$10,000 in cash is the same as a $10,000 check, right? Not from the perspective of the IRS. If your business receives $10,000 in cash from a single transaction (or multiple related transactions), you’re required to report it to the IRS.
Cash payments over $10,000 require the business which receives the funds to file Form 8300 within 15 days of the transaction. The IRS shares the information reported on Form 8300 with the Financial Crimes Enforcement Network (FinCEN) which uses it to combat money laundering which finances criminal activities such as drug dealing. There is also a requirement that the business receiving the $10,000 or more has to provide the payor with a similar statement on or before January 31, of the following year.
Form 8300 requires specific information on both parties engaged in the cash transaction. It’s not enough to know your own taxpayer identification number; you also need to know the other party’s. If your business receives large cash payments, make sure to familiarize yourself with Form 8300 (and the information you’ll need to complete it) before executing large case transactions.
Form 8300 may seem like one more administrative headache, but it’s a headache that can’t be avoided. If you intentionally or willfully disregard the Form 8300 cash reporting requirements, you could face a minimum penalty of $25,000.
Consult your tax professional immediately before or after the transaction (remember the 15 day filing rule) to determine if your business needs to file Form 8300.
Contact our Ohio Tax specialists
Does your business receive (or make) large cash payments? Is the requirement to report on Form 8300 new to you? Worried that previous unreported payments could land you in hot water with the IRS or FinCEN? Contact Rea & Associates for assistance in sorting out your payment history and becoming compliant. Our Ohio tax specialists will review your payment history and prepare correct 8300s. We’ll get you compliant so you can get back to watching your business, not your back.