[Code of Federal Regulations]

[Title 31, Volume 1]

[Revised as of July 1, 2005]

From the U.S. Government Printing Office via GPO Access

[CITE: 31CFR103.30]



[Page 394-399]

 

                  TITLE 31--MONEY AND FINANCE: TREASURY

 

                       DEPARTMENT OF THE TREASURY

 

PART 103_FINANCIAL RECORDKEEPING AND REPORTING OF CURRENCY AND FOREIGN 

TRANSACTIONS--Table of Contents

 

                  Subpart B_Reports Required To Be Made

 

Sec. 103.30  Reports relating to currency in excess of $10,000 received 

in a trade or business.



    (a) Reporting requirement--(1) Reportable transactions--(i) In 

general. Any person (solely for purposes of section 5331 of title 31, 

United States Code and this section, ``person'' shall have the same 

meaning as under 26 U.S.C. 7701 (a)(1)) who, in the course of a trade or 

business in which such person is engaged, receives currency in excess of 

$10,000 in 1 transaction (or 2 or more related transactions) shall, 

except as otherwise provided, make a report of information with respect 

to the receipt of currency. This section does not apply to amounts 

received in a transaction reported under 31 U.S.C. 5313 and Sec. 

103.22.

    (ii) Certain financial transactions. Section 6050I of title 26 of 

the United States Code requires persons to report information about 

financial transactions to the IRS, and 31 U.S.C. 5331 requires persons 

to report similar information about certain transactions to the 

Financial Crimes Enforcement Network. This information shall be reported 

on the same form as prescribed by the Secretary.

    (2) Currency received for the account of another. Currency in excess 

of $10,000 received by a person for the account of another must be 

reported under this section. Thus, for example, a person who collects 

delinquent accounts receivable for an automobile dealer must report with 

respect to the receipt of currency in excess of $10,000 from the 

collection of a particular account even though the proceeds of the 

collection are credited to the account of the automobile dealer (i.e., 

where the rights to the proceeds from the account are retained by the 

automobile dealer and the collection is made on a fee-for-service 

basis).

    (3) Currency received by agents--(i) General rule. Except as 

provided in paragraph (a)(3)(ii) of this section, a person who in the 

course of a trade or business acts as an agent (or in some other similar 

capacity) and receives currency in excess of $10,000 from a principal 

must report the receipt of currency under this section.

    (ii) Exception. An agent who receives currency from a principal and 

uses all of the currency within 15 days in a currency transaction (the 

``second currency transaction'') which is reportable under section 5312 

of title 31, or 31 U.S.C. 5331 and this section, and who discloses the 

name, address, and taxpayer identification number of the principal to 

the recipient in the second currency transaction need not report the 

initial receipt of currency under this section. An agent will be deemed 

to have met the disclosure requirements of this paragraph (a)(3)(ii) if 

the agent discloses only the name of the principal and the agent knows 

that the recipient has the principal's address and taxpayer 

identification number.

    (iii) Example. The following example illustrates the application of 

the rules in paragraphs (a)(3)(i) and (ii) of this section:



    Example. B, the principal, gives D, an attorney, $75,000 in currency 

to purchase real property on behalf of B. Within 15 days D purchases 

real property for currency from E, a real estate developer, and 

discloses to E, B's name, address, and taxpayer identification number. 

Because the transaction qualifies for the exception provided in 

paragraph (a)(3)(ii) of this section, D need not report with respect to 

the initial receipt of currency under this section. The exception does 

not apply, however, if D pays E by means other than currency, or effects 

the purchase more than 15 days following receipt of the currency from B, 

or fails to disclose B's name, address, and taxpayer identification 

number (assuming D does not know that E already has B's address and 

taxpayer identification number), or purchases the property from a person 

whose sale of the property is not in the course of that person's trade 

or business. In any such case, D is required to report the receipt of 

currency from B under this section.



    (b) Multiple payments. The receipt of multiple currency deposits or 

currency installment payments (or other similar payments or prepayments) 

relating to a single transaction (or two or more related transactions), 

is reported as set forth in paragraphs (b)(1) through (b)(3) of this 

section.

