ACH transfer $10,000 or over

[Jon1980B]

I have accounts at Bank A and Bank B. If I ACH transfer my money $10,000 or more from Bank A to Bank B, and the amount is not a payment from someone else, is the ACH transfer reportable to IRS? In this case, I'm just moving my money for my own personal pursuit to chase the rates in current rising interest rates environment.

 

[Tax Counsel]

I have accounts at Bank A and Bank B. If I ACH transfer my money $10,000 or more from Bank A to Bank B, and the amount is not a payment from someone else, is the ACH transfer reportable to IRS? In this case, I'm just moving my money for my own personal pursuit to chase the rates in current rising interest rates environment.

There won't be a currency transaction report CTR) for this. Also, the requirement for a financial institution to report currency transactions of $10,000 or more is not directly reported to the IRS. It is filed with the U.S. Treasury's FinCEN office and then shared electronically with IRS. The primary purpose of the requirement is to catch money laundering and similar money related crimes. The term currency is defined in the FinCEN form 104 filing instructions as "[t]he coin and paper money of the United States or any other country, which is circulated and customarily used and accepted as money." Moreover, those same instructions define a transaction in cash as

The physical transfer of currency from one person to another. This does not include a transfer of funds by means of bank check, bank draft, wire transfer or other written order that does not involve the physical transfer of currency.​

(bolding in the original). So the target here is to report actual cash transaction because without such reporting that movement of cash by criminals would be undetected. Your ACH transfer, on the other hand, will have a record in both institutions that the government may trace through if there is cause for the government to believe that the person may be committing a crime which involves those kinds of transfers.

There is another report that financial institutions must file called a suspious transaction report. That requirement covers suspicious transactions regardless of amount. Without going into detail, a transfer as you described is not likely to get reported.

Even if a report is made and the IRS sees that there was a transfer, the fact that the money goes from one of your accounts to another of your accounts does not itself create taxable income. That's like taking money from one of your pockets and putting it in another of your pockets. That's not something that would interest the IRS at all.

Bottom line is that just from what you've said here you shouldn't have anything to worry about with this transfer. If you still have concerns, consult a lawyer familiar with the currency reporting requirements for advice.