http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Money-Services-Business-MSB-Information-Center
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Money Services Business
As a general rule, businesses offering check cashing, money orders, travelers checks, money transfers, foreign currency exchange, and pre-paid access (formerly stored value) products are Money Services Businesses and are subject to Bank Secrecy Act reporting and recordkeeping requirements. For more information, visit Am I an MSB?
Registering with the Federal Government
With few exceptions, each money services business must register with the Department of the Treasury by electronically filing FinCEN Form 107. A person that is an MSB solely because that person serves as an agent of another MSB is not required to register. Registration of an MSB is the responsibility of the owner or controlling person of the MSB and must be filed by the end of the 180-day period beginning on the day after the date the MSB was established.
Developing an Effective AML Program
Each MSB is required by law to have an effective anti-money laundering (AML) program. An effective program is one that is reasonably designed to prevent the money services business from being used to facilitate money laundering and the financing of terrorist activities. Each program must be commensurate with the inherent risks, must be in writing and must:
Incorporate policies, procedures and internal controls reasonably designed to assure compliance with the BSA.
Designate a person to assure day-to-day compliance with the BSA.
Provide education and/or training of appropriate personnel.
Provide for independent review to monitor and maintain an adequate program.
Reporting Cash Transactions
When an MSB receives more than $10,000 in one transaction or a series of related transactions, while conducting their trade or business, a Currency Transaction Report (CTR), FinCEN Form 112, must be filed electronically by the covered MSB. For information on the electronic CTR, a recorded version of a FinCEN webinar (October 2, 2012) and associated presentation materials are available for review.
Reporting Suspicious Activities
When the MSB knows, suspects or has reason to suspect that the transaction or pattern of transactions is suspicious and involves $2,000 or more, a SAR FinCEN Form 111 must be filed electronically by the covered MSB. For information on the electronic SAR, a recorded version of a FinCEN webinar (September 18, 2012), and associated presentation materials are available for review.
Identity Theft and Fraudulently Obtained Tax Refund Checks
Some individuals have filed fraudulent tax returns to claim tax refunds using names and Social Security numbers they have stolen from other taxpayers. These identity thieves may use check cashers to cash the tax refund checks possibly because they believe banks are more likely to closely scrutinize the transaction. The checks will be made payable in the name of the taxpayer who has had his identity stolen, not the real name of the person who is trying to cash the check. For check cashers, a list of tax refund check fraud indicators and additional details on the actions check cashers should take are available.
BSA E-Filing
The BSA E-Filing System website supports electronic filing of Bank Secrecy Act forms (either individually or in batches) through a FinCEN secure network. BSA E-Filing provides a faster, more convenient, more secure, and more cost-effective method for submitting BSA forms. Effective April 1, 2013, financial institutions, which by definition includes money services businesses, must now use the new FinCEN reports available only electronically through FinCEN's BSA E-Filing System. Financial institutions that continue to file mandated reports in paper format will not have met their Bank Secrecy Act (BSA) reporting requirements and may be subject to civil money penalties. FinCEN may reject any mandated reports filed in paper format and return them to the filing institution.
For more information about BSA E-Filing, please review the E-Filing Section on FinCEN's website. You can also contact the BSA Regulatory Help Line at 1-800-949-2732. For technical questions or assistance, contact the BSA E-Filing Help Desk at 1-866-346-9478, or at [email protected].
Other BSA Reporting Requirements
Report of Cash Payments Over $10,000 Received in a Trade or Business (Form 8300): For those trade or businesses not required to maintain an AML Program under the BSA, the receipt of cash payments exceeding $10,000 from one buyer as a result of a single transaction or two or more related transactions must report the transaction(s) by filing Form 8300 (PDF). Forms 8300 may be filed electronically or may continue to be filed by paper with the IRS.
Report of Foreign Bank and Financial Accounts (FBAR): U.S. persons having a financial interest in, or signature authority over, a foreign financial account, including a bank account, brokerage account, mutual fund, trust, or other type of foreign financial account, may be required to report annually by filing electronically FinCEN Form 114, Report of Foreign Bank and Financial Accounts (FBAR), formerly TD F 90-22.1. Electronic filing the FBAR, using the BSA E-Filing system, became mandatory on July 1, 2013.
Report of International Transportation of Currency or Monetary Instruments (CMIR): Each person who physically transports, mails, or ships currency or monetary instruments in excess of $10,000 at one time out of or into the United States (and each person who causes such transportation, mailing, or shipment) must file a FinCEN Form 105 (CMIR).
Bank Secrecy Act (BSA) Resources
Online:
FinCEN.gov