    (1) Initial payment in excess of $10,000. If the initial payment 

exceeds $10,000, the recipient must report the initial payment within 15 

days of its receipt.

    (2) Initial payment of $10,000 or less. If the initial payment does 

not exceed $10,000, the recipient must aggregate the initial payment and 

subsequent



[[Page 395]]



payments made within one year of the initial payment until the aggregate 

amount exceeds $10,000, and report with respect to the aggregate amount 

within 15 days after receiving the payment that causes the aggregate 

amount to exceed $10,000.

    (3) Subsequent payments. In addition to any other required report, a 

report must be made each time that previously unreportable payments made 

within a 12-month period with respect to a single transaction (or two or 

more related transactions), individually or in the aggregate, exceed 

$10,000. The report must be made within 15 days after receiving the 

payment in excess of $10,000 or the payment that causes the aggregate 

amount received in the 12-month period to exceed $10,000. (If more than 

one report would otherwise be required for multiple currency payments 

within a 15-day period that relate to a single transaction (or two or 

more related transactions), the recipient may make a single combined 

report with respect to the payments. The combined report must be made no 

later than the date by which the first of the separate reports would 

otherwise be required to be made.)

    (4) Example. The following example illustrates the application of 

the rules in paragraphs (b)(1) through (b)(3) of this section:



    Example. On January 10, Year 1, M receives an initial payment in 

currency of $11,000 with respect to a transaction. M receives subsequent 

payments in currency with respect to the same transaction of $4,000 on 

February 15, Year 1, $6,000 on March 20, Year 1, and $12,000 on May 15, 

Year 1. M must make a report with respect to the payment received on 

January 10, Year 1, by January 25, Year 1. M must also make a report 

with respect to the payments totaling $22,000 received from February 15, 

Year 1, through May 15, Year 1. This report must be made by May 30, Year 

1, that is, within 15 days of the date that the subsequent payments, all 

of which were received within a 12-month period, exceeded $10,000.



    (c) Meaning of terms. The following definitions apply for purposes 

of this section--

    (1) Currency. Solely for purposes of 31 U.S.C. 5331 and this 

section, currency means--

    (i) 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; and

    (ii) A cashier's check (by whatever name called, including 

``treasurer's check'' and ``bank check''), bank draft, traveler's check, 

or money order having a face amount of not more than $10,000--

    (A) Received in a designated reporting transaction as defined in 

paragraph (c)(2) of this section (except as provided in paragraphs 

(c)(3), (4), and (5) of this section), or

    (B) Received in any transaction in which the recipient knows that 

such instrument is being used in an attempt to avoid the reporting of 

the transaction under section 5331 and this section.

    (2) Designated reporting transaction. A designated reporting 

transaction is a retail sale (or the receipt of funds by a broker or 

other intermediary in connection with a retail sale) of--

    (i) A consumer durable, (ii) A collectible, or

    (iii) A travel or entertainment activity.

    (3) Exception for certain loans. A cashier's check, bank draft, 

traveler's check, or money order received in a designated reporting 

transaction is not treated as currency pursuant to paragraph 

(c)(1)(ii)(A) of this section if the instrument constitutes the proceeds 

of a loan from a bank. The recipient may rely on a copy of the loan 

document, a written statement from the bank, or similar documentation 

(such as a written lien instruction from the issuer of the instrument) 

to substantiate that the instrument constitutes loan proceeds.

    (4) Exception for certain installment sales. A cashier's check, bank 

draft, traveler's check, or money order received in a designated 

reporting transaction is not treated as currency pursuant to paragraph 

(c)(1)(ii)(A) of this section if the instrument is received in payment 

on a promissory note or an installment sales contract (including a lease 

that is considered to be a sale for Federal income tax purposes). 

However, the preceding sentence applies only if--



[[Page 396]]



    (i) Promissory notes or installment sales contracts with the same or 

substantially similar terms are used in the ordinary course of the 

recipient's trade or business in connection with sales to ultimate 

consumers; and

    (ii) The total amount of payments with respect to the sale that are 

received on or before the 60th day after the date of the sale does not 

exceed 50 percent of the purchase price of the sale.

