From Making Laws to Breaking Laws: Ex-speaker of the House Sent to Prison for Structuring Bank Withdrawals August 4, 2016

Dennis Hastert, Speaker of the United States House of Representatives from 1999 to 2007, pleaded guilty to federal criminal charges of structuring financial transactions to conceal payments to an individual whom he had abused more than three decades earlier, when Hastert worked as a high school wrestling coach. On June 22, 2016, Mr. Hastert began serving a 15-month sentence for the “structuring” charge (a felony). 
 


What is structuring? In a series of transactions, Mr. Hastert withdrew cash from his bank accounts in amounts of less than $10,000 each, hoping to avoid bank currency-reporting requirements. Hastert made a total of 106 withdrawals in increments of less than $10,000, totaling $952,000. The bank voluntarily filed Forms 8300 reporting the withdrawals as suspicious, thus, beginning a federal investigation into Mr. Hastert’s actions. 



• Tax practitioner point. Because the Form 8300 is not required in these situations, but is voluntary, there is no requirement to send a statement to the payor. It’s a surprise when the fed show up at Mr. Hastert’s (or your client’s) front door. 


Report of Cash Payments Over $10,000 Received in a Trade or Business (Form 8300 and Reporting Cash Payments of Over $10,000).  Generally, any person in a trade or business who receives more than $10,000 in cash in a single transaction or related transactions must complete a Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business. Form 8300 is a joint form issued by the IRS and the Financial Crimes Enforcement Network (FinCEN) and is used by the government to track individuals that evade taxes and those who profit from criminal activities. 
 


Reporting suspicious transactions. There may be situations where the business is suspicious about a transaction. The business may report suspicious transactions by checking the “suspicious transaction” box (box 1b) on the top line of Form 8300. A transaction is suspicious if: 

• It appears that a person is trying to prevent a business from filing Form 8300;
• It appears that a person is trying to cause a business to file a false or incomplete Form 8300; or
• There is a sign of possible illegal activity. 

Form 8300 due date. File Form 8300 by the 15th day after the date the cash transaction occurs. File Form 8300 electronically or by mailing the form to the IRS at: Detroit Computing Center, P.O. Box 32621, Detroit, Michigan 48232. In addition to filing Form 8300 with the IRS, companies need to furnish a written statement to each person whose name is required to be included in the Form 8300 by January 31 of the year following the transaction. This statement must include the name, address, contact person, and telephone number of the business filing Form 8300, the aggregate amount of reportable cash the business was required to report to the IRS from the person receiving the statement, and that the business provided this information to the IRS. 
 


More about the why, when and where for filing the Form 8300.  IRS Form 8300 Reference Guide is now available on IRS.gov. This guide’s purpose is to educate and assist U.S. persons who have the obligation to file Form and for tax professionals who prepare and file Form 8300 on behalf of their clients. 

© 2016 Vern Hoven & Sharon Kreider