IRS, FinCEN to Review Letters Sent to Targets of Suspicious Activity Reports

By Matt Squire

The U.S. Internal Revenue Service and the Financial Crimes Enforcement Network have created a working group to examine an IRS criminal investigation division practice of sending letters to bank customers identified in suspicious activity reports (SARs). The letters, which typically explain Bank Secrecy Act requirements to recipients and notify them that they may have broken the law, don't disclose that SARs have been filed. However, the practice has raised the hackles of banking professionals, who say such correspondence can tip off sophisticated clients that a SAR was filed and put reporting institutions and their employees at risk. An IRS spokeswoman...