    (5) Exception for certain down payment plans. A cashier's check, 

bank draft, traveler's check, or money order received in a designated 

reporting transaction is not treated as currency pursuant to paragraph 

(c)(1)(ii)(A) of this section if the instrument is received pursuant to 

a payment plan requiring one or more down payments and the payment of 

the balance of the purchase price by a date no later than the date of 

the sale (in the case of an item of travel or entertainment, a date no 

later than the earliest date that any item of travel or entertainment 

pertaining to the same trip or event is furnished). However, the 

preceding sentence applies only if--

    (i) The recipient uses payment plans with the same or substantially 

similar terms in the ordinary course of its trade or business in 

connection with sales to ultimate consumers; and

    (ii) The instrument is received more than 60 days prior to the date 

of the sale (in the case of an item of travel or entertainment, the date 

on which the final payment is due).

    (6) Examples. The following examples illustrate the definition of 

``currency'' set forth in paragraphs (c)(1) through (c)(5) of this 

section:



    Example 1. D, an individual, purchases gold coins from M, a coin 

dealer, for $13,200. D tenders to M in payment United States currency in 

the amount of $6,200 and a cashier's check in the face amount of $7,000 

which D had purchased. Because the sale is a designated reporting 

transaction, the cashier's check is treated as currency for purposes of 

31 U.S.C. 5331 and this section. Therefore, because M has received more 

than $10,000 in currency with respect to the transaction, M must make 

the report required by 31 U.S.C. 5331 and this section.

    Example 2. E, an individual, purchases an automobile from Q, an 

automobile dealer, for $11,500. E tenders to Q in payment United States 

currency in the amount of $2,000 and a cashier's check payable to E and 

Q in the amount of $9,500. The cashier's check constitutes the proceeds 

of a loan from the bank issuing the check. The origin of the proceeds is 

evident from provisions inserted by the bank on the check that instruct 

the dealer to cause a lien to be placed on the vehicle as security for 

the loan. The sale of the automobile is a designated reporting 

transaction. However, under paragraph (c)(3) of this section, because E 

has furnished Q documentary information establishing that the cashier's 

check constitutes the proceeds of a loan from the bank issuing the 

check, the cashier's check is not treated as currency pursuant to 

paragraph (c)(1)(ii)(A) of this section.

    Example 3. F, an individual, purchases an item of jewelry from S, a 

retail jeweler, for $12,000. F gives S traveler's checks totaling $2,400 

and pays the balance with a personal check payable to S in the amount of 

$9,600. Because the sale is a designated reporting transaction, the 

traveler's checks are treated as currency for purposes of section 5331 

and this section. However, because the personal check is not treated as 

currency for purposes of section 5331 and this section, S has not 

received more than $10,000 in currency in the transaction and no report 

is required to be filed under section 5331 and this section.

    Example 4. G, an individual, purchases a boat from T, a boat dealer, 

for $16,500. G pays T with a cashier's check payable to T in the amount 

of $16,500. The cashier's check is not treated as currency because the 

face amount of the check is more than $10,000. Thus, no report is 

required to be made by T under section 5331 and this section.

    Example 5. H, an individual, arranges with W, a travel agent, for 

the chartering of a passenger aircraft to transport a group of 

individuals to a sports event in another city. H also arranges with W 

for hotel accommodations for the group and for admission tickets to the 

sports event. In payment, H tenders to W money orders which H had 

previously purchased. The total amount of the money orders, none of 

which individually exceeds $10,000 in face amount, exceeds $10,000. 

Because the transaction is a designated reporting transaction, the money 

orders are treated as currency for purposes of section 5331 and this 

section. Therefore, because W has received more than $10,000 in currency 

with respect to the transaction, W must make the report required by 

section 5331 and this section.



