What IRS Form 8300 (2018) Is For
IRS Form 8300 is used by any person engaged in a trade or business to report cash payments over $10,000 received in one transaction or related transactions. The IRS requires this report to assist the Financial Crimes Enforcement Network in identifying money laundering, tax evasion, and terrorist financing. When businesses report cash payments correctly, they help combat money laundering and protect against civil and criminal penalties for noncompliance.
When You’d Use IRS Form 8300 (2018)
You must file Form 8300 when a business receives more than $10,000 in cash payments, whether as a single lump sum or through multiple connected transactions. The deadline is 15 business days from the date the cash is received. A person engaged in business should also file when installment payments or additional cash payments bring total cash payments over the $10,000 threshold in related transactions.
Key Rules for 2018
- Cash definition: Cash includes U.S. or foreign currency, cashier’s checks, traveler’s checks, bank drafts, and money orders worth $10,000 or less in reportable cash transactions.
- Related transactions: Payments made within 24 hours or clearly connected are treated as a single transaction, even when made as separate installment payments.
- Electronic filing: The IRS encourages businesses to file electronically through the BSA e-filing system for accuracy and faster confirmation of receipt.
- Customer notification: Businesses that report cash payments must send a written statement to each customer listed, including their name and telephone number, by January 31 of the following year.
- Penalties: Civil and criminal penalties apply for late, incomplete, or false filings. Intentional disregard can result in the maximum penalty allowed under IRS rules.
Browse more tax form instructions and filing guides in our Forms Hub.
Step-by-Step Filing Process (High Level)
Step 1: Identify a Reportable Cash Transaction
Recognize when a business receives a cash payment exceeding $10,000, whether in a single transaction or several related transactions, including escrow arrangement contributions or cash custodial trust contributions.
Step 2: Collect Required Information
Gather valuable information, such as the payer’s name, taxpayer identification number, driver’s license, or other official identification documents. For non-U.S. individuals, obtain an Alien Registration Card or other official document that verifies your identity.
Step 3: Complete the IRS Form 8300
Fill out all sections of the paper form or file electronically. Include the contact person, business name, total cash payments, type of cash received, and any suspicious transaction information. Use accurate details to meet cash reporting requirements.
Step 4: File Form 8300 Within 15 Business Days
File Form 8300 promptly, either by electronic filing or by mailing paper forms to the following address listed on the IRS website. Businesses can electronically file or utilize e-filing systems to ensure accurate submissions.
Step 5: Provide Customer Notification
Send each person listed on your 8300 report of cash payments a written statement containing your business name and telephone number, the total reportable cash received, and the notice that their payment was reported to the IRS.
Step 6: Maintain Records
Keep copies of electronically filed or paper forms for at least five years. Store any sensitive information in a secure location and ensure that employees are aware of proper record-keeping procedures to avoid potential legal issues.
Learn more about federal tax filing through our IRS Form Help Center.
Common Mistakes and How to Avoid Them
- Misunderstanding what counts as cash: Businesses often think personal checks drawn on the customer’s account qualify, but personal checks are excluded from reportable cash received. Always review IRS definitions before filing.
- Missing Taxpayer Identification Numbers: Failing to collect a taxpayer identification number can result in rejection. Always request the TIN during the initial payment and document any refusal to provide it.
- Ignoring related transactions: Multiple smaller cash transactions from the same payer may require reporting. Always track total cash payments within 12 months to ensure compliance with cash reporting requirements.
- Late Filing or Omission: Failure to meet the 15-day rule can result in both civil and criminal penalties. To avoid this, e-file immediately or use certified mail when submitting paper forms.
- Forgetting to Record Written Statements: Businesses report cash payments to the IRS, but sometimes fail to notify customers. Always prepare a written statement and send it before the January 31 deadline.
- Mistake 6: Failure to recognize suspicious transactions: If a customer attempts to divide payments to avoid the $10,000 limit, file Form 8300 as a suspicious transaction and contact the financial institution at the provided telephone number.
Learn more about how to avoid business tax problems in our guide on How to File and Avoid Penalties.
What Happens After You File IRS Form 8300 (2018)
After you file electronically or mail your paper form, the IRS and the Financial Crimes Enforcement Network store and review the information. The goal is to detect illegal activity such as money laundering, tax evasion, or drug dealing through large cash transactions. Filing the Form 8300 report of cash helps the IRS verify that businesses accurately report cash payments. If issues arise, the IRS may contact you for clarification using the contact information provided.
FAQs
What are the cash reporting requirements for IRS Form 8300 (2018)?
Businesses report cash payments over $10,000 received in a single or related transaction using IRS Form 8300. This includes foreign currency, traveler’s checks, cashier’s checks, bank drafts, and money orders.
When must I file Form 8300 for a cash transaction?
A business must file Form 8300 within 15 business days after receiving a reportable cash payment exceeding $10,000, including installment or connected transactions.
How do businesses report cash payments through e-filing?
Businesses can file electronically using the BSA e-filing system. Electronic filing ensures faster processing and secure handling of sensitive information contained within the report.
What criminal penalties apply for failure to file Form 8300?
Failure to comply with IRS Form 8300 filing requirements can lead to criminal penalties, including fines and imprisonment for willful violations of cash reporting requirements.
Does the IRS Form 8300 apply to ordinary course business transactions?
Yes, the IRS Form 8300 applies to any person engaged in a trade or business receiving more than $10,000 in cash payments in the ordinary course of operations.
Can additional payments trigger new filing requirements?
Yes, additional cash payments or installment payments that bring total cash received above $10,000 require a new Form 8300 filing within 15 business days of the payment.
How do I handle suspicious transactions or illegal activity?
When you detect suspicious transactions suggesting money laundering or terrorist financing, file Form 8300 and mark the transaction as suspicious. Call the financial institutions' hotline at the listed telephone number for guidance.
