The Internal Revenue Service is reminding businesses in U.S. territories that they need to file Form 8300 if they engage in cash transactions of $10,000 or more.
The warning Friday comes on the heels of several cases in which the IRS was forced to return money to innocent small business owners whose assets had been seized using the controversial practice of civil forfeiture. The businesses had made large cash deposits of just under $10,000 so their banks could avoid onerous reporting requirements, but instead prompted suspicions of illegal activity from law enforcement (see IRS Drops Civil Forfeiture Case and Prosecutors Return $447,000 in IRS Civil Asset Forfeiture Case).
The IRS reminded businesses in U.S. territories and possessions that they still need to file Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, when they engage in cash transactions in excess of $10,000. The form must be filed within 15 days of the transaction.
Businesses, including individuals who are sole proprietors that receive more than $10,000 cash in a transaction or in two or more related transactions in any U.S. possession or territory must file Form 8300 with the IRS. The possessions and territories include American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico and the U.S. Virgin Islands. The requirement is in addition to any filing obligation the business may also have with U.S. territory tax authorities under similar territory rules, including under a U.S. territorial mirror income tax code.
Examples of businesses that may have to file Form 8300 include those that sell jewelry, furniture, boats, aircraft, or automobiles, as well as those that are pawnbrokers, attorneys, real estate brokers, insurance companies and travel agencies.
Cash includes the coins and currency of the United States as well as foreign currency, cashier’s checks, bank drafts, traveler’s checks and money orders. The law also requires that businesses report related transactions occurring within a 24-hour period. If the same payer makes two or more transactions totaling more than $10,000 in a 24-hour period, the business must treat the transactions as one transaction and report the payments.
The IRS provides additional information on the filing of Form 8300 in a reference guide.
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