Deal Pack Blog

What you may not know about the IRS Form 8300

It’s that time again; your customer just handed you a bag full of cash totaling more than $10,000 to pay for the automobile you just sold them, and now the IRS wants to know the details of the transaction. This is an all too common scenario for the automobile industry, yet many dealers find themselves in a bind because they failed to file an IRS Form 8300 on time or at all.

 

One common misconception about IRS Form 8300 is that it only needs to be filed at the end of the year, but in actuality, it must be filed within 15 days of any one transaction or two or more related transactions that exceed $10,000 in cash. The IRS defines cash as “U.S. and foreign coin and currency received in any transaction; or a cashier’s check, money order, bank draft, or traveler’s check having a face amount of $10,000 or less that is received in a designated reporting transaction, or that is received in any transaction in which the recipient knows that the instrument is being used in an attempt to avoid the reporting of the transaction under either section 6050I or 31 U.S.C. 5331”.

 

 

Another common misconception is that personal checks are considered “cash”, and thus would require an IRS Form 8300 if it was for more than $10,000. Notice that the IRS does not list personal checks in its definition of “cash”. This is because the IRS is only interested in large transactions that consist of hard to trace monetary instruments.

 

Failure to file a timely and accurate IRS Form 8300 may lead to some harsh penalties. According to the IRS “You may be subject to penalties if you fail to file a correct and complete Form 8300 on time and you cannot show that the failure was due to reasonable cause. You may also be subject to penalties if you fail to furnish timely a correct and complete statement to each person named in a required report. A minimum penalty of $25,000 may be imposed if the failure is due to an intentional or willful disregard of the cash reporting requirements. Penalties may also be imposed for causing, or attempting to cause, a trade or business to fail to file a required report; for causing, or attempting to cause, a trade or business to file a required report containing a material omission or misstatement of fact; or for structuring, or attempting to structure, transactions to avoid the reporting requirements. These violations may also be subject to criminal prosecution which, upon conviction, may result in imprisonment of up to 5 years or fines of up to $250,000 for individuals and $500,000 for corporations or both.”  If you want to avoid these penalties, make sure you have systems in place that will trigger the need to file an IRS Form 8300 when it is required.

 

 

Luckily for you, this is a form that can be printed directly out of Deal Pack Pro! We recommend running the report once a week to stay on top of customers who may top that $10,000 mark during a 12 month period. If you have any questions on how to print the report from Deal Pack Pro, please call our Support Staff at 1-800-526-5832.

 

 

For more information on the IRS Form 8300 go to http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Form-8300-and-Reporting-Cash-Payments-of-Over-10000 . You can also file the form electronically by going to http://bsaefiling.fincen.treas.gov/main.html .

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