Structuring: A Tax Crime
One of the most frequent criminal charges our firm encounters is the illegal structuring of cash transactions to evade the IRS reporting requirements of Section 6050I. Usually the taxpayers who break this law are not engaged in money laundering, the trafficking of drugs or persons or any other illegal activity. Most of our clients who are charged with a violation of 31 U.S.C 5324 erroneously believe that this fact will absolve them of any wrongdoing.
They are sadly mistaken.
If you structure transactions to avoid the $10,000.00 cash reporting requirement, you are committing a felony even if you used the money to end world world hunger or solve global warming.
In short, IRC Section 6050I requires that any person engaged in a trade or business that receives cash in excess of $10,000 in one transaction, or two or more related transactions, must file Form 8300 (PDF) within 15 days of receipt of the reportable cash. A copy of each filed Form 8300 must be retained for five years by the business.
The provisions of this statute render the intentional arrangement (called “structuring”) of deposits or payments for the purpose of evading the obligation of reporting those deposits or payments to the IRS a felony punishable as follows:
(1) In general.— Whoever violates this section shall be fined in accordance with title 18, United States Code, imprisoned for not more than 5 years, or both.
(2) Enhanced penalty for aggravated cases.— Whoever violates this section while violating another law of the United States or as part of a pattern of any illegal activity involving more than $100,000 in a 12-month period shall be fined twice the amount provided in subsection (b) (3) or (c)(3) (as the case may be) of section 3571 of title 18, United States Code, imprisoned for not more than 10 years, or both.
Word to the Wise: Don’t get too smart. IRS Special Agents know all the ways people attempt to structure transactions to avoid the reporting requirements. You will eventually be caught. When you are caught the Federal government will prosecute you to the fullest extent of the law.