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I'm a US taxpayer (non-resident alien) and I'm being pushed by a friend to do the following:

  1. He will transfer 40k from a US bank account that he owns to my personal account.
  2. I will withdraw this amount and hand it back to him in cash.
  3. He will take this money outside the US.

Now, I know this is a terrible idea, and sounds totally illegal. I will NOT proceed with his plan, but I want to reject his proposal backing up my arguments with IRS information. Is there official documentation that says why this cannot be done?

jlhonora
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3 Answers3

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I would respond to your friend this way: "Either you are planning to do something illegal, in which case I don't want to be involved, or you are planning to do something legal, in which case you don't need me."

Here's Why: What your friend proposes is completely pointless because if the money is legally his to give to you, then it's perfectly legal for your friend to withdraw the $40K from his own bank account and take it out of the country without your involvement at all. As long as he files the appropriate paperwork, he can take as much money out of the country as he pleases. He should be prepared to answer why he's travelling with that much money, but he would have to do that anyway even if you went through with his plan. Note that if you declare the money you are fine, but if you don't declare it and get caught, you will get in trouble, so always declare it!

You are correct to say no to this. The fact that he wants to involve you (or anyone) makes it seem extremely shady.

TTT
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There is no "reason why this cannot be done", but you can tell your friend that these actions are officially shady in the eyes of the US government. Any bank transactions with a value of $10,000 or more are automatically reported to the government as a way to prevent money laundering, tax evasion, and other criminal shenanigans. "Structuring" bank deposits to avoid this monetary limit is a crime in and of itself.

https://en.wikipedia.org/wiki/Currency_transaction_report

David
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Here's what's going to happen:

At the last minute, he's going to "discover" that for some reason first you must send him $10,000. He'll tell you not to worry, as he's still going to send you $40,000... now $50,000. In fact, he's going to tell you that he'll send you $60,000 and tell you to keep the $10,000 as a "finders fee".

Then you will send him, $10,000 and he will walk away with your $10,000. You'll never hear from him again.

This is a very common scam.

The best way to avoid it is not to tell him you won't do it for IRS reasons. The best thing to do is to stop accepting email from him and (optionally) report him to law enforcement.

TomOnTime
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