When A Us Friend/Relative Wires Money To You That You Xfered To Them

[Jingthing]

OK, this is a bit of a hypothetical question of the relation between US banking/IRS and Thai visa finances. Many of us wire in money annually to "top up" our Thai bank accounts for visa qualifying purposes.

Supposing this scenario --

- something goes wrong with your US bank wiring agreement

- you ask a friend or relative to help you

- for example, you transfer in 15K USD plus the expected wire fee to your friends bank account

- they then SWIFT you the 15K USD to Thailand

Assuming the friend would NOT claim that 15K as income (as it wasn't even a loan, just a short term favor), would the helper have any issues with the IRS? Supposing the IRS did discover the activity and make a challenge, would the paper trail of what happened be sufficient for them to prove it wasn't income?

[Pib]

Gosh, this may be one of those questions with no "for sure" answer. My googling indicated that "if," repeat, if the IRS classified this as a gift, there may be reporting requirements for at least you..maybe for the recipient also...I didn't google that much. And of course, the amount makes a difference as to what may have to be reported at $13K seems to be one of the magic number for tax year 2009. See attached IRS Gift Tax info.

http://www.irs.gov/pub/irs-pdf/i709.pdf

But it seems to me if you and the friend kept written records and the funds you transfer to him are transferred/relayed back to you "within" a few days at your Thailand bank account then everything should be OK...unless the IRS wants you to prove some illegal money flow, betting, etc...etc...etc., ain't going on especially if done on a routine basis....and why didn't the original sender (you) just fix his wire transfer problem. I know banks, western union, etc., are basically accepting money from a person for a few minutes and then transferring to the another account of the same person, but they are a business and allowed to do such under the law.

I know above ain't much of an answer/input, the above IRS instructions may be handy in your research. Cheers.

[Jingthing]

Often fixing a wiring agreement problem involves physically traveling to the USA. Not always practical. Yes, I think the amount does probably matter. I thought there may be something magical in a bad way about amounts over 10K USD.

[flying]

the only possible alert is the 15k into the friends account all at once.

But even that is small potatoes & would never be questioned even if the bank did file a form.

If it ever was the friend could say almost anything including what you mentioned that it was a loan. Or sold personal *used* goods what ever. Not a big deal IMO

But to make it even simpler trans the money into the friends account sub10k at a time.

For the IRS to make the claim that it was income....they would only react that way if there was a counter claim by someone making a tax deduction due to having paid that as a wage etc.

Edited June 19, 2010 by flying

[Jingthing]

Yeah there a lot of issues here.

Transferring amounts less than 10K per time would probably be wise, but if it was ever examined, that may give the appearance of trying to play a game. Still, it may be the best tactic as that would theoretically avoid any flag to the IRS.

Of course the friend would never file the transaction as income or anything, so it would have to be the result of the IRS finding out about it, and questioning it in an audit.

It seems to me with the paper trail and explanation, that it clearly is not a taxable event. However, like many, I don't have a lot of confidence that the IRS is always logical and/or fair.

Also, its a big enough favor to ask of a friend, it would majorly suck if it resulted in an audit, even if the result was favorable, nobody likes an audit.

Edited June 19, 2010 by Jingthing

[silverhawk_usa]

The "game" Jingthing alludes to is actually called "Money Structuring" and is a crime in itself. This is often looked for during narcotic investigations and other suspected illegal activity.

Wikipedia= "Structuring includes the act of parceling large financial transactions into smaller transactions to avoid scrutiny by regulators or law enforcement. Structuring often appears in federal indictments related to money laundering, fraud, and other financial crimes."

As stated in the previous posts, depending on the length of time and the total amount, you more than likely would not come under the governtment's watchful eye, But, then again ??????????????

On a personal note; I too lost my ability to do wire transfers from the U.S. due to a change of bank management and the length of time I have been here. My Bangkok bank branch allows me to write a personal check to myself (a $10 fee is charged). It takes a month to clear but the funds are deposited from my U.S. bank to my savings here with no other charges at the current exchange rate. I just need to plan about 30 days in advance. I have been doing this for the past two years. This has been addressed in other posts.

