What happens when a bank closes all my accounts?

Your admitted act of structuring your deposits in order to avoid the reporting requirement, in and of itself, was likely illegal. Keep working with the bank to find out your options.

EDIT: For this amount of money, you may want/need to speak to an attorney. In fact, it might be best to do that first in order to avoid further incriminating yourself.

 

I keep many valuable things in my two safe deposit boxes at two different banking institutions. I've done that for 40 years, no issues whatsoever.

Unfortunately you assisted the authorities in your flagging, perhaps financial FLOGGING.

Worrying never helps, however you might remain WATCHFUL.

 

Why on Earth would you ask that and why would she do it?

You put $35k in cash in a safe-deposit box (not "safety deposit")?

Despite your use of a question mark, this sentence isn't a question. If you intended a question, I cannot discern what you intended to ask. You certainly wouldn't have been taxed on this money, and the only reason large cash deposits are flagged is so that the situation can be reviewed for potential criminal activity. Here's a summary of how this works.

Who are "they"? What is a "regions account"? What reason did "they" provide for the closure?

I can't conceive of any way the answer to this question could be anything other than yes.

Well...yeah...you've got what, for most folks, is a shload of money to which you apparently don't have access, and this happened because you behaved in a foolish manner based on bad information you got from who-knows-where.

Definitely should consult with a local attorney for a review of the situation and advice.

 

When you deposit cash of $10,000 or more in a single transaction or series of related transactions the bank must report that to the US Treasury. That does not automatically make the deposit either suspect or taxable income. If you can show the money came from a legal source and was not taxable income you don't have a problem.

Banks must also report any transaction(s) that appear to be suspicious. Transactions that are a significant departure from your normal banking activity may end up getting reported as well.

Banks cannot keep open accounts they suspect of being used for illegal activity.

Banks can, per the account agreement they have with you, close your account at any time for any reason (other than reasons like illegal discrimination, of course).

You should have just deposited the entire $35,000 at the time you got it. Sure, the bank would have reported it, but since that deposit was not part of any criminal transaction you'd not have had a problem. And while the IRS might have asked about it when you didn't report any income to match the deposit, so long as you could show how you got the money you would not have been hit with any tax from it.

That's one reason for the reporting. The other is aiding the IRS in finding under reporting of income. While you might include under reporting as possibly criminal, the IRS uses that information for much more than pursuing criminal tax investigations. It also uses it as a tool in its audit and collection activities, much like using W-2s, 1099s, and other information returns it receives.