Spending $250K for Centurion, How About IRS? Large Cash deposits out of your league?

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Spending $250K for Centurion, How About IRS? Large Cash deposits out of your league?

Postby boncovi » Sun Aug 15, 2010 4:35 pm

I'm a Green Amex charge card member for 6 months now.

I have spent $60K so far. Used for my expenses, bills, friends purchasing stuff over the internet, college tuition for another friend etc. etc.

I work in a retail business, electronics field, making $60k/yr.

We have a customer who buys stuff in quantities and somehow sells them to other countries. He always deals in cash.

He can easily spend $30k in a week, only with us. I know he shops around and buys many stuff, computers, cameras, ipads etc. from electronics stores, apple store etc. all legit places.

He's cool and we sit down and drink beer from time to time after work.

I know if I go and ask him if I could charge his purchases from merchants except where I work on my Amex and he reimburses me, he will say "no problem".

My question is, let's say I start charging his purchases on my card, will I have any problems with IRS or Police?

I checked my Amex spending ability and it's good up to $30k a month. I spend $25K a week for him, then he gives me $25k cash. This money has to go into my bank account. But how?

Cash transactions over 10K has to be reported by the bank. I know if you go and deposit 9K every other day, you may receive a letter from the bank telling that you're trying to avoid $10k threshold, be careful.

Authorities come knocking on your door and searching your house to see if you're selling drugs, or do you get audited by IRS?

On the other hand, how do you get taxed on personal buying/selling activities? Let's say I buy a single item for $9,000. I post an ad on craigslist, sell it for $9,000. I get paid cash, it's under threshold, and I did not make any income because I sold it at no profit, so nothing to get taxed. I do this 300 times and flipped $270,000 in cash, all deposited to my checking account in cash and transferred to Amex to pay the bill. How about that? Technically, I did not go above $9K at all, and I did not make any income.

In extreme cases, if someone comes to your door, IRS or Police, asking about the transactions and you show them the invoices / credit card statements and tell them you sold them locally for cash. Still trouble?

P.S., I am just curious about what would happen. I don't have an extreme lifestyle like flying everywhere, staying at hotels. I also think $5000 + $2500 annual fee is steep and I wouldn't pay that by making $60k/yr. But too much brainstorming brought up these questions.

Thank you for replies.

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Postby Mogul of Pineapples » Tue Aug 17, 2010 4:34 pm

I would be tempted to do the same but I can see why this could cause problems.

I think you need to ask yourself, is an IRS audit or worse a price you are wiling to pay to get the Centurion? If it was me I would say it's not worth it. Even though this situation is truly innocent I would imagine the IRS would be skeptical of your excuse of funneling $25k a week just to get approved for a credit card.

The other idea of the $9k deposits would also draw some eyes to your account. I read an article not too long ago that said banks report suspicious activity like that when it looks like there are a frequent deposits to avoid the reporting limit.

My last question is this guy doing something legit? Why does he only deal in cash?
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Postby gangof4 » Tue Aug 17, 2010 8:34 pm

Mogul: Maybe he's on Social Security? :)

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Postby jeffysdad » Thu Aug 19, 2010 6:12 pm

IMO, your friend has to be doing something shady; don't know what, but it's shady. While you may want a Centurion card, you almost certainly don't need one, if I may say so. My income isn't much different from yours and I would have no use for a C card. Also, even if you get invited to be a C card member the annual fee is extremely high; $4,000 or so, if I remember something I read about it correctly. Someone please correct me if that's wrong.

If you are seeking the status of a C card, it's worth noting that there are very many rich people in the world who consider such things to be truly vulgar. Most wealthy people don't want to draw attention to themselves; contrary to what the behavior of celebrities would lead one to believe.

If you must have a status card, get the platinum.
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Postby Cucumber » Mon Aug 23, 2010 7:51 pm

That dude's business sound sketchy!!! :eek: I would not get involved any more with him if I were you!
Stop talking crap about him!

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Postby bravo4 » Tue Jan 25, 2011 8:56 pm

I think as long as you have a paper trail, you should be OK, but you should talk to an accountant and/or attorney to be certain. It goes similar for people who spend a lot for business travel and get reimbursed by their company.

If anyone can afford a black card and really wants one, send me a PM with your email address as I might be able to help...

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Postby cashnocredit » Fri Jan 28, 2011 10:18 am

This can easily fall under moneylaundering statutes. The 10k issue is just a reporting issue but where one conducts large scale purchases for a third party, especially where the third party does some sort of foreign business, one easily slips into the purvue of authorities looking for other illegal activity. Money laundering is a fairly easily mechanism for getting at this. It does not even need to be in high amounts. I was a juror on a RICO trial where money laundering was an element of the crime. The amounts involved were only in the thousands but it attracted attention because of other elements: murder, drugs, and such. (murder isn't usually a federal crime, only as part of a consipracy).

What you may not know is that there are lot's of high tech products that may not be sold overseas without a special license. Technically, some products may not even be sold to non citizens in a store. For a fairly obvious example, a store cannot sell night vision equipment to a foreign client but may sell it over the counter to a US citizen. It's even a felony for that citizen to carry it in their luggage overseas as a tourist.

This smells, and I would have nothing to do with it, let alone use a CC to run this guys purchases through. Stay far away. IRS audits are the very least of the thicket you might find yourself in.

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Postby PlatinumAMEX94 » Mon Jan 02, 2012 2:52 am

You will get audited and they will report your lifestyle exceeds your reported income. Plus you won't get approved with AMEX until you have established a history with them. Just because you have a good job today may not be true tomorrow.
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Postby DoingHomework » Tue Jan 03, 2012 4:12 pm

Wait a minute...

Your friend's business certainly sounds shady. But if he has a legitimate business and is currently dutifully filing his currency transaction reports (and your company is as well), then there is nothing illegal about what you want to do. As long as you file your paperwork and are not involved with illegal activity you are fine.

The CTRs (currency transaction reports) are simply paperwork that must be filed. They might trigger scrutiny of your activities but if you are not doing anything wrong then there is no reason to worry about people watching.

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Postby 2percentPlus » Tue Jan 03, 2012 4:31 pm

Why do you want to do this again? To try to get a Centurion to flash around wherever you go?

First of all, purchasing product with cash is not illegal. If he is taking the product to another country and selling it for cash, that's one thing. If he is selling it and shipping it, or whatever he might be doing then this is a business and he needs to report the income.

If you start purchasing his product and taking his cash, then you are running a business. You report the income from him, and the expenses for what you paid, and income tax on the profit.

Spending $30,000 a week in cash would probably indicate to many, including banks and the IRS, that something needs to be investigated whether it is legal or not.

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