E-Filing Cash Transaction Reports
In addition to reporting income and deductions to the IRS, taxpayers must also report any cash payments that they receive in excess of $10,000. While it is possible to fulfill this obligation by completing and submitting a paper form, many taxpayers choose to file these reports electronically. Regardless of the method used, reporting these transactions is important, as failing to do so can have serious consequences, including the assessment of penalties, fines, and liens, so if you have questions about your own tax reporting obligations, it is critical to contact an experienced Florida tax law attorney who is well-versed in both federal and state law.
Who Must Report Large Cash Transactions?
Taxpayers who own businesses are required to report any transactions of over $10,000 to the government. However, these are not the only entities that must report these transactions, as some individuals, trusts, estates, associations, and partnerships must also do so. Even tax-exempt organizations are usually required to file these reports, unless the cash contribution in question is charitable in nature. The information from these reports is then used by the IRS to trace money arising from illegal activities and to prevent tax evasion.
Anyone considered a “person” by the IRS must comply with this filing requirement, including real estate brokers, insurance companies, travel agencies, attorneys, and dealers in jewelry, furniture, and vehicles.
What Qualifies as Cash?
When it comes to reporting cash transactions, taxpayers must include all transactions that involve the use of coins and currency, whether originating in the U.S. or another foreign country, or cashier’s checks, bank drafts, money orders, and traveler’s checks, but only if the payment exceeds $10,000 and was received by the taxpayer for:
- A designated reporting transaction; or
- A transaction in which the taxpayer knows the payer is attempting to avoid reporting requirements.
These transactions must be reported if more than $10,000 is provided to the recipient in:
- One lump sum;
- Two or more related payments within 24 hours; or
- As part of a single transaction or at least two related transactions within one year.
Filing Form 8300
Taxpayers that receive cash payments of more than $10,000 must report those transactions to the IRS within 15 days of the transaction by either:
- Filing Form 8300, which is also titled Report of Cash Payments Over $10,000, on paper; or
- Electronically filing Form 8300.
Although many taxpayers still choose to file a paper version of Form 8300 with the IRS, more and more businesses have begun opting for the electronic option, which many have found to be faster, as well as more secure, cost-effective, and convenient.
As a more accurate means of reporting, electronic submission has also been shown to reduce the need for follow-up correspondence with the IRS and other agencies. Finally, companies that choose the electronic submission option will receive a free acknowledgment of receipt of the report free of charge. However, before a taxpayer can utilize this e-filing service, he or she must set up an account with the BSA E-Filing System, which is administered by the Financial Crimes Enforcement Network.
Call Our Legal Team Today
To speak with dedicated Florida tax lawyer Ronald Cutler, P.A. about your own reporting obligations, please call 386-490-9949 today.