[hhgz]

The referenced IRS publication is for gifts and generating=skipping taxes, and it has nothing to do with the proposed scenario. A short-term, no interest loan between friends is not illegal.

[NanLaew]

^ Agreed.... but the fact that funds moved onshore to offshore and vice versa will be seen. Whether the IRS will see this one-off as being a potential 'money structuring' job depends on how lucky you are.

For instance, when I took up US employment in 1991, my employers and workmates told me not to worry about an IRS audit as that's just for 'bad guys'. Twelve months later, I am audited and eighteen years and several thousands of dollars in legal fees later, they still reckon I owe them for income earned outside the US in 1990, the year prior to my domestic US employment commencing. Even the ICE guy saw the Federal Liens that are now on my immigration file when I passed through last week. He asked me if I was going to take care of it. I told him to speak with my lawyer.

Regards the OP; the only money that goes in and out of my remaining US bank and credit card accounts is mine. If there's a balls up like the Bank of America/Bangkok Bank transfer freeze of early last year, I used an offshore UK backup account although using a buddies domestic US account would have been simpler and quicker like the OP's scenario. Best keep buddies out of the picture when it comes to the Feds.

Obamastan is much nastier than Bushistan ever was.

[Pib]

With every money transfer (even sending money to yourself between your accounts),especially for amounts over $10,000, there is a possibility of a Currency Transaction Report (CTR) being generated which can cause some grief if the authorities determine some thing fishy is going on. See the following web site Forms for more details (and confusion/govt talk as to what might trigger a CTR).

The more I read about this, the more I feel it's OK to do your hypothetical method as long as it's not a money structuring/laundering, terrorism support, or tax evasion scheme--"not to imply that at all." It's just a method which may have to be used because of the banking challenges we expats all face when living overseas.

By hey, I'm just a layman with a below average IQ...I could be totally wrong. Cheers.

[Jingthing]

Its definitely a last resort. I am not sure friends and relatives should say yes to this favor when considering all the potential pitfalls.

[Langsuan Man]

I don't know about anyone else but my bank will only do International Wire Transfers to an account with MY name on it. No third party Wires allowed so this "hypothetical" must be grounded in reality

[Jingthing]

I don't know about anyone else but my bank will only do International Wire Transfers to an account with MY name on it. No third party Wires allowed so this "hypothetical" must be grounded in reality

Any US person with online access could at least send a CHECK to any other US person and then the friend could deposit it in their US account (pay bill function), then after the money clears, walk into their US bank and effect a SWIFT transfer to anyone in the world they please. In my case, I have a friend who uses the same US bank, so I can actually do a direct US bank to US bank account transfer online to his account. But your point is valid as it would usually add another wrinkle to this. Most people would be sending a physical check to the US person. For that matter, you could mail a physical check from Thailand to the US for the same purpose. The effect is the same, a large transaction in the friend's account that they wouldn't want to report as income, because it isn't. So in any case, except for some technical details, the hypothetical stands, in respect to the problem for the friend of a strange money flow.

Edited June 19, 2010 by Jingthing

[Pib]

I don't know about anyone else but my bank will only do International Wire Transfers to an account with MY name on it. No third party Wires allowed so this "hypothetical" must be grounded in reality

A person can wire money to pretty much anybody and any account--except maybe from your bank. All you need is the person's name/address/bank account number to wire them money. Like a Thai working overseas sending money back to his family (and his name is not on the receiving account), like me for many years sending money to my wife mother's account, like a farang wiring his Thai GF some money, etc...etc...etc. Heck, if you want to test it out I can give you my Thai bank account number and you can send me some money (at least $5000 to ensure it a good test); and I promise to wire it back to you (maybe).

[Jingthing]

This thread is going off the rails of the topic.

