IRS Bank Reporting: Cash, Crypto, and Foreign Accounts

Your bank reports quite a lot to the IRS, but not everything. What banks report to the IRS falls into a handful of clear categories: the interest and investment income they pay you, cash transactions above $10,000, activity they consider suspicious, payments processed through apps and platforms, and, starting in 2026, digital asset sales. Foreign accounts get reported through a separate track. Ordinary checking activity, wires, ACH transfers, and card purchases are not reported transaction by transaction, no matter the size.

Income Your Bank Already Tells the IRS About

The passive income your bank or brokerage pays you shows up on a 1099 that goes to both you and the IRS. By the time you file, the agency has its own copy.

Interest of $10 or more in a year triggers a Form 1099-INT from any bank or credit union that paid it, covering savings accounts, CDs, and money market accounts.¹ Interest under $10 still counts as taxable income even without a form.

Dividends of $10 or more from stocks or mutual funds land on Form 1099-DIV, which separates ordinary dividends from qualified dividends taxed at the lower long-term capital gains rate.²

When you sell stocks, bonds, or mutual fund shares, your broker files Form 1099-B showing the gross proceeds. For covered securities purchased after certain dates, the broker also reports your adjusted cost basis and whether the gain or loss is short-term or long-term.³ That lets the IRS cross-check the capital gains you report. If your broker doesn’t have a correct Taxpayer Identification Number on file, a portion of your proceeds gets held back as backup withholding, which also appears on the 1099-B and can be claimed as a credit on your return.

Cash Deposits and Withdrawals Over $10,000

Any time you deposit, withdraw, or exchange more than $10,000 in physical cash in a single business day, your bank files a Currency Transaction Report with the Financial Crimes Enforcement Network.⁴ The IRS and other federal agencies can access these reports. Filing is automatic under the Bank Secrecy Act; the bank doesn’t need to suspect anything wrong.⁵

Two details catch people out. First, the threshold applies to combined transactions in the same business day. Depositing $6,000 in the morning and $5,000 in the afternoon at the same bank is treated as a single $11,000 transaction, and a CTR gets filed.⁴ Second, “cash” here means physical currency only. Checks, wire transfers, and card payments never count toward the $10,000 threshold, even at much higher amounts.

Why Splitting Cash to Stay Under the Limit Is Worse Than the Report

Deliberately breaking a cash transaction into smaller pieces to avoid the $10,000 CTR trigger is called structuring, and it’s a federal crime whether or not the underlying money is legal.⁶ Depositing $9,500 on Monday and $9,500 on Wednesday is the classic pattern. Banks train employees to spot it, and structuring alone can lead to criminal prosecution even when the cash came from a completely legitimate source.

A conviction can bring a fine of up to $250,000 and five years in prison, and penalties double if the structuring is tied to another federal crime.⁶ The government can also seize the cash through civil forfeiture before any criminal conviction. A routine CTR filing would have been a paperwork event; structuring turns it into a case.

Suspicious Activity Reports You’ll Never See

Banks file Suspicious Activity Reports with FinCEN when a transaction looks like it could involve illegal activity. A SAR isn’t triggered by a dollar threshold. It’s a judgment call by the bank.⁷ Dollar amounts still matter in practice: banks must file a SAR for suspected criminal activity involving $5,000 or more when a suspect can be identified, or $25,000 or more regardless of whether anyone is identified.⁸

Common triggers include transactions that appear designed to evade BSA reporting, activity with no apparent business purpose, and patterns that suggest illegal source of funds. The bank has 30 calendar days from first detecting the activity to file, extendable to 60 days total if no suspect has been identified.⁷

You will never be told a SAR was filed on you. Federal law bars the bank and its employees from disclosing the existence of a SAR to the person involved in the transaction, and the same prohibition applies to government employees who learn of it.⁹ Breaking that non-disclosure rule carries criminal penalties of its own.

Payment Apps and Online Marketplaces

Payment apps and online marketplaces report the money they process for you on Form 1099-K. Under the One, Big, Beautiful Bill Act, the federal reporting threshold reverted to $20,000 in gross payments and more than 200 transactions during the calendar year. Both conditions must be met before a platform is required to file.¹⁰ Some states set lower thresholds, so a 1099-K can still arrive even if you’re below the federal cutoff.

The number on a 1099-K is gross payments processed before fees, refunds, or chargebacks are deducted.¹¹ That gross figure is what the IRS sees, and it will almost always be higher than your actual income. You reconcile it on your return by accounting for processing fees, returns, and any non-taxable amounts (like reimbursements from friends) that shouldn’t have been included in the first place.

Crypto Sales Starting in 2026

For sales made on or after January 1, 2026, cryptocurrency exchanges and other digital asset brokers must report your transactions to the IRS on the new Form 1099-DA. For covered securities, brokers must report both the gross proceeds and your cost basis, similar to traditional stock reporting on Form 1099-B.¹² A broker for this purpose includes any platform that regularly stands ready to facilitate sales of digital assets on behalf of customers.