    (7) Consumer durable. The term consumer durable means an item of 

tangible personal property of a type that is suitable under ordinary 

usage for personal consumption or use, that can reasonably be expected 

to be useful for at least 1 year under ordinary usage,



[[Page 397]]



and that has a sales price of more than $10,000. Thus, for example, a 

$20,000 automobile is a consumer durable (whether or not it is sold for 

business use), but a $20,000 dump truck or a $20,000 factory machine is 

not.

    (8) Collectible. The term collectible means an item described in 

paragraphs (A) through (D) of section 408 (m)(2) of title 26 of the 

United States Code (determined without regard to section 408 (m)(3) of 

title 26 of the United States Code).

    (9) Travel or entertainment activity. The term travel or 

entertainment activity means an item of travel or entertainment (within 

the meaning of 26 CFR 1.274-2(b)(1)) pertaining to a single trip or 

event where the aggregate sales price of the item and all other items 

pertaining to the same trip or event that are sold in the same 

transaction (or related transactions) exceeds $10,000.

    (10) Retail sale. The term retail sale means any sale (whether for 

resale or for any other purpose) made in the course of a trade or 

business if that trade or business principally consists of making sales 

to ultimate consumers.

    (11) Trade or business. The term trade or business has the same 

meaning as under section 162 of title 26, United States Code.

    (12) Transaction. (i) Solely for purposes of 31 U.S.C. 5331 and this 

section, the term transaction means the underlying event precipitating 

the payer's transfer of currency to the recipient. In this context, 

transactions include (but are not limited to) a sale of goods or 

services; a sale of real property; a sale of intangible property; a 

rental of real or personal property; an exchange of currency for other 

currency; the establishment or maintenance of or contribution to a 

custodial, trust, or escrow arrangement; a payment of a preexisting 

debt; a conversion of currency to a negotiable instrument; a 

reimbursement for expenses paid; or the making or repayment of a loan. A 

transaction may not be divided into multiple transactions in order to 

avoid reporting under this section.

    (ii) The term related transactions means any transaction conducted 

between a payer (or its agent) and a recipient of currency in a 24-hour 

period. Additionally, transactions conducted between a payer (or its 

agent) and a currency recipient during a period of more than 24 hours 

are related if the recipient knows or has reason to know that each 

transaction is one of a series of connected transactions.

    (iii) The following examples illustrate the definition of paragraphs 

(c)(12) (i) and (ii) of this section:



    Example 1. A person has a tacit agreement with a gold dealer to 

purchase $36,000 in gold bullion. The $36,000 purchase represents a 

single transaction under paragraph (c)(12)(i) of this section and the 

reporting requirements of this section cannot be avoided by recasting 

the single sales transaction into 4 separate $9,000 sales transactions.

    Example 2. An attorney agrees to represent a client in a criminal 

case with the attorney's fee to be determined on an hourly basis. In the 

first month in which the attorney represents the client, the bill for 

the attorney's services comes to $8,000 which the client pays in 

currency. In the second month in which the attorney represents the 

client, the bill for the attorney's services comes to $4,000, which the 

client again pays in currency. The aggregate amount of currency paid 

($12,000) relates to a single transaction as defined in paragraph 

(c)(12)(i) of this section, the sale of legal services relating to the 

criminal case, and the receipt of currency must be reported under this 

section.

    Example 3. A person intends to contribute a total of $45,000 to a 

trust fund, and the trustee of the fund knows or has reason to know of 

that intention. The $45,000 contribution is a single transaction under 

paragraph (c)(12)(i) of this section and the reporting requirement of 

this section cannot be avoided by the grantor's making five separate 

$9,000 contributions of currency to a single fund or by making five 

$9,000 contributions of currency to five separate funds administered by 

a common trustee.

    Example 4. K, an individual, attends a one day auction and purchases 

for currency two items, at a cost of $9,240 and $1,732.50 respectively 

(tax and buyer's premium included). Because the transactions are related 

transactions as defined in paragraph (c)(12)(ii) of this section, the 

auction house is required to report the aggregate amount of currency 

received from the related sales ($10,972.50), even though the auction 

house accounts separately on its books for each item sold and presents 

the purchaser with separate bills for each item purchased.

    Example 5. F, a coin dealer, sells for currency $9,000 worth of gold 

coins to an individual on three successive days. Under paragraph 

(c)(12)(ii) of this section the three $9,000 transactions are related 

transactions aggregating $27,000 if F knows, or has reason



[[Page 398]]



to know, that each transaction is one of a series of connected 

transactions.



    (13) Recipient. (i) The term recipient means the person receiving 

the currency. Except as provided in paragraph (c)(13)(ii) of this 

section, each store, division, branch, department, headquarters, or 

office (``branch'') (regardless of physical location) comprising a 

portion of a person's trade or business shall for purposes of this 

section be deemed a separate recipient.

    (ii) A branch that receives currency payments will not be deemed a 

separate recipient if the branch (or a central unit linking such branch 

with other branches) would in the ordinary course of business have 

reason to know the identity of payers making currency payments to other 

branches of such person.

    (iii) Examples. The following examples illustrate the application of 

the rules in paragraphs (c)(13)(i) and (ii) of this section:



    Example 1. N, an individual, purchases regulated futures contracts 

at a cost of $7,500 and $5,000, respectively, through two different 

branches of Commodities Broker X on the same day. N pays for each 

purchase with currency. Each branch of Commodities Broker X transmits 

the sales information regarding each of N's purchases to a central unit 

of Commodities Broker X (which settles the transactions against N's 

account). Under paragraph (c)(13)(ii) of this section the separate 

branches of Commodities Broker X are not deemed to be separate 

recipients; therefore, Commodities Broker X must report with respect to 

the two related regulated futures contracts sales in accordance with 

this section.

    Example 2. P, a corporation, owns and operates a racetrack. P's 

racetrack contains 100 betting windows at which pari-mutuel wagers may 

be made. R, an individual, places currency wagers of $3,000 each at five 

separate betting windows. Assuming that in the ordinary course of 

business each betting window (or a central unit linking windows) does 

not have reason to know the identity of persons making wagers at other 

betting windows, each betting window would be deemed to be a separate 

currency recipient under paragraph (c)(13)(i) of this section. As no 

individual recipient received currency in excess of $10,000, no report 

need be made by P under this section.



    (d) Exceptions to the reporting requirements of 31 U.S.C. 5331--(1) 

Receipt of currency by certain casinos having gross annual gaming 

revenue in excess of $1,000,000--(i) In general. If a casino receives 

currency in excess of $10,000 and is required to report the receipt of 

such currency directly to the Treasury Department under Sec. Sec. 

103.22 (a)(2) and 103.25 and is subject to the recordkeeping 

requirements of Sec. 103.36, then the casino is not required to make a 

report with respect to the receipt of such currency under 31 U.S.C. 5331 

and this section.

    (ii) Casinos exempt under Sec. 103.55(c). Pursuant to Sec. 103.55, 

the Secretary may exempt from the reporting and recordkeeping 

requirements under Sec. Sec. 103.22, 103.25 and 103.36 casinos in any 

state whose regulatory system substantially meets the reporting and 

recordkeeping requirements of this part. Such casinos shall not be 

required to report receipt of currency under 31 U.S.C. 5331 and this 

section.

    (iii) Reporting of currency received in a nongaming business. 

Nongaming businesses (such as shops, restaurants, entertainment, and 

hotels) at casino hotels and resorts are separate trades or businesses 

in which the receipt of currency in excess of $10,000 is reportable 

under section 5331 and these regulations. Thus, a casino exempt under 

paragraph (d)(1)(i) or (ii) of this section must report with respect to 

currency in excess of $10,000 received in its nongaming businesses.

    (iv) Example. The following example illustrates the application of 

the rules in paragraphs (d)(2) (i) and (iii) of this section:



    Example. A and B are casinos having gross annual gaming revenue in 

excess of $1,000,000. C is a casino with gross annual gaming revenue of 

less than $1,000,000. Casino A receives $15,000 in currency from a 

customer with respect to a gaming transaction which the casino reports 

to the Treasury Department under Sec. Sec. 103.22(a)(2) and 103.25. 

