Under the federal code, the phrase “currency violations” describes a number of crimes under the law. Because the term covers such a broad area, the concept can get confusing. So let's clarify some issues with a brief FAQ….
What crimes are considered “currency violations”?
Currency violations, a category of “white collar crimes,” are those crimes relating to monetary transactions. These include counterfeiting, forgery, fraud, money laundering, tax evasion, violation of currency reporting laws and regulations (e.g., hiding offshore bank accounts or failing to declare currency to customs officers), and wire fraud.
Are currency violations a serious crime?
Yes, currency violations are taken very seriously. They can be prosecuted as felonies, punishable by financial penalties and prison terms. For example, evading reporting requirements can result in a possible ten-year prison sentence and a fine of up to $500,000. It's worth noting that these charges are often included against those who are alleged to have committed other crimes, such as drug smuggling.
Are tax evasion and money laundering connected?
According to the Internal Revenue Service (IRS), tax evasion and money laundering are “closely related.” That's because the tools of tax evasion are often used in money laundering: i.e., hiding money's sources by using multiple bank accounts, wire transfers, and placing money in offshore accounts. Therefore, the IRS considers money laundering statutes as one of its primary tools to combat tax evasion.
I heard currency violation cases are related to terrorism. Is that true?
Yes and no. Of course, not all currency violations are connected to terrorism. However, some laws prohibiting currency violations (such as reporting requirements) are intended to reveal how terrorist organizations finance their operations. Therefore, investigation of currency violations is one of the ways that the IRS becomes involved in terrorism investigations.
If you are concerned about IRS currency violations, don't wait. Contact an attorney who specializes in tax law to review your potential liability. If you need help, call Senior Partner, Tax Controversy Attorney, and former IRS attorney Brandon A. Keim at (602) 200-7399 or contact him online to discuss your options.