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Following the rules when moving money into the United States

| Apr 30, 2021 | Blog |

Getting large amounts of money into the United States is not always easy or cheap. However, it is often necessary to do so in order for foreign nationals to complete commercial real estate transactions. 

Anything even remotely unconventional could garner unwanted attention from various government bodies, most notably the IRS. This article will look at why reporting and accounting matter so much in the USA. The example will be a cash transfer reporting requirement, but there are many other rules that apply to specific situations. 

Why tax rules matter in the USA

As per the service’s official reports, the IRS employs somewhere in the region of 75,000 full-time employees. It is one of the largest government entities in the United States, part of the Department of the Treasury and connected to other agencies, such as the Department of Defense. 

In short, it is a large organization with ample resources. It commits significant effort to detecting and preventing financial crimes. These crimes typically manifest as patterns of improper reporting procedure regarding income or transactions. 

Why the IRS tracks large payments

The IRS tracks cash payments over $10,000 to help detect and prevent money laundering. Real estate agencies, law offices and many other high-transaction-value businesses often have to file IRS Form 8300 to report these types of transfers. 

It bears mentioning that reporting for Form 8300 comes from cash transactions only. Some common methods of transferring value are not cash, even if they deal with cash balances — wire transfers, for example, are not cash according to the IRS. 

This Form 8300 requirement is among the simplest and most straightforward accountability procedures that the IRS mandates. More complex financial and business actions might require additional reporting. Furthermore, financial institutions might have to report transactions independent of their clients. It all adds up to a situation in which the IRS has a good amount of oversight over nearly any large transfer.