Does Your Business Receive Over $10,000 In Cash From Customers?
Has your business ever received a large cash payment, and you were not quite sure what your reporting obligations were regarding that large payment? The general rule is that you must file Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, if your business receives more than $10,000 in cash from one buyer as a result of a single transaction or two or more related transactions.
The Form 8300 provides valuable information to the IRS and the Treasury Department Financial Crimes Enforcement Network (FinCEN) in their efforts to combat money laundering which sometimes is a tool used to facilitate various criminal activities, ranging from tax evasion to terrorist financing to drug dealing, to hide the proceeds from their illegal activities.
In addition to filing Form 8300 with the IRS, companies need to furnish a written statement to each person whose name is required to be included in the Form 8300 by January 31 of the year following the transaction.
Watch Out for IRS Penalties: 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.