Baker Tilly assists in Bank Secrecy Act and Anti-Money Laundering compliance

Our client’s need

Our client owned and operated an automobile auction whose primary business is the sale of automobiles. Many of its customer’s tendered payment in cash for vehicles won during the bidding. Often times, these cash transactions occurred days or weeks after the auction sale date. The Internal Revenue Code (IRC), section 6050I requires that a trade and business report cash payments in excess of $10,000 to the federal government, including installment payments that cause the total cash received within one year of the initial payment to total more than $10,000. This reporting is conducted using an Internal Revenue Service (“IRS”), Financial Crimes Enforcement Network (“FinCEN”) Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business. The information contained in this form assists law enforcement in preventing and combating money laundering and terrorist financing, amongst other criminal activity. The IRS conducted an examination of the client’s 8300 filings which identified violations of section 6050I. The client despite having built a successful business, had failed to properly implement an effective compliance program. The client came to Baker Tilly as its trusted advisor seeking guidance and assistance in remedying the matter.

Baker Tilly’s solution

Baker Tilly’s Tax Advocacy and Controversy Services (TACS) team practice immediately conducted an assessment of the client’s compliance procedures. After compiling the facts, Baker Tilly developed an Anti-Money Laundering and Bank Secrecy Act, policy and program and advised the client on the implementation of procedures to validate compliance with all legal and regulatory requirements. In addition, Baker Tilly, contacted the IRS to discuss the client’s case. Baker Tilly subsequently drafted a letter presenting the facts and corrective measures taken and requested penalty relief utilizing the procedures available under Treasury Regulation section 301.6724-1.

Results

The Baker Tilly TACS team practice was able assist the client in developing and implementing a robust compliance program to be in adherence with all applicable requirements under the Bank Secrecy Act; Money Laundering Control Act of 1986; USA PATRIOT Act, and its implementing regulations. In addition, Baker Tilly was successful in alleviating the significant penalties and interest which had been assessed against the client.

For more information on this topic or to learn how Baker Tilly specialists can help, contact our team.