Red flags on bank accounts
paperboy21
Florida
A stripper friend of mine is looking to go to grad school in the fall. The university to which she is applying is requiring proof of funds (i.e. a bank statement) showing that she has the money for school (to the tune of about $35k). Her plan is to have some of her friends "park" money in her account just long enough to obtain a statement, but then would end up working in her club to actually pay for school. And, no, none of my cash would be included in this plan (at least not directly!).
My question to my fellow TUSCLers is, do you know if placing such a sizeable amount of cash in a bank account would set off any red flags? She is not currently paying taxes on her "income". And being that she is the US on a student visa right now, I can only imagine what our friends at the IRS would think if this came to their attention...
Anyone have any suggestions as to how best to get this money on deposit? My guess was multiple accounts in multiple banks, each with a fairly reasonable amount (e.g. $5k). Is there some "magic number" over which suspicions start to get raised?
My question to my fellow TUSCLers is, do you know if placing such a sizeable amount of cash in a bank account would set off any red flags? She is not currently paying taxes on her "income". And being that she is the US on a student visa right now, I can only imagine what our friends at the IRS would think if this came to their attention...
Anyone have any suggestions as to how best to get this money on deposit? My guess was multiple accounts in multiple banks, each with a fairly reasonable amount (e.g. $5k). Is there some "magic number" over which suspicions start to get raised?
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29 comments
so she can not pay taxes.
Ask the bank, they tell you directly. Deposits more than a certain amount would raise alarms. What her friends can do is add her to their account as a second account holder. They don't have to give her money.
I assume you will not be depositing money in her account or adding her name to your account. Right?
Sam
What you're describing will set off every red flag in the book. Depositing that much money and then withdrawing it in a short time period would appear to be laundering money and would be investigated by the FBI. Tell her not to do it.
The bigger problem is something called "structuring." There are various currency transaction reporting rules that all financial institutions must follow. You ask if there is a threshold amount above which suspicions would be aroused. The short answer is no. While any deposit 10k and above is subject to reporting, the bank may nonetheless report any suspicious activity. I do now know what standards they might use; the standards might vary bank by bank.
I don't think you're suggesting your friend is doing anything illegal, but there has to be an easier way to do this.
And yes, she is jeopardizing her student visa status by working, even if only occasionally.
From the University of Illinois web page:
"If the student will provide funding from personal funds, a Bank Statement with sufficient funding for at least one year’s total cost is required. Please refer to the PDF of the Declaration and Certification of Finances form for specific expense amounts."
I own a rental property and one of my relatives lives in it and doesn't always pay rent. The months that my relative doesn't pay rent are technically a gift according to the IRS's tax rules. If my rental property was a lot nicer than it is and my relative went a year without paying me rent, they'd be required under law to pay income taxes on the amount of rent which they would have otherwise paid. Since the total yearly rent is under $4,000 neither one of us has to worry about that clause in the tax code.
Besides, that money may well disappear.
See comment in the other thread.
I would be more concerned about her "friends" than the stripper. The (pathetic loser) friends put $35 K in her account, and she flies back to Scamastan and is never seen again.
However I will just point out the obvious, this is a scam. I've been to grad school, and I've worked in grad admissions, and I can assure you no reputable school will ask for bank statements to verify ability to pay. They might ask to verify that you're broke and qualify for aid.
The "attempt to fool" here deals not so much with the IRS (at least no more than any other stripper, or waitress for that matter, who does not report all income) but with the school. As Motorhead mentioned, it is most likely b/c she is foreign that they require proof of funds. So she would need to get the cash together to gain admittance to the school, but then would work while going to school to actually pay for it (as I'm sure a lot of us had to do). My hope with this thread (and you guys have given a lot of great info) was just to keep her from doing what she thinks is a good thing (being able to go to grad school) but that would cause her much more grief down the line.
Forty years ago when I was in college, we would all drain our checking accounts and go to the County food pantry bearing our "proof" of poverty. We got lots of beans, rice, powdered milk and processed cheese for our efforts.
IMO this is very short-sighted thinking on the part of these universities. So many of these bright students remain in North America after graduation and contribute so much more in taxes in a lifetime in our economies than they ever took out of our education systems during their formative years. The cost-benefit calculation is skewed mightily in our society's favour.
As for the scheme proposed in this topic? Pure idiocy.
And, even though a gift tax return is due in each year in which gifts exceed 13k, actual tax isn't during until the lifetime exclusion of $1 million
This all illustrates how complicated the matter is.
Anything that involves bank accounts and strippers is automatically a red flag!
The only way this girl would get "caught" is if she's already had probs here and is on someones radar OR if she is from a country the US has bad relations with.
The proposed idea is stupid but don't give the US govt too much credit. 35k for an internationl student to be moving around is routine.