Money Talk: Understanding Form 8300 Cash Payment Requirements.

• Author: Galyan, Ani
• Position: Regulator update

the Deficit Reduction Act of 1984 included the enactment of IRC Sec. 60501, which imposed an information-filing obligation for transactions involving cash. In 2001, Congress added Sec. 5331 to the Bank Secrecy Act (BSA) as part of the USA Patriot Act, which imposed similar reporting obligations as IRC Sec. 60501.

The information is to assist in the investigation of criminal, tax and regulatory investigations or proceedings. Both statutes are substantially the same, with a minor exception, and impose the same filing obligations using IRS/FinCEN Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business.

Businesses that operate in a cash environment within the scope of Form 8300 include jewelry stores, bail bondsman, automobile dealerships, pawnbrokers, real estate brokers, insurance companies and the cannabis industry as a whole. FinCEN, the agency charged with collecting the information required under the BSA, periodically issues Geographic Targeting Orders (GTO) imposing additional reporting and recordkeeping requirements covered by the order.

For example, in 2014 FinCEN issued a GTO to an area of downtown Los Angeles for covered businesses identified in the order.

It's important to be aware of the GTOs applicable to specific areas and industries to ensure compliance with IRS and BSA filing obligations.

Reporting Requirements

Under both statutes, generally any person who, in the course of their trade or business, receives more than $10,000 in cash or currency in one or more related transaction must file a report using Form 8300. Specific exceptions apply to agents and financial institutions.

Any person required to submit a Form 8300 must also furnish a single, annual, written statement to each person whose name is set forth in a return ("identified person") filed with the IRS. The statement required does not need to follow any particular format, but must contain name and address of the person filing the return, the aggregate amount of reportable cash received during the year and statement informing the recipient that information is being reported to the IRS. The statement must be issued to the recipient's last known address on or before Jan. 31 of the following year.

Reportable Payments

A Reportable Transaction: Form 8300 is required when payments of cash exceed $10,000 in one or more related transactions. "Transaction" means the underlying event precipitating the payer's transfer of currency to the recipient. In this...