Casino B receives $15,000 in currency from a customer in payment for 

accommodations provided to that customer at Casino B's hotel. Casino C 

receives $15,000 in currency from a customer with respect to a gaming 

transaction. Casino A is not required to report the transaction under 31 

U.S.C. 5331 or this section because the exception for certain casinos 

provided in paragraph (d)(1)(i) of this section (``the casino 

exception'') applies. Casino B is required to report under 31 U.S.C. 

5331 and this section because the casino exception does not apply to the 

receipt of currency from a nongaming activity. Casino C is required to 

report under 31 U.S.C. 5331 and



[[Page 399]]



this section because the casino exception does not apply to casinos 

having gross annual gaming revenue of $1,000,000 or less which do not 

have to report to the Treasury Department under Sec. Sec. 103.22(a)(2) 

and 103.25.



    (2) Receipt of currency not in the course of the recipient's trade 

or business. The receipt of currency in excess of $10,000 by a person 

other than in the course of the person's trade or business is not 

reportable under 31 U.S.C. 5331. Thus, for example, F, an individual in 

the trade or business of selling real estate, sells a motorboat for 

$12,000, the purchase price of which is paid in currency. F did not use 

the motorboat in any trade or business in which F was engaged. F is not 

required to report under 31 U.S.C. 5331 or this section because the 

exception provided in this paragraph (d)(2) applies.

    (3) Receipt is made with respect to a foreign currency transaction--

(i) In general. Generally, there is no requirement to report with 

respect to a currency transaction if the entire transaction occurs 

outside the United States (the fifty states and the District of 

Columbia). An entire transaction consists of both the transaction as 

defined in paragraph (c)(12)(i) of this section and the receipt of 

currency by the recipient. If, however, any part of an entire 

transaction occurs in the Commonwealth of Puerto Rico or a possession or 

territory of the United States and the recipient of currency in that 

transaction is subject to the general jurisdiction of the Internal 

Revenue Service under title 26 of the United States Code, the recipient 

is required to report the transaction under this section.

    (ii) Example. The following example illustrates the application of 

the rules in paragraph (d)(3)(i) of this section:



    Example. W, an individual engaged in the trade or business of 

selling aircraft, reaches an agreement to sell an airplane to a U.S. 

citizen living in Mexico. The agreement, no portion of which is 

formulated in the United States, calls for a purchase price of $125,000 

and requires delivery of and payment for the airplane to be made in 

Mexico. Upon delivery of the airplane in Mexico, W receives $125,000 in 

currency. W is not required to report under 31 U.S.C. 5331 or this 

section because the exception provided in paragraph (d)(3)(i) of this 

section (``foreign transaction exception'') applies. If, however, any 

part of the agreement to sell had been formulated in the United States, 

the foreign transaction exception would not apply and W would be 

required to report the receipt of currency under 31 U.S.C. 5331 and this 

section.



    (e) Time, manner, and form of reporting--(1) In general. The reports 

required by paragraph (a) of this section must be made by filing a Form 

8300, as specified in 26 CFR 1.6050I-1(e)(2). The reports must be filed 

at the time and in the manner specified in 26 CFR 1.6050I-1(e)(1) and 

(3) respectively.

    (2) Verification. A person making a report of information under this 

section must verify the identity of the person from whom the reportable 

currency is received. Verification of the identity of a person who 

purports to be an alien must be made by examination of such person's 

passport, alien identification card, or other official document 

evidencing nationality or residence. Verification of the identity of any 

other person may be made by examination of a document normally 

acceptable as a means of identification when cashing or accepting checks 

(for example, a driver's license or a credit card). In addition, a 

report will be considered incomplete if the person required to make a 

report knows (or has reason to know) that an agent is conducting the 

transaction for a principal, and the return does not identify both the 

principal and the agent.

    (3) Retention of reports. A person required to make a report under 

this section must keep a copy of each report filed for five years from 

the date of filing.



[66 FR 67681, Dec. 31, 2001]