For you to avoid penalties and audits from the IRS, you should ensure that your tax returns are as accurate and complete as possible. When the IRS audits your tax returns, they are looking for consistency in your records. You should ensure that the details you record in your tax returns will match those at your bank. A difference in your bank records and your tax returns will raise a red flag with the IRS.
Yes, banks will, at times, report cashed checks from time to time. Highlighted below are the instances in which your bank will report a cashed check.
Instances a Bank Will Report Cashed Checks
• Large check deposits beyond $10,000 – Such a large check deposit in a single transaction has to be reported to IRS. Such reporting intends to help in fighting money laundering. The IRS would then investigate the source of such funding.
• Multiple check payments beyond $10,000 – this is when another person deposits such massive amounts via a check. Such payments into your account will also be reported to IRS.
• Suspicious Activities – your bank is required by IRS to report any suspicious activity they note on your account. This could be large transactions that are unusual in nature and other irregular deposits over a specified period. You will not be able to know when you have been flagged as suspicious by your bank.
• IRS Audit – when IRS is auditing your tax return. Your bank is then obligated to provide reports of your accounts as requested by the authority. It is at this point when your bank will report your check deposits to the IRS.
It is crucial to engage the best check printing companies, as this will minimize the possibility of delays and errors. You risk getting into a struggle with the IRS when your checks have delays or even errors, and you can have damaging effects on the morale of your employees. Hence the need to engage experienced check printers, which offers nothing but the best services.
Your bank will not be required to report all cashed checks but will have to report checks that meet specific criteria. IRS demands your bank to report certain huge check deposits to help combat money laundering.It is also great to engage the best check printing firms as they will offer high-quality services. This will keep them safe from audits from the IRS.