Am I Required to File Form 8300?

• By: Jeff Martin
• On: 01/16/2023 12:18:04
• In: Federal / National Posts
• Comments: 0

There is a lot of confusion and questions regarding this form. We are not offering any legal or accounting advise today, but we are going to attempt to answer one of the more common questions we receive. The question usually goes like this: “Hey TIADA, if a dealer sold a car this year to a customer who paid the dealer $12,000, should the dealer file that IRS form? By the way, I am asking for a friend.”
 
The answer is: maybe.
 
First, let's review what constitutes a “cash” payment: Currency is the most obvious, bills and coins. However, cashier's checks, money orders, bank drafts, and even traveler's checks can be considered “cash” payments.
 
So when should a cashier's check, money order, bank draft, or traveler's check be considered? It should be considered when the face value is less than $10,000. Why is that? If a dealer receives multiple payments that are less than $10,000, but eventually add up to or total over $10,000 in the reporting period, the dealer should treat those as cash and file the form 8300. You are the first business to receive $10,000 from that customer in the reporting period.
 
If the dealer receives a cashier's check, money order, bank draft, or traveler's check that is $10,000 or more, it should not be treated as cash, because the financial institution that issued that payment instrument would then be responsible for reporting that transaction; they were the first business to receive over $10,000 from that customer.
 
So in our original scenario, if the dealer received a $9,000 cashier's check and $3,000 in $100 bills, the answer is yes, the dealer should file Form 8300—they are the first business to receive over $10,000 from that same customer.
 
If that same dealer received a $12,000 cashier's check from the same customer for the same car, the answer is no. The financial institution that issued the $12,000 cashier's check would be responsible for reporting that transaction to the IRS.
 
There are three time periods you need to keep in mind when it comes to IRS Form 8300.

• First, is the reporting time period. If you receive one cash payment for a single transaction or for related transactions, you must report the multiple payments any time you receive a total amount that exceeds $10,000 within any 12-month period.
• Second, you should file the report within 15 days of the date you receive the payment that causes the total amount to exceed $10,000, and
• Third, you should keep a copy of the form for 5 years after the date you file it with the IRS.

Required Written Statements for Customers

When a business is required to file a Form 8300, the law requires the business to provide a written statement to each person(s) named on Form 8300 to notify them that the business has filed the form. This requirement to provide a written statement does not apply with respect to a Form 8300 filed voluntarily, including a Form 8300 to report a suspicious transaction involving less than $10,000. The statement must include the following information:

• The name and address of the cash recipient's business,
• Name and telephone number of a contact person for the business,
• The total amount of reportable cash received in a 12-month period, and
• A statement that the cash recipient is reporting the information to the IRS.

The code and regulations only specify the information that the business is required to include on a statement, not the format of the statement. A business may use its invoice for the statement of notification, as long as the invoice includes all required information. Providing a copy of Form 8300 to the payer(s), although not prohibited, is not advisable due to the sensitive information contained on the form, for example, the Employer Identification Number (commonly called an EIN) or SSN of the filer.

The business filing Form 8300 must provide its identified customers with the written statement on or before January 31 of the year that immediately follows the year the customer made the cash payment. We strongly encourage you to check with a licensed accounting professional or the IRS if you have questions about filing IRS Form 8300.