I gave my son and his Girlfriend $31,300 to pay off bills. How does the IRS find out ?

Question

I deposited the money in my sons account. I didn't know when I did this I would have to pay tax or I wouldn't have given him so much right now. Just wanted to know whether IRS monitors bank accounts. I received 222K in total from sale of a house.

I did not say I was not going to pay taxes! Just want to know how IRS finds out about personal bank transactions.

Answer 1

I am not sure that the IRS specifically finds out about these. Banks are required to report large dollar transactions as part of drug money and terrorist activity. This has been in effect for years. Basically, they are looking for patterns of large deposits.

To avoid any potential issues, you can create a loan document and just have it on hand if it is questioned.

Answer 2

Like it has been said, a large amount of transaction is always reported. Frequent transfer are sometimes also reported.

The banks regulary give information to the IRS.

There's NO personal bank transactions.

This happened everywhere around the world, those who don't do it are labeled 'uncooperative'.


If you don't want to be bother by the IRS in the future, then do these things:

- Give it by cash and don't deposit it to any bank

- Pay the bills by yourself

- Randomly spread the transfer using multiple accounts under many different names. More money, more accounts.

- Give items as gifts, only to be resold later.

- Buy items for large amount of money. Auctions are usually used to transfer large amount of money.

Drug dealers, other criminal organizations, and so on usually do those things avoid the check, and these methods regulary worked unless an international database is used to crosscheck information.

If these methods worked, then why the checks were done? The IRS want to get all, no exception.

Answer 3

Use to be and maybe still is that when you deposit $ 10,000 or more the bank notifies the IRS of this transaction. ie: this is how they catch some drug dealers, please don't get me wrong your not a drug dealer.

Might be you need to talk this situation with your Income tax person. Get someone better than your local H & R Block unless there very qualified. You could show it as your loaning your son this money then when you don't receive interest there is no taxes owed.

If you show it as a gift your son would owe taxes and may defeat the what you were trying to do...

Good luck...

Answer 4

They may find out because your son probably deposited the money in his bank account.

However, you are allowed to give $10,000 a year per person as gifts, You can give more and I believe this will reduce a lifetime gift allowance you have. If not, you are responsible for the gift tax.

Call your accountant to clarify whether you have to file a gift tax return this year.

Answer 5

I hope you know that Bush's spies are watching answers here. Don't be surprised if you get an IRS letter in a couple months. Between the extra tax, the penalties, the fines and the lawyers, you will be borrowing from your son next.

Answer 6

So you do or do not want the IRS to know? If you do and you had them sign something for the loan I am sure you can submit some IRS form along with a copy of the loan agreement.

Answer 7

You can give up to $12,000, or $24,000 if you are married. I believe the bank reports transactions over $10,000 to the IRS.

Answer 8

they can see their debt to income ratio and determine that they dont have enough $$$ on their own to pay so much $ out & it looks like illegal $, and the irs can question where the $ came from.

Answer 9

While the amount you gave is above the limit, you can gift your son up to 11K tax free, and his girfriend another 11K tax free....

the gift tax will apply to only $9K leftover....

Answer 10

Both of you have to file it or you could get in trouble. Tell whoever usually does your taxes and they'll do it for you.