Comment by jdmichal | Hacker News Reader

Comment by jdmichal | Hacker News Reader

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Your real estate example is not a great fit, because real estate transfers are not common. That particular tax-free status on the transfers would probably be best interpreted as a carve out or loophole, with the normal status being that the transactions should be taxed.

On the other hand, depositing money is the normal status. Depositing what amounts to large sums over arbitrary periods of time is also normal. Directly to the point, the limit in place is not a restriction, but merely one that triggers mandatory reporting. The limit is very clear and absolute -- though at their discretion banks may report smaller transactions. Structuring is specifically about avoiding that limit and the accompanying questions and reporting.

So how would you rewrite this law to require mandatory reporting, but also not allow structuring? Because it's not apparently trivial how to achieve that goal any better than they did.

Is mandatory reporting a good idea, though?

I feel like the signal-to-noise ratio must be terrible, especially as inflation gradually lowers the meaning of a $10,000 reporting limit. Selling a used car is enough to trigger a reportable amount of cash.

I'd think what we need is less magic numbers, and instead a better training/reporting ecosystem that insulates people with good intentions but gives them the right tools to identify criminal behaviour.

Actually expecting banks to know their customers at a personal level should be the goal.

I suspect, in contrast, everyone involved likes a fixed 10k limit because it provides a convenient liability hand-off. Compliance can be automated on a much greater level and they can say "we filled out the appropriate forms when required, how were we supposed to know that Hamas Cupcakes Inc was a front?"

The government is well-aware of how inflation erodes reporting thresholds. If you look at the obligation to report non-US bank accounts to FinCEN, they've indexed the penalties ($10,000 per line item) to inflation but not the $10,000 aggregate reporting threshold.

So boiling the frog so that eventually all transactions must be reported?

Agreed on the last bit. Having a clear-cut line where "this must be reported" is I think necessary for liability reasons. There are definitely other transactions that should be reported, in the spirit of the actual AML (anti money laundering) issue. But I think it's necessary to be able to say, in a legal setting, that the required obligation was met and discharged, even if something happened that probably should have been caught.

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