Most business owners are concerned with one thing: Making a profit. A second thing to worry about, though, is keeping the IRS happy. No one wants to be on the wrong side of that equation. That means knowing some obscure tax provisions – such as the requirement to report large cash payments on Form 8300. The IRS requires all businesses to file the form for every cash payment they receive of $10,000 or more. The payment can be acquired in one lump sum or several related transactions. The IRS also requires the company to notify each customer listed on the form about the filing.
Form 8300 is an informational filing, which means it is for reporting purposes only. The IRS just wants you to let them know if your business gets a large cash payment. The government created this form as a component of the currency reporting management system of the Bank Secrecy Act to help the IRS and the Financial Crimes Enforcement Network (FinCEN) combat money laundering. It is often the impetus for audits, especially in legally gray businesses such as cannabis dispensaries.
Read on to learn what this requirement is, when you must file it, what happens if you don’t, and some pitfalls to avoid.
Filing Options, Deadlines, and Requirements
Essential Factors of Filing Form 8300
1. Definition of a “Person”
2. Definition of a “Transaction”
3. What the IRS Means by “Cash”
4. Exceptions to Filing IRS Form 8300
5. Civil and Criminal Penalties
- Don’t miss the deadline, or you will incur monetary penalties.
- Set aside enough time to fill out the form thoroughly, including all payments that meet the requirement.
- Double-check all your numbers and info before submitting. It’s easy to misplace numbers and decimal points, and such an error could lead to an audit.