Accepted Answer

Hello again Diane,

First of all, the IRS does not track your bank account activity. The only time that the IRS might actually look at your bank activity is if you were to happen to be selected for an audit, and the examiner thought it necessary to examine your bank records. This does not happen in most cases. But even if such an event were to occur, the fact that you can show you inherited this money, and you used it to pay legitimate bills that you owe, there is nothing illegal about that, and you would have no problems with the IRS.

High activity in your account is not reported to the IRS. The only time that a bank reports suspicious activity to the IRS is if someone makes a CASH deposit of $10,000 or more in one transaction. Deposits that you make in the form of checks, or bills that you pay in the form of checks, are not reported to anyone.

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Thank you Diane

Expert:	Merlo
Pos. Feedback:	99.8 %
Accepts:
Answered:	11/2/2009

Accountant

25+ years tax consulting. Specializing in returns for US citizens living abroad