The USA Patriot Act of 2001 made several changes to the Bank Secrecy Act. One of those changes requires any trade or business conducting a cash transaction totaling $10,000 or more to report the transaction. This reporting requirement fostered the creation of Form 8300.
Within 15 days of when a cash transaction totaling $10,000 or more occurs, the business receiving the cash from the transaction must report on Form 8300 their identifying information as well as the identifying information for the individual from whom the cash was received and the identifying information for the person for whom the transaction was conducted. Identifying information includes name, address and a tax identification number. Additionally, the method of payment and a description of the transaction must be included in the statement. In order to follow proper reporting procedures, it is important to know what is considered “cash” and what is considered a ”transaction”. A transaction can occur in one lump sum or through a series of related payments/transactions. Cash is considered money in USD or other currency including certain monetary instruments (under specific circumstances) such as a cashier’s check, bank draft, traveler’s check or money order. In addition to filing Form 8300, all businesses that do so must provide written notice of such filing to each individual reported by January 31 of the following calendar year.
Businesses failing to comply with Form 8300 and related notice requirements are subject to penalties recently amended through the Small Business Jobs and Credit Act of 2010. These penalties apply to each occurrence and vary depending on intent and length of time it took to correct the failure with limitations determined by the amount of gross receipts conducted by the business.
Any business questioning Form 8300 reporting requirements or facing related penalties/investigations should contact Moskowitz LLP for further assistance.