Business Tax Reporting Requirements for Large Cash Transactions

 Posted on March 29, 2019 in Small Business Taxes

As a business owner, the law requires that you take certain steps when you make large transactions. For cash transactions over $10,000, you must submit a form to the IRS reporting such a payment. Form 8300 is due 15 days after the transaction is completed. Entities who must file this form include individuals, companies, corporations, partnerships, associations, trusts, or estates.

How to File a Transaction Report

The IRS recommends that businesses electronically file cash transaction reports. Electronic filing has several benefits: it is fast and easy to do, and it costs the business nothing. Businesses also have the option to file Form 8300 on paper. To file electronically, a business needs to have an account with the Financial Crimes Enforcement Network’s BSA E-Filing System.

What Transactions Am I Not Required to Report?

It should be noted that not all transactions over $10,000 have to be reported. The law is concerned only with cash transactions, rather than transactions that have a paper trail. Thus, cashier's checks, bank drafts, traveler's checks, or money orders with face amounts of more than $10,000 do not have reporting requirements. 

What Is the Reason for the Reporting Requirements?

The law that mandates the reporting of large cash transactions was passed to address money laundering in the wake of 9/11. Money laundering occurs when cash is used to transfer funds obtained through illegal activities to legal entities. The government was concerned that money laundering could be used to further terrorism. 

The current law regarding large cash transaction reporting was passed as part of the Patriot Act of 2001. Before the Patriot Act, there were other, less stringent laws addressing money laundering and large cash transactions. Cash transaction reporting is also thought to be a roadblock for those seeking to evade paying taxes and for those involved in the drug or human trafficking trades.

Contact a San Jose, CA Business Tax Attorney

If you have questions about your reporting obligations to the IRS, you should seek out individualized counsel from a skilled San Jose, CA business tax lawyer. Each business is unique, and each business’ taxes will be different. That is why it is imperative to have your particular situation reviewed by an experienced tax attorney.

At the John D. Teter Law Offices, our attorney has been practicing for over 30 years, and in that time, he has helped numerous people and businesses address specific tax issues and develop general tax strategies. Call our offices today at 408-866-1810 to set up your first meeting with our firm.

Sources:

https://www.irs.gov/newsroom/irs-urges-businesses-to-e-file-cash-transaction-reports-its-fast-easy-and-free