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Cash Reporting Requirements

The IRS is trying to track down illegal activity which uses cash to hide or avoid being detected. Organized crime loves cash and has all kinds of tools to “launder” that cash so the IRS or other government agencies don’t catch them.

One of the tools the IRS uses to discover illegal activities is cash reporting. Certain businesses that receive payments of over $10,000 in cash in a single trade or transaction must file Form 8300. That form is called the “Report of Cash Payments Over $10,000 Received in a Trade or Business.” The IRS acknowledges that many cash transactions are legitimate, but the information reported on form 8300 can help them fight tax evaders and drug traders, along with those who finance terrorism.

Generally, a business must file a form 8300 with 15 days after the date the person received the cash.

The reporting business must keep a copy of every form 8300 it files along with supporting documentation and the required statement it sends to customers, for five years from the date filed. The IRS also wants the filer to associate the confirmation number they receive when the form is filed with their copy of the form.

The IRS received over 400,000 forms 8300 in 2022. Many were paper, which is very difficult for the IRS to process and use in their goal of catching the tax evaders, drug traders, and terrorists out there. Thus, businesses that file at least 10 information returns (including 1099s and W-2s), are now being required to only file this form electronically starting in 2024. To do so, a business can create an account with FinCen’s BAS E-Filing System to efile the form 8300. You can go to the website and search for their fact sheet “FS-2023-19” to get more information.

A business may file a request for a waiver from electronically filing information returns, including form 8300, because of undue hardship. However, a business may not request an e-filing waiver that would only apply to the form 8300. The business must include the word “Waiver” on the center top of each form 8300 (page 1) when submitting a paper filed return.

And yes, the IRS does audit business compliance in properly filing this form. I recently had one of my clients receive an audit notice about this. Currently, the penalties for not filing are not burdensome, but the fact that the IRS is now using their FinCen reporting system for this form hints that they may increase the non-compliance penalties to the level of other failure to report FinCen related items. Best to get in the habit of filing this form properly now.

Have you heard? Job 28:28 says, “…Behold, the fear of Yahweh, that is wisdom. To depart from evil is understanding.”

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