You might be asking yourself, why these payments. The government can often trace this laundered money through the payments you report. Laws passed by Congress require you to report these payments. Your compliance with these laws provides valuable information that can stop those who evade taxes and those who profit from the drug trade and other criminal activities.
Who Must File Form 8300? Generally, any person in a trade or business who receives more than $10,000 in cash in a single transaction or in related transactions must file Form 8300. For example, you may have to file Form 8300 if you are a dealer in jewelry, furniture, boats, aircraft, or automobiles; a pawnbroker; an attorney; a real estate broker; an insurance company; or a travel agency. Special rules for clerks of federal or state courts are discussed later under Bail received by court clerks. However, you do not have to file Form 8300 if the transaction is not related to your trade or business. For example, if you own a jewelry store and sell your personal automobile for more than $10,000 in cash, you would not submit a Form 8300 for that transaction. Transaction defined. A “transaction” occurs when: Goods, services, or property are sold; Property is rented; Cash is exchanged for other cash; A contribution is made to a trust or escrow account; A loan is made or repaid; or Cash is converted to a negotiable instrument, such as a check or a bond. Person defined. A “person” includes an individual, a company, a corporation, a partnership, an association, a trust, or an estate. Exempt organizations, including employee plans, are also “persons.” However, exempt organizations do not have to file Form 8300 for a more-than-$10,000 charitable cash contribution they receive since it is not received in the course of a trade or business. Foreign transactions. You do not have to file Form 8300 if the entire transaction (including the receipt of cash) takes place outside of: The 50 states, The District of Columbia, Puerto Rico, or A possession or territory of the United States. However, you must file Form 8300 if any part of the transaction (including the receipt of cash) occurs in Puerto Rico or a possession or territory of the United States and you are subject to the Internal Revenue Code. Bail received by court clerks. Any clerk of a federal or state court who receives more than $10,000 in cash as bail for an individual charged with any of the following criminal offenses must file Form 8300: 1. Any federal offense involving a controlled substance, 2. Racketeering, 3. Money laundering, and 4. Any state offense substantially similar to (1), (2), or (3) above.
Taxpayer Identification Number (TIN) You must furnish the correct TIN of the person or persons from whom you receive the cash. If the transaction is conducted on the behalf of another person or persons, you must furnish the TIN of that person or persons. If you do not know a person's TIN, you have to ask for it. You may be subject to penalties for an incorrect or missing TIN. Some Exception applies.
What Is a Related Transaction? Any transactions between a buyer (or an agent of the buyer) and a seller that occur within a 24-hour period are related transactions. If you receive over $10,000 in cash during two or more transactions with one buyer in a 24-hour period, you must treat the transactions as one transaction and report the payments on Form 8300. For example, if you sell two products for $6,000 each to the same customer in 1 day and the customer pays you in cash, these are related transactions. Because they total $12,000 (more than $10,000), you must file Form 8300. More than 24 hours between transactions. Transactions are related even if they are more than 24 hours apart if you know, or have reason to know, that each is one of a series of connected transactions. For example, you are a travel agent. A client pays you $8,000 in cash for a trip. Two days later, the same client pays you $3,000 more in cash to include another person on the trip. These are related transactions, and you must file Form 8300 to report them.
What About Suspicious Transactions? If you receive $10,000 or less in cash, you may voluntarily file Form 8300 if the transaction appears to be suspicious.
When, Where, and What To File The amount you receive and when you receive it determine when you must file. Generally, you must file Form 8300 within 15 days after receiving a payment. If the Form 8300 due date (the 15th or last day you can timely file the form) falls on a Saturday, Sunday, or legal holiday, it is delayed until the next day that is not a Saturday, Sunday, or legal holiday. More than one payment. In some transactions, the buyer may arrange to pay you in cash installment payments. If the first payment is more than $10,000, you must file Form 8300 within 15 days. If the first payment is not more than $10,000, you must add the first payment and any later payments made within 1 year of the first payment. When the total cash payments are more than $10,000, you must file Form 8300 within 15 days. After you file Form 8300, you must start a new count of cash payments received from that buyer. If you receive more than $10,000 in additional cash payments from that buyer within a 12-month period, you must file another Form 8300. You must file the form within 15 days of the payment that causes the additional payments to total more than $10,000. If you are already required to file Form 8300 and you receive additional payments within the 15 days before you must file, you can report all the payments on one form. Example. On January 10, you receive a cash payment of $11,000. You receive additional cash payments on the same transaction of $4,000 on February 15, $5,000 on March 20, and $6,000 on May 12. By January 25, you must file a Form 8300 for the $11,000 payment. By May 27, you must file an additional Form 8300 for the additional payments that total $15,000. Amending a Report? If you are amending a report, check box 1a at the top of Form 8300. Complete the form in its entirety (Parts I-IV) and include the amended information. Do not attach a copy of the original report. Where to file. Mail the form to the address given in the Form 8300 instructions. You may file the form electronically by using FinCEN's BSA E-Filing System.
Required statement to buyer. You must give a written or electronic statement to each person named on any Form 8300 you must file. You can give the statement electronically only if the recipient agrees to receive it in that format. The statement must show the name and address of your business, the name and phone number of a contact person, and the total amount of reportable cash you received from the person during the year. It must state that you are also reporting this information to the IRS. You must send this statement to the buyer by January 31 of the year after the year in which you received the cash that caused you to file the form. You must keep a copy of every Form 8300 you file for 5 years.
Examples Example 1. Pat Brown is the sales manager for Small Town Cars. On January 6, 2015, Jane Smith buys a new car from Pat and pays $18,000 in cash. Pat asks for identification from Jane to get the necessary information to complete Form 8300. A filled-in form is shown in this publication. Pat must mail the form to the address shown in the form's instructions or file the form electronically using FinCen's BSA E-Filing System by January 21, 2015. He must also send a statement to Jane by January 31, 2016.
Example 2. Using the same facts given in Example 1, suppose Jane had arranged to make cash payments of $6,000 each on January 6, February 6, and March 6. Pat would have to file a Form 8300 by February 23 (17 days after receiving total cash payments within 1 year over $10,000 because February 21, 2015, is a Saturday). Pat would not have to report the remaining $6,000 cash payment because it is not more than $10,000. However, he could report it if he felt it was a suspicious transaction.
There are civil penalties for failure to: File a correct Form 8300 by the date it is due, and Provide the required statement to those named in the Form 8300. If you intentionally disregard the requirement to file a correct Form 8300 by the date it is due, the penalty is the greater of: 1. $25,000, or 2. The amount of cash you received and were required to report (up to $100,000). There are criminal penalties for: Willful failure to file Form 8300, Willfully filing a false or fraudulent Form 8300, Stopping or trying to stop Form 8300 from being filed, and Setting up, helping to set up, or trying to set up a transaction in a way that would make it seem unnecessary to file Form 8300. If you willfully fail to file Form 8300, you can be fined up to $250,000 for individuals ($500,000 for corporations) or sentenced to up to 5 years in prison, or both. These dollar amounts are based on Section 3571 of Title 18 of the U.S. Code. The penalties for failure to file may also apply to any person (including a payer) who attempts to interfere with or prevent the seller (or business) from filing a correct Form 8300. This includes any attempt to structure the transaction in a way that would make it seem unnecessary to file Form 8300. Structuring means breaking up a large cash transaction into small cash transactions.
Information obtain from IRS Publication 1544.
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To get more information, visit bsaefiling.fincen.treas.gov. Publication 1544 (September 2014)