Many small business owners are completely unaware they are breaking the law once they accept cash payments over $10,000. What they don’t know could cost them huge fines from the IRS. Under IRS rules, if a business accepts a cash payment of $10,000 or more for one transaction, they must report it by filing a form 8300 within 15 days of the transaction. This form can be filed online or on paper. Moreover, the business must notify the person from whom they accepted that the payment no later than January 31 of the year following the filing.
The penalties for not filing can be huge. The intentional disregard penalty for failure to report is the greater of $25,000 or the quantity of money received in this transaction not to exceed $100,000. Failure to submit a timely return can run $50 to $100 each transaction.
Breaking a transaction into two payments does not enable you to prevent filing. The IRS counts more than one payment connected to one transaction as still being subject to the $10,000 limitation. For example, if a business sold a tractor and received a $7,000 cash deposit on the order, delivered the tractor some time afterwards and got the $5,000 balance as money, 소액결제 현금화 후기 which could be counted as a $12,000 transaction and requires that the filing of a form 8300. It’s not necessary to report transactions using cashiers checks or money orders, but any form of money or money is subject to the limitations.
If a business sells a client an item for $9,000 money one month and a month later the same customer buys a totally different item for cash, that’s considered two distinct transactions rather than subject to filing. However, if the two sales happened within a 24 hour period they’d be subject to the limitation. In case a business leases a space to someone who pays $2,000 a month rent in cash and the total cash rent paid during a calendar year exceeds $10,000, then that’s subject to this limitation because it is all related to one transaction.
It becomes fairly tricky sometimes to ascertain if the limit has been exceeded. When in doubt consult with your accountant or the IRS website for additional definition, or you may call the IRS for advice. Form 8300 is available online or where you purchase IRS forms. In addition, it can be filed electronically online.