In an audit it has been brought to my attention that CTR's are not being filed for businesses that have their employees cashing checks. There have been several instances where the total cash out is over $10,000.00 in one day due to payroll check cashing. Also it has been asked are we still to report on the County Tax Collection account?
My thought is anything over $10,000.00 should be reported.
Is anyone else exempting these types of transactions?

Thanks for the assistance,
Lisa

If the tax collection account belongs to a county government, it's exempt under Phase I.

Your description in the paycheck-cashing question implies that the businesses are directing their employees to obtain cash by way of the checks. If this is truely the case (very unlikely), then you MAY view the CTs as being "on behalf of" the businesses.Absent any evidence that the businesses are directing their employees to obtain currency, there's no reportable event because the CTs are neither "by" or "on behalf of" the businesses. In the typical case, employees are free to obtain cash or deposit the check to an account. Should the employee choose cash, then you would monitor the employee and report >$10,000 transactions or aggregates involving the employee.

Richard is correct. If you have ABC's payroll account and their employees come to you to cash their checks, your reports may indicate cash outs exceeding $10,000 at the end of the business day. However, as noted, the checks were cashed by and on behalf of the employees, not ABC. There is nothing to report.

Several years ago, an article in an ABA publication stated a contrary opinion. Although BSA interepretations are not their province, the FDIC eventually issued an FIL saying that it was not appropriate to aggregate payroll checks cashed. I looked for the FIL, but did not find it in '95 or '96 so it may have been issued prior to then.

On the other hand (isn't there always another hand?), there could be a check-cashing scenario in which you'd have to file a CTR. It's admittedly rare, but I've seen it happen. It's a variation on the scenario suggested by Richard.

Suppose that XYZ company, rather than losing employee time to bank visits (for some reason they don't successfully offer Direct Deposit), provides a service whereby employees who want their checks cashed endorse them and give them to a "runner" to take to the bank. The runner then cashes all the checks and places the proceeds, along with the check stubs, in payroll envelopes for return to their rightful owners.

In this scenario, there might be more than $10,000 cash paid out at once. So you'd have to complete a CTR based on who transacted the business (the runner), who would be fully identified in Part I, Section B of the form. And, of course, you are then stuck with multiple Section A entries, one for each of the payees. And you won't have much info for Section A of the form unless you have a cooperative employer who supplies all that information. Finally, if you have more than three checks, and you're filing paper CTR forms, you'll need to attach blank sheets (see the instructions with the form) with the additional payees' information.

For obvious reasons, you don't want to encourage this practice. But if you have an employer who insists upon it, try to have the employer complete Section A of the CTR forms for you (with payee information complete) or at least supply all the information needed.

Good points, John. In the case of the runner with 50 paychecks, I have no problem reporting the transaction---because it is A transaction (or a series of related transactions). The common denominator is the person conducting the transaction. S/he has caused a large CT to occur.

While you may not want to encourage this from the CTR perspective, you also don't want your teller lines gummed up with 50 non-customers cashing on-us paychecks. Another solution to this common problem is for the business to make a large cash withdrawal (reportable), have it's HR department cash the checks, and then bring the checks to the bank and deposit them to it's account.