Starting Jan. 1, 2024, businesses are required to 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 is 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 a 12-month period 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 person making the payment(s).
Why are Businesses Required to E-file Form 8300?
Although most cash transactions are legitimate, some are not. Form 8300 was created to help determine specific individuals who evade taxes, profit from the drug trade, engage in terrorist financing or conduct other criminal activities. Money from illegal activities can often be traced through payments reported on Forms 8300.
The new requirement for e-filing Forms 8300 applies to businesses mandated to e-file certain other information returns, such as Forms 1099 and W-2s. Electronic filing and communication options will be simpler and will make it easier to interact with the IRS. Beginning with calendar year 2024, businesses must e-file all Forms 8300 (and other certain types of information returns required to be filed in a given calendar year) if they’re required to file at least 10 information returns other than Form 8300.
Example: if a business files five Forms W-2 and five Forms 1099-INT, then the business must e-file all their information returns during the year, including any Forms 8300. However, if the business files fewer than 10 information returns of any type, other than Forms 8300, then that business does not have to e-file the information returns and is not required to e-file any Forms 8300. However, businesses not required to e-file may still choose to do so.
What Options Do Businesses Have Regarding Form 8300?
Waivers
A business may file a request for a waiver from electronically filing information returns due to undue hardship. For more information, 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 duration of the calendar year. A business may not request a waiver from filing only Forms 8300 electronically.
The business must include the word “Waiver” on the center top of each Form 8300 (on page 1) when submitting a paper filed return.
If a business is required to file fewer than 10 information returns, other than Forms 8300, during the calendar year, the business may file Forms 8300 in paper form without requesting a waiver. However, businesses filing less than 10 information returns, it can still choose to e-file the Forms 8300 electronically if it chooses to do so.
Exemptions
If using the technology required to e-file conflicts with a filer’s religious beliefs, they are exempt from filing Form 8300 electronically. The filer must include the words “RELIGIOUS EXEMPTION” on the center top of each Form 8300 when submitting the paper filed return.
What If My Business E-files Form 8300 Late?
Late Returns
A business must self-identify late returns. A business filing a late Form 8300 electronically must include the word “LATE” in the comments section of the return. For filing a late Form 8300 on paper, the business must write “LATE” on the center top of page 1 of the form.
Late Filing Penalties
The penalties for filing a Form 8300 late for 2023 is $310. However, the penalty is reduced to $60 if filed within 30 days of the due date. Penalties are inflation-adjusted annually. However, those amounts were not available at publication.
What Record Keeping Should Businesses Have Regarding Form 8300?
Record keeping
A business must keep a copy of every Form 8300 it files. In addition, for five following years, they must keep supporting documentation and the required statement sent to customers.
Filing electronically provides a confirmation that the form was filed. However, e-file confirmation e-mails alone don’t meet the record keeping requirement. When e-filing, filers must also save a copy of the form prior to finalizing the form submission. They should associate the confirmation number with the saved copy. Prior to finalizing the form for submission, businesses should save a copy of the form. Either saving the form electronically or printing out copy works.
E-filing
Many businesses have already found the free and secure e-filing system to be more convenient. E-filing is also a cost-effective way to meet the reporting deadline of 15 days after a transaction. Plus, when e-filed, users receive an emailed notification that the form was received. Businesses can also 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 an instruction video
- How to Complete Form 8300 – Part I
- How to Complete Form 8300 – Part II
The short video points out sections of Form 8300 for which the IRS commonly finds mistakes. The video explains how to accurately complete those sections.
For more information, please contact this office.
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