Don’t Risk Six-Figure Penalties: What Every Business Should Know About Accepting Large Cash Payments and Form 8300

If your business ever receives large cash payments, you may have to report them to the IRS — not just on your tax return, but on a special form. Here’s what you need to know in clear, plain language.

When do I have to report cash payments?

The IRS uses certain reports to help track illegal money activity, but these rules also apply to normal, everyday businesses.

You must file Form 8300 if your business receives more than $10,000 in cash:

• In one payment, or

• In several related payments that add up to more than $10,000.

Who has to file it?

Any type of business — individuals, companies, partnerships, etc.

What counts as “related” payments?

Payments from the same customer within 24 hours are considered related. They can also be related even if more than a day apart if you know they’re part of one larger deal.

To file the form, you must collect identifying information from the customer, like their Social Security number or taxpayer ID.

If you need to file many Forms 8300, the IRS will let you “batch file” to make things easier.

What should I expect in the upcoming years?

If your business is required to e-file other forms (like W-2s or 1099s) or if you file at least 10 information forms in a year, you’d also need to e-file Form 8300.

What counts as cash?

According to the IRS, “cash” includes:

• U.S. and foreign money

• Cashier’s checks

• Bank drafts

• Traveler’s checks

• Money orders

Even cashier’s checks or money orders under $10,000 can count as cash if they’re used with other cash to pay for something over $10,000.

What about cryptocurrency?

In 2021, law stated some digital assets should be treated like cash. However, the IRS announced that businesses did not have to report crypto payments on Form 8300… yet.

More guidance on how to treat cryptocurrency should be released soon to come.

**Note: Banks have separate reporting rules and file their own reports for large check purchases, which doesn’t affect your Form 8300 filing.

What happens if you don’t follow the Form 8300 rules?

If your business doesn’t file Form 8300 on time, the IRS can hit you with a civil penalty of $310 for each missing form, up to a yearly limit.

The consequences can become more serious if the IRS believes the failure to report was intentional. In those cases, the penalties increase drastically and criminal charges can be filed.

Let’s look at a real-life example. An Arizona car dealer did not submit the full number of Forms 8300 required. The dealer filed 116 forms during the relevant year, while the IRS found that 266 more forms were necessary.

The dealership claimed it missed the filings because its software wasn’t working properly. But the U.S. Tax Court disagreed. The court found that the business wasn’t using the software correctly and failed to take basic steps to ensure compliance. This mistake resulted in a $118,140 penalty.

How to stay compliant?

Avoiding problems is simple if you stay organized. The IRS recommends that businesses:

• Keep a copy of every Form 8300 for five years

• Understand that confirmation receipts aren’t enough — you must retain the actual form

• Monitor cash transactions regularly to ensure all required reports are filed

If you have questions about the rules or want help setting up a compliance process, we’re here to guide you. Reach out for assistance with filing Form 8300 or questions about the requirements.

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