Many taxpayers and business owners assume that “staying under $10,000” keeps cash deposits off the government’s radar. Federal law makes that assumption dangerous. Banks must file a Currency Transaction Report (CTR) when they process more than $10,000 in currency in a single business day for or on behalf of the same person, and the rules require aggregating multiple related cash transactions when the institution knows that they involve the same person. When someone intentionally breaks up cash deposits to prevent reporting, federal law can treat that conduct as “structuring,” a felony that can carry prison time and significant fines, and it can also expose the cash to forfeiture risk, particularly when the government ties the cash to an illegal source or another criminal violation.
This topic often intersects with IRS enforcement because structured deposits frequently appear in the same fact patterns as unreported receipts, payroll skimming, “off-book” cash businesses, or post-event attempts to sanitize records. IRS Criminal Investigation (IRS-CI) publicly reported that it referred 2,043 cases for prosecution and achieved an 89% conviction rate in FY 2025. Once the government views your deposit pattern as intentional evasion of reporting rules, your risk profile can shift quickly from a bank compliance issue to a life-altering criminal tax and financial crime problem.
Why Your Bank Reports Cash Activity and Why Deposit Patterns Matter
Federal law requires financial institutions to report certain currency transactions to the government, and the CTR framework drives much of the risk in “structured deposit” cases. A bank generally must file a CTR when it conducts a transaction in currency of more than $10,000 on any given business day. The rules require the bank to treat multiple currency transactions as a single transaction when the bank knows that the transactions occur by or on behalf of the same person and total more than $10,000 on the same business day. In practice, this means that splitting $12,000 into two deposits does not “avoid reporting” if the bank recognizes the linkage. It also means that repeating a pattern of near-threshold deposits does not stay invisible. It creates a pattern that can draw elevated compliance scrutiny and, in the wrong posture, criminal interest.
You should also understand what you will not see. Banks typically do not notify customers that they filed a CTR, and banks often will not discuss internal compliance decisions with you. When a bank sees activity that appears designed to evade reporting, it can escalate internally. That escalation can include account restrictions, account closures, or referrals into law-enforcement pipelines, depending on the overall fact pattern. You can reduce your exposure by treating your cash-deposit behavior as evidence-sensitive from the outset, rather than as a game of thresholds.
What “Structuring” Means Under Federal Law, and the Most Common “Red Flag” Patterns
Federal law prohibits structuring transactions “for the purpose of evading” CTR reporting requirements. The statute also criminalizes attempts to structure and certain conduct designed to cause a financial institution to fail to file a required report. In other words, the government does not need a successful evasion to charge structuring. It can focus on intent and pattern.
Many people learned about structuring through the Supreme Court case Ratzlaf v. United States (1994), which addressed the meaning of “willfully” in earlier versions of the law. Congress amended the statute after Ratzlaf, and current law prohibits structuring conducted for the purpose of evading the CTR reporting requirements.
Common “red flag” patterns that frequently appear in structuring investigations include the following (these examples do not prove a crime by themselves, but they should trigger immediate caution):
- Repeated cash deposits just under $10,000, especially when the pattern tracks the business’s revenue cycle.
- Multiple same-day deposits at different branches or multiple deposit channels that appear designed to avoid aggregation.
- Cash deposits are split among related accounts, related entities, or family members where the timing and amounts suggest a single source.
- Statements to bank personnel that show reporting avoidance motives, such as “I do not want a report filed,” or behavior that suggests you designed deposits around reporting.
You also need to separate bank CTR reporting from a different but related cash-reporting regime. Businesses that receive more than $10,000 in cash in a trade or business generally must file Form 8300 (or satisfy the applicable reporting rules), and federal law separately prohibits structuring cash payments to avoid that reporting requirement. A taxpayer can trigger exposure from the “deposit side,” the “cash receipt side,” or both, depending on the facts.
Why Structuring Can Become a Prosecution Case, and What the Penalties Look Like
Federal law treats structuring as a serious criminal offense because it targets the integrity of the reporting system that helps regulators and law enforcement detect financial crimes. The core structuring statute provides felony penalties, including imprisonment and fines, and authorizes enhanced penalties in aggravating circumstances. For example, the statute provides a higher maximum term when the structuring occurs as part of a pattern of illegal activity involving more than $100,000 in 12 months.
Structuring cases also carries real forfeiture risk. Federal law authorizes forfeiture tied to structuring violations, and Congress added necessary guardrails for certain structuring-related seizures in response to concerns about abuse in prior years. For many taxpayers, forfeiture risk feels more immediate than the threat of prison because the government can move quickly in money-trail investigations.
Finally, structuring often does not travel alone. When the government believes the cash reflects underreported receipts or other tax noncompliance, it can layer tax crimes (for example, tax evasion or false return theories) on top of the Bank Secrecy Act conduct. IRS-CI describes itself as the only federal law enforcement agency authorized to investigate federal criminal tax violations under the Internal Revenue Code. IRS-CI’s published statistics underscore the practical point: once a case reaches the prosecution pipeline, you face a materially elevated conviction risk.
Defense Steps that Reduce Damage and Keep a Cash-Deposit Issue from Turning into a Criminal Tax Case
When you suspect that a bank, the IRS, or another agency is scrutinizing your cash deposit pattern, you should treat the issue as evidence-sensitive immediately. Start with disciplined containment. Do not attempt to “fix” the problem by changing deposit behavior in a way that looks reactive or staged. Do not attempt to “clean up” records. Do not destroy documents. Those actions can create separate criminal exposure and can turn a defensible situation into an obstruction narrative.
Next, get control of the facts before you communicate. A structured-deposit investigation often turns on what the government believes you intended and what your records show about the cash’s source, the business’s cash-handling practices, and the accuracy of your tax reporting. You should gather records in an organized, defensible way and develop a coherent, document-supported explanation for legitimate cash sources. You should also prepare for an everyday reality: investigators often corroborate your story through third-party records, not through what you volunteer.
If the facts also involve tax reporting issues, you need a coordinated approach that treats the tax and financial-crime exposures as one problem. A misaligned strategy can make you look deceptive even when you are trying to cooperate. That dynamic worsens when you operate in California state, because federal issues frequently create state tax consequences and state-level enforcement attention.
Contact the Tax Law Offices of David W. Klasing if You Are Concerned About Structured Cash Deposits and Criminal Tax Exposure
Contact the Tax Law Offices of David W. Klasing if you deposited cash in a pattern that could look like reporting avoidance, if a bank questioned your deposit behavior, if your account activity suddenly drew heightened scrutiny, or if you fear that unreported receipts or “off-book” cash business practices could cause the government to frame your conduct as intentional. A structuring allegation does not function like a routine civil tax issue. It can trigger felony exposure, forfeiture risk, and a fast-moving investigation track that can become life-altering if you respond casually or inconsistently.
You should also contact us if you need a single, coordinated strategy that addresses both financial crime and criminal tax. Our experienced dual-licensed Tax Attorneys & CPAs handle high-risk civil audits and criminal tax investigations, and we build defense plans that focus on tight control of communications, evidence-sensitive document collection and production, and a coherent fact narrative grounded in records rather than improvisation. When the government assesses intent, you cannot afford casual explanations, unmanaged document production, or contradictory positions across agencies.
If you want an objective credibility check before you retain counsel, you can verify public indicators. The Better Business Bureau lists the Tax Law Offices of David W. Klasing with an A+ rating, and Avvo lists David W. Klasing with a 10.0 rating. Call (800) 681-1295 or use the firm’s online contact options HERE to request a confidential, reduced-rate initial consultation.
