It can be difficult to truly understand just how much money you are spending each year. That’s why I’m always so fascinated by the term “circulating capital.” It’s an idea that’s been around for a long time, but it seems to be gaining a lot of traction lately.
Circulating capital is more of a modern term than it once was. In the 1950s, the term was used to describe assets that were used as a way to hide assets from the IRS. The IRS was trying to confiscate money that was used to pay lawyers, investors, etc.
As a society, we have all used circulating capital to hide income from the IRS. But in the past, its also been used to hide money from other people. Some of this was because of the old banking system that was based on money being sent to someone else, but also because of the way banks were set up. Banks and brokerage houses were designed to make it impossible to trace money going into it.
One of the ways this works is that banks and brokerage houses have a “deposit account” where they deposit money into. Now, imagine that the only way to withdraw money from that account is to make a withdrawal request to the IRS. If you make an initial withdrawal request, the IRS can deny it because the withdrawal request is being sent to a non-existent account. But if you make an additional withdrawal request, the IRS can grant it because the money is still in the account.
The other thing to remember is that the IRS can deny a refund request if the money is in the account. The bank will pay the refund fee, but the money will be refunded if the account is in a safe location.
This is where it gets interesting. The IRS doesn’t use the same system for each individual tax return, so it is possible to have a large amount of money in your bank account and yet have a refund request denied. So if you withdraw $500,000 from your bank account in a year, the IRS can deny your refund request, but if you withdraw more money the IRS can grant your refund request.
If you do not have a bank account, and you are unable to use your bank account to withdraw a certain amount of money, then how can you expect to get a refund? The solution is to get a refund in a bank account and go to that bank.
I found this in a recent article about this subject. (Read: Why should I give up my 401(k) money?.
The reason for this particular rule is because with electronic funding, banks cannot tell when you do or do not have a checking account. If you withdraw money from a bank account, then the bank can not tell you if you made a payment. If you then go to the bank and withdraw more money, the bank will know you made a payment.
As a result, they are forced to make sure you have enough money in your account to avoid any kind of penalty. This is especially important in countries such as China, where there is a lot of fraud occurring because of the lack of such regulations. In the meantime, however, if you want to do business in China, it is much better to open an account with a bank in China because they are much more reliable and can take care of any possible problems.
