Many small business owners are totally unaware they are breaking the law once they take cash payments over $10,000. What they don’t know may cost them huge fines from the IRS. Under IRS rules, if a business accepts a cash payment of $10,000 or more for a single transaction, they must report it by filing a form 8300 within 15 days of the transaction. This form may be filed online or on paper. Moreover, the business is required to notify the person from whom they admitted that the payment no later than January 31 of the year following the filing.
The penalties for not filing could be huge. The intentional disregard penalty for failure to report would be the higher of $25,000 or the amount of money received in such transaction to not exceed $100,000. Failure to submit a timely return may run $50 to $100 per transaction. The aggregate annual limitation (ceiling) in the event of businesses with gross receipts exceeding $5 million is $1,500,000. For businesses with gross receipts not exceeding $5 million, the aggregate annual limitation is $500,000.
Breaking a transaction into two payments does not allow you to avoid filing. The IRS counts greater than one payment connected to one transaction as still being subject to the $10,000 limitation. For instance, if a business sold a tractor and obtained a $7,000 cash deposit on the order, delivered the tractor some time later and got the $5,000 balance as money, 소액결제 현금화 which could be counted as a $12,000 transaction and requires the filing of a form 8300. It’s not required 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 a product for $9,000 money one month and a month after the same customer buys a totally different thing for cash, that’s considered two separate transactions and not subject to filing. However, if the two sales occurred inside a 24 hour period they’d be subject to the limitation. If a business leases a space to someone who pays $2,000 a month rent in cash and the entire money rent paid during a calendar year exceeds $10,000, then that’s subject to this limitation since it’s all related to one transaction.
It gets rather tricky sometimes to ascertain if the limit has been exceeded. If consult with your accountant or the IRS website for additional definition, or you can call the IRS for information. Form 8300 is available online or wherever you get IRS forms. It can also be filed electronically on line. Much better to be safe than sorry.