December 17, 2008
FinCEN Announces Final Rule on Currency Transaction Reporting Exemptions
On December 4, 2008, the Financial Crimes Enforcement Network (FinCEN) announced the submission to the Federal Register for publication of its final rule that simplifies the current requirements for depository institutions to exempt their eligible customers from currency transaction reporting. In finalizing and issuing the rule, FinCEN is amending, in accordance with the Government Accountability Office's (GAO's) recommendations, FinCEN's independent research, and the public comment process, the Bank Secrecy Act (BSA) regulation that allows depository institutions to exempt certain persons from the requirement to report transactions in currency in excess of $10,000. As the GAO highlighted in its February 2008 report, Currency Transaction Reports (CTRs) provide unique and reliable information essential to supporting investigations and detecting criminal activity.
The final rule makes the following changes to the current CTR exemption system:
- Depository institutions will no longer be required to review annually or make a designation of exempt person (DOEP) filing for customers who are other depository institutions, U.S. or State governments, or entities acting with governmental authority.
- Depository institutions will be able to designate an otherwise eligible non-listed company or a payroll customer after either two months time (previously twelve months) or after conducting a risk-based analysis of the legitimacy of the customer's transactions.
- FinCEN's guidance on the definition of "frequent" transactions will be changed to five transactions per year instead of the current eight transactions per year.
- Depository institutions will no longer be required to biennially renew a designation of exempt person filing for otherwise eligible Phase II customers, but an annual review of these customers must still be conducted.
- Depository institutions will no longer be required to record and report a change of control in a designated non-listed or payroll customer.
The new rules take effect 30 days after publication in the Federal Register. The final rule as submitted to the Federal Register is posted on FinCEN's Web site.
IRS Announces 2009 Standard Mileage Rates
The Internal Revenue Service recently issued the 2009 optional standard mileage rates used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.
Beginning on January 1, 2009, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) will be:
- 55 cents per mile for business miles driven
- 24 cents per mile driven for medical or moving purposes
- 14 cents per mile driven in service of charitable organizations
The new rates for business, medical and moving purposes are slightly lower than rates for the second half of 2008 that were raised by a special adjustment mid-year in response to a spike in gasoline prices. The rate for charitable purposes is set by law and is unchanged from 2008.
The mileage rates for 2009 reflect generally higher transportation costs compared to a year ago, but the rates also factor in the recent reversal of rising gasoline prices. While gasoline is a significant factor in the mileage rate, other fixed and variable costs, such as depreciation, enter the calculation.
The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile. The rate for medical and moving purposes is based on the variable costs as determined by the same study. Independent contractor Runzheimer International conducted the study.
A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for any vehicle used for hire or for more than four vehicles used simultaneously.
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates. Revenue Procedure 2008-72 contains additional information on these standard mileage rates.
U.S. Treasury's Go Direct Campaign Urges Credit Unions to Promote Direct Deposit
The U.S. Department of the Treasury's Go Direct campaign is announcing a new recognition program for credit unions that go the extra mile in promoting direct deposit to senior citizens, people with disabilities, veterans and other members who receive federal benefits. The six-month Go Direct Community Ambassadors Program launches in January and is aimed at small- and medium-sized financial institutions. The program is simple to implement and provides credit unions with a flexible way to demonstrate their commitment to their member community's financial health while gaining recognition from Treasury's Go Direct campaign. All credit unions are invited to register online at www.GoDirect.org by January 31, 2009.
Credit unions that successfully participate in the Community Ambassadors program will receive a letter of recognition and certificate from Go Direct. Participating credit unions will be offered a variety of options for sharing information about the benefits of direct deposit with their members, including ordering free Go Direct materials.
The simple act of switching to direct deposit can have a meaningful, positive impact on the lives of members and on the community. Consider the following:
- Direct deposit is safer and easier than paper checks - in fact, when there is a problem with a Social Security payment, nine times out of 10 it is with a paper check, not a direct deposit payment.
- Direct deposit also provides "green" benefits by reducing the paper and energy required to distribute checks.
- And direct deposit saves taxpayers money. Since it was launched in 2005, the Go Direct campaign has generated more than two million enrollments in direct deposit representing significant savings to taxpayers in printing, mailing and other costs.
For more information about the Community Ambassadors program or Go Direct, call 952-346-6055, or visit www.GoDirect.org.
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