Reporting Cash Transactions Just Got Easier

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E-filing Now Available for Form 8300

By Baron Green

The Internal Revenue Service requires that cash receipts of $10,000 or more from business transactions must be reported to the IRS within 15 days of the transaction. Filing the Form 8300, which is used to report these transactions, recently was made easier when the form became available for e-filing.

Reporting large cash transactions traces its roots to the Bank Secrecy Act (BSA) of 1970 and the more recent USA PATRIOT ACT, and represents an ongoing effort by the IRS to curtail tax evasion as well as assist with tracking and identifying cash from illegal activities such as drug trades, black markets, and terrorist financing activities.

E-filing makes submitting the Form 8300 faster, easier, and more secure for businesses. Moreover, e-filing the form is free, making it a more convenient and cost-effective way to meet the reporting deadline. Another added benefit of electronically filing the form is that businesses receive automatic acknowledgement that the form was received. This all comes together to make reporting easier and more accurate, reducing the need for follow-up correspondence with IRS.

 

Form 8300: What You Need to Know

In general

  • Form 8300 requirements apply to any person or entity engaged in a trade or business that receives $10,000 or more in cash or cash equivalents from a transaction.

Who must file?

  • The requirements apply only to businesses or persons engaged in a trade or business.
    • For example, an individual selling a personal item such as a car, boat, or collectible is not required to file Form 8300.
    • However, an individual operating a repair shop is subject to the filing requirement.

What are cash and cash equivalents?

  • Cash includes coins and currency.
  • Cash equivalents include instruments such as cashier’s checks, traveler’s checks, and money orders with a face amount of $10,000 or less if, taken together, they total more than $10,000.

What’s NOT cash and cash equivalents?

  • Cash does not include checks drawn on a bank account.
  • Instruments such as cashier’s checks, traveler’s checks, and money orders with a face amount more than $10,000, are not included. (Financial instruments for more than $10,000 are reported by the bank itself.)
  • Cryptocurrencies such as Bitcoin are not considered currency by the IRS. They are considered property and, thus, are not subject to Form 8300 reporting. Learn more about cryptocurrency.

What types of payments must be reported?

  • Transactions broadly include the sale of goods, services, or property.
  • Rentals and leases also are subject to the requirements.
    • For example, a landlord who receives monthly cash payments of $2,000 must report the transaction after receipt of the sixth payment.
  • Related transactions also include a series of payments related to a single underlying transaction such as installment sales.

Form 8300: How to File

When must you file?

  • Form 8300 must be filed within 15 days of receipt of a cash payment of $10,000 or more.

Where must you file?

  • Form 8300 can be electronically filed on the U.S. Treasury Department’s BSA website. You will first have to set up an account with the BSA E-Filing System.
  • Alternatively, a paper Form 8300 can be filed by sending it to:

Internal Revenue Service
Detroit Federal Building
PO Box 32621
Detroit, MI 48232

Other Requirements

  • Businesses required to file a Form 8300 also must provide a written statement to each payer named on the form.
  • The statement must notify the other party that the form has been filed and must include the following information:
    • Name and address of the reporting business (cash recipient).
    • Name and phone number of a contact person for the business.
    • Total of reportable cash received during the year.
  • The IRS does not specify a required format for the statement.
    • An invoice may be used for the written statement provided it includes all required information.

As with all information reporting requirements, business may be subject to civil and criminal penalties for not complying with requirements.

The full IRS Form 8300 Reference Guide can be found here.

Please consult your Adams Brown advisor with questions regarding the details of the requirements or for assistance with filing Form 8300.