So, when do you have to file a Form 8300? A person must file a Form 8300 to report cash payments they receive in their trade or business when the business received the cash in either (i) one lump sum of more than $10,000, (ii) installment payments causing the total cash received within one year of the initial payment to total more than $10,000, or (iii) previously unreported payments causing the total cash received within a 12-month period to total more than $10,000. For purposes of Form 8300, a person can be an individual, company, corporation, partnership, association, trust, or estate.
The $10,000 cash payment could be received in U.S. or foreign currency, or in other forms of payment that are known as cash equivalents. Cash equivalents may include cashier’s checks, bank drafts, traveler’s checks, and money orders with a face value of $10,000 or less. A person or business is required to report transactions when a customer uses cash in a single transaction or in multiple related transactions. A complicating factor is the definition of “related transaction.” The IRS defines related transactions as transactions between a payer, or an agent of the payer, and a business or person receiving the cash (or cash equivalent) occurring within a 24-hour period. Additionally, transactions are related transactions if they occur in a period that exceeds 24 hours when a business knows, or has reason to know, each is a series of connected transactions. Obviously, this allows for interpretation by the business receiving the funds as to what constitutes a “related transaction.”
Form 8300 must be filed within 15 days after the receipt of cash. In addition, on or before January 31st of the year immediately following the year of the case payment, you must provide a written statement to each person(s) named on Form 8300 to notify them that you filed a Form 8300 pertaining to their transaction. The federal government’s purpose of Form 8300 is to gather information to aid its anti-money laundering efforts and investigate criminal activities such as tax evasion and trace the proceeds of criminal activities.
Failure to comply with the Form 8300 requirements can result in civil and/or criminal penalties.
If you would like more information about this blog post or any other tax-related matter, please call our office at 214.744.3700 or email Mike Villa at firstname.lastname@example.org, Damon Rowe at email@example.com or Josh Ungerman at firstname.lastname@example.org,