- quote -

IRS has really stepped up compliance efforts with respect to
foreign transactions...They are cracking down on banks and
credit card companies to insure that those involved are not
avoiding taxes on income by diverting funds to foreign
countries. So this is probably what is happening with your
particular situation...Go to the IRS website, they have a
lot of information surrounding this issue...

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- quote -

Under certain circumstances the bank may be liable for
fraudulent activities even though you are just the
intermediary (somewhat like a credit card processor). If
the business is important I would provide the requested
documentation and background on the ultimate beneficiary of
the funds. Sorry, I don't specific information about bank
supervision and regulatory oversight on China businesses.

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- quote -

Banks are extremely wary of anyone with wires going through
their accounts on a regular basis, especially to other
countries. Check out msb.gov for more information, your bank
may think you are a money service business. Also check out
fincen.gov

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- quote -

Yes! When i opened the account about 3 years ago I told the
bank what the business does and they were fine with it and
they told me since the funds are being wired to China it is
not one of the countries that are being "watched".

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Erin <christie.wu[at]gmail.com> wrote:

- quote -

By "having a payment processing company" do you mean you are
accepting wire transfers and forwarding the funds to a third
party? Banks have reporting requirements on wire transfers
from certain foreign countries.

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

I have a quesiton and not sure if anyone here can assist. I
have a payment processing company that does the wire
transfers for a chinese based company, sort of providing
Paypal service for them and I take a defined % fee based on
the contracts. I have been doing this for a couple of years
and have been reporting income on my tax returns according
to the contracts. I just got letters from my bank saying
that they want to close out my business accounts as well as
my personal accounts. The letter is from their regulatory
risk management office, and when i called them they were not
willing to provide me with any information. Finally after
talking for a while they requested tax returns and contracts
and all other information from me to establish the
legitimacy of the business.

Has anyone heard about this kind of situation before? Do the
banks report to any federal agencies before they decide to
close accounts or inquiry about the business?

Any information will be appreciated.

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >