases, the John Doe one-and until you know the
So I would say you are already armed with the essential information for the levy before you have to go to work and serve the summons, in most cases. I hope you folks will think about that. I am going to do a little thinking about it.
Lastly, on this keeping of these extensive records, which bothers me, perhaps we could have a change in the law to require some kind of a triggering act.
you people start a tax investigation, suppose your computer says this is a "diff" case, and we should investigate it, maybe you could then trigger the recordkeeping by notifying the bank. Maybe that is impracticable, but I want you to think, have your brain trust think along that line. It might help.
Next to the last, a suggestion-I know you have always referred to the criminal fraud portion of your operation as the intelligence