International wire regulations: The IRS, your rights, and rules you should know

6 minute read

If you’re sending a wire out of the US or if you’re expecting to receive an international wire transfer, it’s good to know the regulations that will apply to your transaction.

Understanding this ahead of time means you can rest easy knowing you’ve fulfilled your legal obligations. You’ll also know your rights as a consumer should you hit an issue.

Read on to find out more about the following:

  • What documents, limits, or checks you need to know about before making an international payment
  • The best way to arrange an international transfer
  • What legislation and regulation covers international wire transfers — and how the Consumer Financial Protection Bureau and the IRS are involved
  • How you’re protected as a consumer when making international bank transfers

1 international wire documents checks limits

What documents, checks, or limits should I be aware of before I send money abroad?

If you’re sending money abroad, your bank or money transfer service will need to gather enough information to comply with their own legal obligations. When you open a bank account, the financial institution needs to collect documents to verify your identity. The same regulations require online money transfer providers to do the same if you send money with them overseas.

That means if you’re opening a bank account or are using a specialist transfer provider for the first time, they’ll likely need any or all of the following identifying information from you:

  • A government-issued ID (like your driver’s license or passport)
  • A proof of address (like a recent utility bill or bank statement)
  • The reason for the transfer
  • Your SSN (Social Security Number)
  • Proof that you own the bank account or debit card that you’re using to pay for the transfer

The exact information requested will vary depending on exactly how much you’re sending and which country your money is headed to.

It’s worth noting that you may need to present further documentation if you’re sending over $10,000.

Are there any international money transfer limits?

In most cases, it’s the banks and money transfer services that typically have their own upper limits, which can vary widely depending on the nature of the transfer. Your bank may limit you to transferring $5,000 per day — or may have no limits at all.

To give a picture, TransferWise has an upper limit of $1 million per transfer if you’re sending money from a different country to the US. However, the limits for sending money out of the US will vary a little depending on how you pay for your transfer, and which state you’re based in.

If you’re transferring larger amounts, you might have IRS reporting responsibilities. More on that later in the article.

2 international wire best way to send

What’s the best way to send money internationally?

If you’re sending money internationally, you have plenty of services to choose from.

You could use your regular high street bank, and either call into a branch, or in some cases, make a wire transfer online or by telephone. This can be a fairly costly option, but it’s at least familiar.

There are also online services such as PayPal, or Western Union, which allow international transfers to be made online or, in some cases, in person. However, these services typically come with quite high costs, especially in regards to their poor exchange rates, so it pays to research before you commit.

Alternatively, you could try a specialist provider, like TransferWise, which offers safe, quick, and low-cost international transfers at exchange rates like you find in Google.

And while you’re at it, you might want to check out TransferWise’s borderless multi-currency account. There you can manage, send, and switch between dozens of currencies all from the same account. It may be the solution you were looking for.

3 who regulates international wires

Who regulates international wire transfers?

Following the global financial crisis in 2008, the Obama administration passed a massive reform program aimed at decreasing risk in the financial system. This legislation, passed in 2010, is known as the Dodd-Frank Wall Street Reform and Consumer Protection Act. The act covers a huge range of financial activities and agencies, from regulating certain aspects of Wall Street trading to ensuring that consumers have some basic protection in aspects of their day-to-day banking.¹

One group that was created as a result of the Dodd-Frank Wall Street reform was the Consumer Financial Protection Bureau (CFPB). An agency whose overall job is to facilitate transparency and fair financial practices that protect consumers.²

The Trump administration has aimed to roll back some aspects of the Dodd-Frank framework and limit some of the powers of the CFPB. As of May 22, 2018, the house of representatives has voted to roll back large pieces of the Dodd-Frank act.¹ Which means the information presented here may change in the near future.

What does the Consumer Financial Protection Bureau (CFPB) have to do with international transfers?

CFPB’s mission is to make financial markets more fair for consumers, enforce pertinent rules, and empower consumers to take more control over their economic lives.³ Today, the CFPB is charged with overseeing all international transfers over $15.⁴ More on what rights you have in a minute.

Does the IRS have any specific international wire transfer regulations or rules?

The IRS is primarily concerned with the reporting of international wire transfers valued at $10,000 or more. (Or with related international wires that add up to at least $10,000.) Reporting is generally done by the bank or money transfer service to ensure that transfers aren’t connected to illegal activity, such as money laundering or funding crime.

If you’re transferring large amounts of money in and out of the country, have a bank account abroad with over $10,000 in it, or are sending or receiving gifts with a higher dollar value from overseas, it’s a good idea not only to consult a professional accountant, but to also personally read up on taxes, documents, and fees for wires of $10,000 or more.

4 international wire regulation personal rights

What are my rights and protections as a consumer sending money internationally?

The CFPB sets out the rights and protections offered to consumers sending international remittances in a series of consumer education sheets, which you can download online.³

CFPB notes that, as a consumer, you have the right to see costs before you decide to use a bank or money transmitter. Those costs include:⁵

  1. The amount of money that will be transferred
  2. The exchange rate that will be used — although banks and institutions aren’t required to reveal any profit they make from offering you a poor one
  3. Some fees — not all, though, so we’ll cover that in a sec
  4. Taxes collected by the provider
  5. The sum expected to be delivered abroad — although that amount doesn’t have to include taxes or fees that may be deducted on the recipient’s end

Unfortunately, as you may have noticed from the list above, not all costs necessarily are clearly displayed upfront. The big, not-so-clearly-stated cost culprits generally go to:

  • undisclosed exchange rate spreads —the difference between rates you find on Google and the rate the institution gives you, an average mark-up of 4-6% but some institutions charging up to 10%
  • surprise intermediary and recipient bank fees — charges deducted from the transfer amount by up to 3 intermediary banks as well as the recipient bank, which could range anywhere from $10-$45 per bank

Those costs add up quickly — especially the exchange rate spread. Often, this is the most profitable way for banks or institutions to make money on your international transfer. But never tell you about. That’s what it’s important to know what you’re getting into upfront.

If you do think something went wrong with your wire once you send it overseas, you’ll want to tell the company within 180 days. The company will then need to investigate the matter. If an error was made, you may be able to get a refund or have the transfer sent again.⁵ Although it’s rare that you’ll get this opportunity for a do-over, it’s worth giving it a try if something wasn’t correct.

Whether you’re making an international payment from the US or expecting to receive cash from abroad, you have both consumer rights and responsibilities. It’s helpful to understand in advance how the US legal framework impacts international wire transfers, to make sure you know who to turn to if you have a problem.

A little research in advance is all it takes to find the right option to meet your needs, and ensure you can make a convenient, safe and fairly priced international transfer.


1. (July 28, 2018)
2. (July 28, 2018)
3. (July 28, 2018)
4. (July 28, 2018)
5. (July 28, 2018)

This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended to amount to advice on which you should rely. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax or other professional advice from TransferWise Limited or its affiliates. Prior results do not guarantee a similar outcome. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date.

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