Before 2026, most crypto transactions went unreported by exchanges, and the IRS relied largely on taxpayer self-reporting. From 2026 forward, the agency will receive the same kind of detailed transaction data for crypto sales that it has long received for stock sales.

Foreign Accounts

Money in foreign bank accounts gets reported two ways: once by you, once by the foreign institution. The overlap is intentional.

FBAR (FinCEN Form 114)

Any U.S. person with a financial interest in or signature authority over foreign financial accounts must file a Report of Foreign Bank and Financial Accounts if the combined value of those accounts exceeds $10,000 at any point during the year.¹³ The threshold is cumulative. Three accounts of $4,000 each cross it.

The FBAR is filed electronically through FinCEN’s BSA E-Filing System, not with your tax return. It’s due April 15 with an automatic extension to October 15 that you don’t have to request.¹³

FATCA and Form 8938

The Foreign Account Tax Compliance Act works from the other side. It requires foreign financial institutions to identify their U.S. account holders and report those accounts to the IRS. Institutions that refuse face a 30% withholding tax on certain U.S.-source payments, which gives them strong incentive to cooperate.¹⁴

On your side, FATCA also requires you to file Form 8938 with your tax return if your foreign assets exceed certain thresholds. For an unmarried taxpayer living in the U.S., the trigger is $50,000 on the last day of the year or $75,000 at any time during the year. Joint filers get double those amounts. If you live abroad, the thresholds rise to $200,000 at year-end or $300,000 at any time for single filers, and $400,000 or $600,000 for joint filers.¹⁵

Form 8938 and the FBAR overlap but are not the same filing. You may need to file both. The FBAR goes to FinCEN with lower thresholds; Form 8938 goes to the IRS with your return and covers a broader range of assets, including foreign stocks and financial instruments held outside a bank account.

What Your Bank Does Not Report

Routine checking activity is not reported to the IRS transaction by transaction. Paying bills, making debit card purchases, writing checks, and receiving direct deposits don’t generate reports. Wire transfers, ACH payments, and credit card charges don’t create CTRs regardless of amount, because CTRs cover physical currency only. A $50,000 wire won’t trigger a CTR, though the bank could still file a SAR if the transfer strikes it as unusual.

Transfers between your own accounts at the same bank generally don’t create tax reporting events. Personal payments between friends through apps like Venmo or Zelle for splitting dinner, repaying a loan, or sending a gift are not supposed to appear on a 1099-K, which is meant to cover payments for goods and services only.¹¹ If a platform mistakenly rolls personal payments into your 1099-K total, you’ll need to sort that out on your return.

Penalties When Reporting Goes Wrong

Most reporting failures fall on the institution, but some fall on you.

For FBAR violations, a non-willful failure to file can cost up to $16,536 per report. A willful violation can cost the greater of $165,353 or 50% of the highest account balance for each year the violation continues.¹⁶ Criminal prosecution is possible for willful violations. If unreported foreign income leads to an underpayment on your return and the IRS finds fraud, the civil fraud penalty adds 75% of the underpayment to your tax bill.

For information returns like the 1099 series, a financial institution that fails to file correctly faces $250 per return up to $3,000,000 per calendar year, dropping to $50 per return if corrected within 30 days.¹⁷ These figures adjust for inflation.

The practical takeaway: assume the IRS already has a copy of anything your bank or broker sends you, and file consistently with it. Where the numbers on your 1099s don’t match reality, reconcile them on the return rather than ignoring them.

1
Internal Revenue Service. About Form 1099-INT, Interest Income
2
Internal Revenue Service. Instructions for Form 1099-DIV
3
Office of the Law Revision Counsel. 26 USC 6045 – Returns of Brokers
4
FFIEC BSA/AML InfoBase. FFIEC BSA/AML Manual – Currency Transaction Reporting
5
Office of the Law Revision Counsel. 31 USC 5313 – Reports on Domestic Coins and Currency Transactions
6
Office of the Law Revision Counsel. 31 USC 5324 – Structuring Transactions to Evade Reporting Requirement Prohibited
7
Financial Crimes Enforcement Network. FinCEN Suspicious Activity Report Electronic Filing Instructions
8
FFIEC BSA/AML InfoBase. FFIEC BSA/AML Manual – Suspicious Activity Reporting
9
Office of the Law Revision Counsel. 31 USC 5318 – Compliance, Exemptions, and Summons Authority
10
Internal Revenue Service. IRS Issues FAQs on Form 1099-K Threshold Under the One, Big, Beautiful Bill
11
Internal Revenue Service. Understanding Your Form 1099-K
12
Internal Revenue Service. Instructions for Form 1099-DA (2025)
13
Internal Revenue Service. Report of Foreign Bank and Financial Accounts (FBAR)
14
Internal Revenue Service. Information for Foreign Financial Institutions
15
Internal Revenue Service. Do I Need to File Form 8938, Statement of Specified Foreign Financial Assets
16
eCFR. 31 CFR 1010.821 – Penalty Adjustment and Table
17
Office of the Law Revision Counsel. 26 USC 6721 – Failure to File Correct Information Returns