Edited June 19, 2010 by Jingthing

[BEENTHEREDONETHAT]

I don't know about anyone else but my bank will only do International Wire Transfers to an account with MY name on it. No third party Wires allowed so this "hypothetical" must be grounded in reality

A person can wire money to pretty much anybody and any account--except maybe from your bank. All you need is the person's name/address/bank account number to wire them money. Like a Thai working overseas sending money back to his family (and his name is not on the receiving account), like me for many years sending money to my wife mother's account, like a farang wiring his Thai GF some money, etc...etc...etc. Heck, if you want to test it out I can give you my Thai bank account number and you can send me some money (at least $5000 to ensure it a good test); and I promise to wire it back to you (maybe).

Good idea Pib what is your bank account number?:D:D

[flying]

As to the CTR's folks need to realize how many million are generated per year.

They are there as shoestrings to further investigation as an aside.

This is truly small potatoes & would never warrant any further investigation unless one of the two parties was being specifically investigated for something much larger.Only then would they run the name through the system & see CTR's

But the main point is...Nothing illegal is being done anyway

PS: Langsuan Man...That is a very limited bank you deal with eh?

I have wired money many times for various reasons to many different folks in LOS from the US.

I have done it from both US banks & US credit Unions

As others have said only a name & acct number is needed.

[Langsuan Man]

PS: Langsuan Man...That is a very limited bank you deal with eh?

I have wired money many times for various reasons to many different folks in LOS from the US.

I have done it from both US banks & US credit Unions

As others have said only a name & acct number is needed.

[flying]

E-TRADE BANK

I see.......

The problem there is E-Trade is not a physical bank it is a Cyber/virtual Bank

As such it will not be a full service bank & will be much more limited/cautious

Edited June 19, 2010 by flying

[Langsuan Man]

E-TRADE BANK

I see.......

The problem there is E-Trade is not a physical bank it is a Cyber/virtual Bank

As such it will not be a full service bank & will be much more limited/cautious

Limited but all ATM fees (foreign and domestic) are reimbursed and International Wires and Domestic Wires are only $25

[Heng]

I have had relatively less well off friends get audited (which most say doesn't happen), but IME, judging from all types of Asian Americans doing an awful lot of cash business in the US AND regularly repatriating funds via wires/traveler's checks/cash to Asia over years and decades, it's kind of like a reverse lottery and that you won't even be noticed.

[Naam]

I don't know about anyone else but my bank will only do International Wire Transfers to an account with MY name on it. No third party Wires allowed so this "hypothetical" must be grounded in reality

it is your problem if you bank with a shitty bank. a bank i am dealing with has to execute ANY instruction i give if it concerns my money or asset!

Edited June 20, 2010 by Naam

[Jingthing]

I had a bad experience trying a SWIFT wire with etrade. They had an online facility to do that and I went through it, and then inexplicably rejected. Had to call them and they told me even though their online system supports it, they don't actually do online SWIFT wires. That damaged my confidence in that firm. Not sure if you can still put through a bogus online SWIFT anymore there, or not. And yes at etrade with SWIFT wires, they need to be account holder to the same person.

[JimGant]

An E*Trade bank account is not the same as an E*Trade brokerage account. The latter does allow wire transfers to third parties, with the following proviso:

We require a notarized letter of authorization to wire funds to a third-party, or to an account with registration different than your brokerage

account.

And wires can be implemented on-line (or at least so-says the following site:

https://global.etrade.com/e/t/intl/media?id=ETRA543_SalesSheet_WireMoney_En_160608.pdf

[Jingthing]

I have both etrade options. And what they SAY online is NOT the same thing as what actually happened to me when I tried it!

I am talking about international SWIFT wires. Of course you can transfer money internally. When I tried it, I processed the entire thing online, it was clearly a SWIFT transfer, all the facility was there, until I found it later they don't support online SWIFT in reality. Yes it was the same name to the same name. That seriously annoyed me.

However, it is always possible they changed their policy (again). Has anyone RECENTLY done a SWIFT transfer online through etrade?

Edited June 20, 2010 by Jingthing