Failure to Meet IRS Reporting Requirement for Cash Payments over $10,000 Received can Result in Stiff Penalties
Failure to Meet IRS Reporting Requirement for Cash Payments over $10,000 Received can Result in Stiff Penalties
Taxpayers engaged in a trade or business that receive more than $10,000 of cash payments from a single payer in one transaction or in two or more related transactions (all transactions within a 24-hour period are considered related transactions) must file Form 8300 with the Internal Revenue Service by the 15th day after the date the cash was received (with rare exceptions). Cash payments not only consist of coins and currency, but also can include cashier’s checks, money orders, bank drafts, and traveler’s checks (but personal checks are excluded from this definition). In addition, applicable taxpayers must timely furnish a correct and complete statement to each person named in a required report by January 31st of the following year.
The penalties can be stiff. Failure to satisfy this filing requirement intentionally or willfully could result in a minimum penalty of $25,000. In addition, causing (or attempting to cause) a trade or business to fail to file a required report, filing a required report containing a material omission or misstatement of fact, or structuring transactions to avoid the reporting requirements all constitute violations which could result in even harsher penalties. These violations may be subject to criminal prosecution, which, upon conviction, could result in imprisonment of up to 5 years or fines of up to $250,000 for individuals and $500,000 for corporations or both.
If you have any questions, or believe your trade or business may be subject to these reporting requirements and are in need of assistance, please let us know.