By Gary G. Wallace, CPA, Managing Partner
Individuals and Businesses Need to File Form 8300 for Large Cash Transactions
Overview of Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business
Form 8300 assists law enforcement in its anti-money laundering efforts. When individuals and businesses comply with the reporting laws they provide authorities with an audit trail to investigate possible tax evasion, drug dealing, terrorist financing and other criminal activities.
Retailers, specifically automobile dealerships, need to be aware of this reporting requirement; however, it also applies to individuals, companies, corporations, partnerships, associations, trusts, and estates.
Cash payments received must be reported if all of the following criteria are met:
- The amount of cash is more than $10,000
- The cash is received as:
- One lump sum of more than $10,000, or
- Installment payments that cause the total cash received within one year of the initial payment to total more than $10,000, or
- Previously unreported payments that cause the total cash received within a 12-month period to total more than $10,000
- The establishment receives the cash in the ordinary course of a trade or business
- The same agent or buyer provides the cash
- The cash is received in a single transaction or in related transactions
Cash does not include:
-Personal checks drawn on the account of the writer.
-A cashier’s check, bank draft, traveler’s check or money order with a face value of more than $10,000.
Form 8300 Reporting Deadlines
- The IRS Form 8300 reporting deadline for large cash transactions is 15 days after the transaction. If the 15th day falls on a Saturday, Sunday, or holiday the individual or business must file the report on the next business day.
- Form 8300 filers must give each party named on the form written notice by January 31 of the year following the transaction that they filed Form 8300 to report the payer’s cash transaction. IRS does not offer a specific format for the payer’s statement, but it must:
- Be a single statement aggregating the value of the prior year’s total reportable transactions.
- Include the name, address and phone number of the person filing the Form 8300.
- Inform the payer that the person is reporting the payments to IRS.
*Note: A person can give a payer who only had one transaction during the year a copy of the invoice or Form 8300 as notification if it has the required information. However, IRS does not recommend using a copy of Form 8300 because of sensitive information on the form, such as the Taxpayer Identification Number (TIN) of the person filing the Form 8300.
How to File Form 8300
IRS encourages electronically filing completed forms to reduce the need for follow-up correspondence with IRS. E-filing can be a more convenient and cost-effective way to meet the reporting deadline of 15 days after a transaction. E-filers get an automatic acknowledgment of receipt when they file. And, businesses can batch file their reports, which is helpful to those required to file many forms.
To file Form 8300 electronically, a business must set up an account with the Financial Crimes Enforcement Network’s BSA E-Filing System. For more information, interested businesses can call the Bank Secrecy Act E-Filing Help Desk at 866-346-9478 or email them at BSAEFilingHelp@fincen.gov.
To file Form 8300 by mail, send your form to: Internal Revenue Service, Detroit Federal Building, P.O. Box 32621, Detroit, MI 48232. Filers can confirm IRS received the form by sending it via certified mail with return receipt requested or by calling the IRS Bank Secrecy Act Helpline in Detroit at 866-270-0733.
Penalties For Failure to File
- The IRS may assess civil and/or criminal penalties for failure to file Form 8300
- Penalties for failure to file and/or furnish are outlined on the IRS website
This is just a brief overview of the filing requirements for Form 8300. For more details and examples and to learn how to report suspicious transactions, see the IRS From 8300 Fact Sheet and Reference Guide.
The information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.