Thanks Robert.

That has alleviated the bulk of the stress I was feeling. It makes a lot of sense when you put it into that perspective. I will put this behind me and learn from it.

I can absolutely guarantee that you will not be receiving a letter from the CRA anytime soon, or later, for that matter. There is no audit trail for the CRA to pursue and there is no indication as to where these funds were obtained. The CRA would first have to determine that this amount represented taxable income as opposed to non-taxable income. Without knowing the source of these funds, that becomes an impossible task. These funds could have been obtained from a miriad of sources including gambling, savings, inheritance, sales of personal assets or a return of loaned monies.

When the CRA assesses a situation as to whether to pursue it or not, they take into consideration the probability of obtaining additional revenue given the amount involved, and the time, effort, expense and personnel required to achieve the desired result. Their audit and collection priorities are based on these factors. With all due respect, you are just a small fish in a large pond and as the saying goes, they've got "bigger fish to fry". Put this behind you, get on with life, and enjoy it like it was meant to be.

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Educating one Consumer at a time

Duly noted.

Before I deposited the money I was hearing all kinds of mixed answers to the question of whether or not they report deposits over $10,000. I even called client services whom told me that they've never even heard of such a reporting procedure. Now I realize they knew little to nothing.

I feel stupid right now. I feel as if I caused unnecessary attention. The bank manager was explaining the form to me and told me that it would not trigger a personal audit or anything of the sorts. Now I am learning that it would most likely do just that. Not that I have anything to hide. I just don't to be forced to pay taxes on that deposit because I can't afford it.

In retrospect, I should have deposited the money in stages. Or half directly to the institution of the loan, and the other half into my personal bank account (separate institution).

This is really bugging me. What can I expect now? Do I just have to wait around for a letter in the mail asking me about it or telling me I'm being audited. I don't know. I wish I could take my money back and do it properly.

Upon reading your original post, it was my understanding that you wished to repay your auto loan directly. I was not aware that you wanted to make a deposit first and then redeem the loan from your bank account. Had I known that that was the procedure you wished to follow, then I would have informed you of the Anti Money Laundering Form that you would be required to sign. If the bank does submit this form to the CRA, I'm sure that they will note on the form that this deposit was made for a repayment of an auto loan.

By far, the vast majority of consumers who repay debt do so by transferring funds that are currently in a bank account or make a payment directly from their own source of funds. I will admit that it is unusual to walk into a bank with $10,000+ tucked away in your back pocket in order to repay a debt but it wasn't that many years ago when older people paid their bills and debts this way. They had a distrust for banks and kept their money at home.

One more comment. There is a Golden Rule in Banking. Never maintain an account at a financial institution in which you have a credit card, personal loan, auto loan, line of credit or a mortgage.

REASON

In the event of default of a debt, the lending institution can then exercise its "right of set-off" and withdraw funds from your account automatically without informing the debtor in order to satisfy the default. Always keep your accounts at another bank ( not branch ) or at another credit union.

There is no legal requirement that you must maintain an account at a financial institution from which you have obtained credit, a loan or a mortgage..

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Educating one Consumer at a time

I went to the bank today to deposit the cash I had saved and because it was over $10,000 they had to submit an Anti Money Laundering form on behalf of the deposit. They asked the origins of the money by which I stated cash savings.

I thought this was an urban legend?

I could have deposited half, and came back the next day and did the rest to avoid it but they told me that doing it at once would not result in an audit or investigation.

I dont know who/what to believe any more.

EDIT: I guess I should have been more clear in my original post by which I needed to deposit the cash first before making the payment.

Robert,

As always, a great resource you've been. Thank you for the information.

I will pay off that loan with confidence now.

Any stories that you have heard about paying amounts in excess of $10,000 to a bank and in turn being reported to the CRA is an Urban Legend and is totally false. Hundreds, if not thousands of payments are made every day all across Canada by people paying their credit card bills, bank loans, auto loans, lines of credit and mortgages. Take that rumour with "a grain of salt".

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Educating one Consumer at a time

Good Day,

I have a really high interest rate on my auto loan. It was originally provisioned by VFC inc. and they had since been purchased by TD to form TDFS.

Anyhow... the balance of my loan is somewhere around 13-14k and I got the loan about 14 months ago. Since then I have been doing side jobs (mostly computer tech work) for cash and I have managed to save up enough money to pay off the loan in full.

I had heard that any transaction over $10,000 made through a bank is to be reported to the CRS. I do not want to cause an audit.

Is this true? And if so, can this be avoidable by making a few installment payments as opposed to one? If I can make installments to avoid this, how far apart can the installments be?

Thank you very much for your attention and potential advice.

Cheers.