Tax News

CCH (cch.taxgroup.com) reports:

  The Financial Crimes Enforcement Network (FinCEN) has proposed amendments to a regulation issued under the Bank Secrecy Act that allows depository institutions to exempt transactions of certain persons from the requirement to report currency transactions in excess of $10,000. The proposed changes are intended to simplify the current requirements for depository institutions.

  Under the current regulations, a depository institution may exempt so-called "nonlisted businesses" and "payroll customers" from the reporting requirements but not until the customer has maintained a transaction account at the bank for at least 12 months. FinCEN is proposing to amend that requirement by removing the 12-month time period and, instead, enabling the institution to make a risk-based determination as to when it has a sufficient history with such customers to treat them as exempt.

  The proposal also would eliminate the requirement that depository institutions file an initial designation of exempt persons by using FinCEN Form 110 for eligible customers that are depository institutions, federal, state or local governments, or entities exercising governmental authority. This change is to simplify the currency transaction report exemption process while ensuring that law enforcement continues to receive useful information.

  In addition, FinCEN proposes to eliminate the requirement that depository institutions conduct an annual review of the information supporting certain exempt eligible customers that are banks, government agencies and entities exercising governmental authority. With regard to changes in control of nonlisted businesses and payroll customers, FinCEN is proposing that depository institutions file a renewal form only if there has been a change in control for an exempted customer during recurring two-year reporting periods.

  Finally, the proposal would eliminate the requirement that depository institutions biennially file a designation of exempt person for nonlisted and payroll customers. This proposed rule is intended to encourage institutions that had not exempted such customers to do so.

  Comments have been requested on the proposal. Written comments must be received before June 24, 2008.

FinCEN Proposed Rule RIN 1506-AA90, 2008FED ¶49,801

Other References:

  31 USC 5311

  CCH Reference - 2008FED ¶36,541PC

  Tax Research Consultant

  CCH Reference - TRC FILEBUS: 9,316.05