Starting Jan. 1, 2024, businesses must electronically file (e-file) Form 8300, Report of Cash Payments Over $10,000, instead of filing a paper return. This new requirement follows final regulations amending e-filing rules for information returns, including Forms 8300.
Trades and businesses must report cash payments received if all the following criteria are met:
The amount of cash is more than $10,000.
The business receives the cash as:
One lump sum of more than $10,000, or
Installment payments that cause the total cash received within one year of the initial payment to total more than $10,000 or
Previously unreported payments that cause the total cash received within 12 months to total more than $10,000
To comply with the Form 8300 reporting requirements, the recipient must supply, and the business must obtain the correct Taxpayer Identification Number of the person making the payment(s).
Although many cash transactions are legitimate, information reported on Form 8300 can help combat those who evade taxes, profit from the drug trade, engage in terrorist financing or conduct other criminal activities. The government can often trace money from these illegal activities through payments reported on Forms 8300 that are filed in a timely, complete, and accurate manner.
The new requirement for e-filing Forms 8300 applies to businesses mandated to e-file certain other information returns, such as Forms 1099 series and Forms W-2. Electronic filing and communication options will be more straightforward and make interacting with the IRS easier. Beginning with calendar year 2024, businesses must e-file all Forms 8300 (and other specific types of information returns required to be filed in a given calendar year) if they're required to file at least ten information returns other than Form 8300.
For example, if a business files five Forms W-2 and five Forms 1099-INT, it must e-file all its information returns during the year, including any Forms 8300. However, if the business files fewer than ten information returns of any type other than Forms 8300, then that business can e-file the information returns, and it is optional to e-file any Forms 8300. However, companies not required to e-file may still choose to do so.
Waivers - A business may request a waiver from electronically filing information returns due to undue hardship. For more information, companies can refer to Form 8508, Application for a Waiver from Electronic Filing of Information Returns. If the IRS grants a waiver from e-filing any information return, that waiver automatically applies to all Forms 8300 for the calendar year. A business must file only Form 8300 electronically before requesting a waiver.
When submitting a paper-filed return, the business must include the word "Waiver" at the center of each Form 8300 (Page 1).
If a business must file at most ten information returns, other than Forms 8300, during the calendar year, the company may file Forms 8300 in paper form without requesting a waiver. However, businesses filing less than ten information returns can still choose to e-file Forms 8300 electronically.
Exemptions - If using the technology required to e-file conflicts with a filer's religious beliefs, they are automatically exempt from filing Form 8300 electronically. When submitting the paper filed return, the filer must include "RELIGIOUS EXEMPTION" at the center of each Form 8300 (page 1).
Late Returns - A business must self-identify late returns. A company must file a late Form 8300 in the same way as a timely filed Form 8300, either electronically or on paper. A business filing a late Form 8300 electronically must include the word "LATE" in the comments section of the return. A company filing a late Form 8300 on paper must write "LATE" at the center of each Form 8300 (page 1).
Late Filing Penalties – The penalty for filing a Form 8300 late for 2023 is $310. However, the penalty is reduced to $60 if filed by the 30th day after the due date. The penalties are inflation-adjusted annually, and the amounts in 2014 were not available at publication.
Record keeping - A business must keep a copy of every Form 8300 it files, any supporting documentation, and the required statement it sends to customers for five years from the date filed.
Filing electronically will confirm the form was filed; however, e-file confirmation emails alone don't meet the record-keeping requirement. When e-filing, filers must also save a copy of the form before finalizing the form submission. They should associate the confirmation number with the saved copy. Before completing the form for submission, businesses should save a copy of the form electronically or print a copy of the form.
E-filing - Many businesses have already found the free and secure e-filing system to be a more convenient and cost-effective way to meet the reporting deadline of 15 days after a transaction. They get free email acknowledgment of receipt of the form when they e-file. Businesses can batch e-file their reports, which is especially helpful to those required to file many forms.
To file Forms 8300 electronically, a business must set up an account with the Financial Crimes Enforcement Network's BSA E-Filing System. The IRS will ensure the privacy and security of all taxpayer data.
To help businesses prepare and file reports, the IRS created a video - How to Complete Form 8300 – Part I, Part II. The short video points out sections of Form 8300 for which the IRS commonly finds mistakes and explains how to complete those sections accurately.
For more information, please get in touch with this office.