Legal Definitions - cash-transaction report

A cash-transaction report refers to a specific document, IRS Form 4789, that financial institutions are legally required to file with the Internal Revenue Service (IRS). This form is used to report any single cash transaction or a series of related cash transactions that total more than $10,000. The primary purpose of these reports is to help government agencies detect and prevent activities such as money laundering, terrorist financing, and tax evasion by tracking large movements of cash.

Here are some examples illustrating when a cash-transaction report would be filed:

• Example 1: Large Personal Deposit
  Maria sells a valuable antique collection at an estate sale and receives $12,500 in cash. She then goes to her local bank branch and deposits the entire amount into her personal savings account. Because the cash deposit exceeds $10,000, the bank is obligated to complete and submit an IRS Form 4789, a cash-transaction report, detailing the transaction to the IRS.

• Example 2: Business Cash Withdrawal
  A small construction company owner, Mr. Henderson, needs to pay several subcontractors in cash for a rush job. He visits his credit union and withdraws $11,000 in cash from his business checking account. Even though it's a withdrawal rather than a deposit, the credit union must still file a cash-transaction report (IRS Form 4789) because the cash amount involved in the single transaction exceeds the $10,000 threshold.

• Example 3: Currency Exchange
  A tourist, Mr. Chen, arrives in the United States with 15,000 Euros in cash. He goes to a licensed currency exchange service to convert his Euros into U.S. dollars. Since the equivalent value of 15,000 Euros in U.S. dollars exceeds $10,000, the currency exchange service, as a financial institution, is required to file a cash-transaction report (IRS Form 4789) with the IRS to document this large cash exchange.