Whether you are an individual, a company, a corporation, a partnership, an association, a trust or an estate, if you've been the recipient of more than $10,000, the IRS wants to hear from you.
To report cash payments received in a trade or business, use Form 8300, and you can file electronically using the Financial Crimes Enforcement Network's BSA E-Filing System, which spews back an electronic acknowledgment. You can still snail-mail the form, too, sending it via certified mail with return receipt requested.
You may be wondering: In these days of cryptocurrency, what is cash? To the IRS, cash includes coins and currency of the U.S. or any foreign country, but also includes cashier's checks, bank drafts, traveler's checks or money orders with a face value of $10,000 or less. You must report transactions if the cash value is more than $10,000:
In one lump sum.
In two or more related payments within 24 hours.
As part of a single transaction within 12 months.
As part of two or more related transactions within 12 months.
You must file Form 8300 within 15 days after the date you received the cash. So if you have several smaller transactions, but together, they exceed $10,000, you've got to file.
Why all this fuss about cash payments, other than the IRS wanting its tax share? It’s to help law enforcement combat money laundering, drug dealing and terrorist financing. Knowing this makes the hair-splitting nature of the rules a bit easier to take.
A tax-exempt group doesn't have to file Form 8300 for cash contributions. However, a donor must get a written acknowledgment of the contribution from the charity, and that tax-exempt organization must report noncharitable cash payments. If it received more than $10,000 in cash for renting out its hall for a bridal shower, that payment should be reported.
Banks and other financial institutions report cash purchases of cashier's checks, treasurer's checks, bank checks, drafts, traveler's checks and money orders with a face value of more than $10,000 by filing currency transaction reports.
When do you need to file Form 8300? You should file within 15 days of receiving the cash or when the amounts total more than $10,000. Every time payments aggregate to more than $10,000, you need to file another Form 8300.
If you're a business, you have to give customers written notice by Jan. 31 of the year following the transaction that you filed Form 8300 with the IRS to report the cash transaction. If you want to report a suspicious transaction below $10,000, you may voluntarily file a Form 8300 without letting the customer know about the report. You just mark the suspicious transaction box on the form.
You have an obligation to file Form 8300 if you trade or run a business that gets cash payments of more than $10,000 for escrow arrangement contributions, preexisting debt payments, reimbursement of expenses, and making or repaying a loan. By complying with the reporting laws, you are providing authorities with an audit trail to investigate possible tax evasion, drug dealing or terrorist financing.