How To Report Large Cash Transactions for Your Business to the IRS

Does your business receive large amounts of cash or cash equivalents? You may be required to report these transactions to the IRS.

What are the reporting requirements for large cash transactions?

PPP loan forgivenessWhile operating a trade or business, each person who receives more than $10,000 in cash in one transaction (or two or more related transactions) must file Form 8300. A “related transaction” is any transaction conducted in a 24-hour period. Transactions can also be considered related even if they occur over a period of more than 24 hours if the recipient knows, or has reason to know, that each transaction is one of a series of connected transactions.

To complete a Form 8300, you’ll need personal information about the person making the cash payment, including a Social Security or taxpayer identification number.

Why does the government require reporting?

Although many cash transactions are legitimate, the IRS explains that “information reported on Form 8300 can help stop those who evade taxes, profit from the drug trade, engage in terrorist financing and conduct other criminal activities. The government can often trace money from these illegal activities through the payments reported on Form 8300 and other cash reporting forms.”

According to the IRS, you should keep a copy of Form 8300 for five years from the date you file it.

What’s considered “cash” and “cash equivalents?”

For the purpose of reporting on Form 8300, cash includes U.S. currency and coins, as well as foreign money. In addition, cash equivalents include cashier’s checks (also known as bank checks), bank drafts, traveler’s checks, and money orders.

Money orders and cashier’s checks under $10,000, when used in combination with other forms of cash for a single transaction that exceeds $10,000, are defined as cash for Form 8300 reporting purposes.

Note, under a separate reporting requirement, banks and other financial institutions report cash purchases of cashier’s checks, treasurer’s checks and/or bank checks, bank drafts, traveler’s checks, and money orders with a face value of more than $10,000 by filing currency transaction reports.

Can I electronically file the forms?

Businesses required to file reports of large cash transactions on Form 8300 can file on paper or e-file. The form is due 15 days after a transaction and there’s no charge for the e-file option. Businesses that file electronically will receive an automatic acknowledgment of receipt when they file.

Businesses can also batch file their reports, which is helpful to those required to file many forms.

How can I set up an electronic account?

To electronically file Form 8300, a business must set up an account with FinCEN’s Bank Secrecy Act E-Filing System. For more information, visit https://bsaefiling.fincen.treas.gov/AboutBsa.html.

Questions

Contact us with any questions about large cash transactions or for assistance filing Form 8300.

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