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Cash isn’t always king

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in Small Business Tax

If you receive more than $10,000 in cash from a business transaction, the IRS requires you to report the payment on Form 8300. The reporting requirement is linked to the government’s efforts to deter money-laundering activities.

However, you do not have to file Form 8300 if the transaction isn’t related to your business activities.

Strategy: Don’t ignore this responsibility. If you’re not careful, it could result in an audit.

The IRS works hand-in-hand with other federal authorities under the provisions of the U.S. Patriot Act. Sanctions may result in steep fines or even criminal penalties.

For this purpose, “cash” is defined as:

  • The coins and currency of the United States (and any other country).
  • A cashier’s check, bank draft, traveler’s check or money order with a face amount of $10,000 or less.

Tip: The fine for intentional disregard of the reporting rules is the greater of $25,000 or the amount of cash received (up to $100,000).

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