Required Reporting of Cash Receipts Over $10,000
Required Reporting of Cash Receipts Over $10,000
In general, businesses must report to the IRS cash transactions in excess of $10,000 on Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business within 15 days and the requirement cannot be avoided by splitting into multiple transactions. Before January 31st, the business must notify every named person regarding their information reported to the IRS in the previous year.
For purposes of this information reporting requirement, cash generally means the currency and coin of the United States and other countries. For certain transactions (retail sales involving consumer durables, collectibles, or travel/entertainment activities), cash can include certified/cashier’s checks, bank drafts, traveler’s checks, and money orders. Note that personal checks, ATM, debit and credit card payments, wire transfers, and other financial instruments are not considered cash for this reporting requirement. Please note that in 2024, digital assets such as cryptocurrencies will be added to the definition of cash for purposes of the reporting requirement.
Intention is the key to the severity of penalties assessed by the IRS for noncompliance with the filing or notification requirements. Willful violations can lead to felony charges with penalties up to $500,000 and five years in prison. The best way for businesses to avoid noncompliance is implementation of effective internal controls and education of all staff regarding the requirements. The IRS publishes a reference guide and other publications to assist businesses with determining their compliance.