Taxpayers engaged in a trade or business generally must file IRS/FinCEN Form 8300 anytime they receive $10,000 in cash in a single transaction or related transactions. Currently, taxpayers have the option of filing this form either electronically or on paper. However, the IRS recently announced that most business taxpayers will be required to e-file Form 8300 (Report of Cash Payments Over $10,000) beginning January 1, 2024.
Those engaged in illegal activities like drug trafficking and tax evasion often make payments in cash in the hope that the money cannot be tracked. Therefore, Form 8300 plays a critical role in helping law enforcement detect and combat such activities. Businesses that do not file the form when required to do so, or file a paper Form 8300 when e-filing is required, may face IRS penalties.
For the purpose of determining whether a Form 8300 must be filed, transactions are generally “related” if they involve the same customer and occur within a 24-hour period. However, transactions that occur further apart in time may still be considered related if there was good reason to know that they were part of a series of connected transactions. For example, the future purchase of additional items or services might be negotiated during the original sale.
Some exceptions to the Form 8300 electronic filing requirement will exist when the rule takes effect on January 1. For example, businesses required to file fewer than 10 other information returns annually may typically continue filing Form 8300 on paper. The IRS will also offer exemptions and waivers in cases where electronic filing would cause hardship for a taxpayer, or violate their religious beliefs. A business tax professional can help you determine when and how you must file Form 8300, and help you complete and submit the form in a timely manner.