Form 8300 Follow-up. What is "Cash?"
TIADA received a few calls on cashier's checks being cash or not cash and who reports. Follow the account. There needs to be a traceable account number to the customer for funds to fall outside of 8300 filings. If your customer was also a customer of a bank and pulled funds out of their account, i.e. that were essentially certified by the bank, the bank would be responsible for any related reporting. However, if the cashier's check was generic and based on the bank's funds or account, or a money order was pulled from a post office or convenience store (where there is no record or account of record), then you need to file and report the transaction. If in doubt, you could file an 8300 anyway just in case. There is no penalty for unnecessary filings…..only penalties for NOT filing.
If a customer purchased a cashier's check at the bank for over $10,000, would the bank report the transaction? Does the seller of a vehicle need to report the transaction if the same cashier's check is subsequently used to purchase a vehicle?
If the cashier's check was purchased with cash exceeding $10,000, the bank would file a Currency Transaction Report (not a Form 8300).
The purchase of a vehicle with a cashier's check, bank draft, traveler's check or money order with a face amount of more than $10,000 is not treated as cash and a business does not have to file Form 8300 when it receives them.
Does the IRS consider it cash, or a cash equivalent, if a dealership receives a cashier's check drawn on the funds of the bank with the customer's personal account number and customer name on it (not checks drawn on a personal checking account or on a personal account of the customer)?
Cashier's checks (sometimes called a "treasurer's check" or "bank check") drawn on the bank's account and not the account of the customer in the amount of $10,000 or less are considered cash under the expanded definition, unless they are loan proceeds. See the definition of "cash" in the instructions for the Form 8300 for more information on the expanded definition of cash, including when it applies.
The fact that there are notations on the check or that the check is made payable to the dealership does not negate this.
For wholesalers, where a purchasing retailer buys more than one vehicle in a single day, is that one transaction, a series of related transactions or a series of unrelated transactions given that there are multiple vehicles? What happens on separate purchases over the course of a week? What about a month?
Two or more transactions within a 24-hour period are related transactions. A trade or business that receives more than $10,000 in related transactions must file Form 8300.
If purchases are more than 24 hours apart and not connected in any way that the seller knows, or has reason to know, then the purchases are not related and a Form 8300 is not required.
I understand that the dealership must provide a written statement to the customer by Jan 31 of the year following the Form 8300 filing. Can the dealership use the sales invoice (or the Form 8300) to satisfy the written statement requirement if the invoice has language printed on it that cash sales over $10,000 are reported to the IRS?
There is nothing in the Code or regulations mandating a specific format for the customer statement. The regulations, however, establish certain minimum requirements. As long as these minimum requirements are met, there would be no problem if the seller chose to print the required language on an invoice.
The statement must contain the following information:
The name and address of the person completing Form 8300;
The aggregate amount of reportable cash in all related cash transactions; and
A legend stating that the seller is reporting the information contained in the statement to the Internal Revenue Service.
If during the calendar year, the dealer has more than one transaction with the customer, furnishing multiple copies of the sales invoice (or Form 8300s) would not meet the notice requirements because it is not a 'single' statement. In this situation, the dealer should provide a single written notice for all of the transactions.