Report of Cash Payments Over $10000 Received in a Trade or Business

Report of Cash Payments Over $10,000 Received in a Trade or Business Presented by: Mansoor Rahman Regulatory Compliance Officer Student Financial Services Disclaimer - This presentation is meant for the purposes of awareness. It is not meant to provide legal advice or information other than what is provided in the federal regulations. As always, seek legal council where necessary. What we’ll cover        What and why - F8300 Who files Cash defined and exceptions Cashiering function and actions Disclosure to payers Penalties What to do if contacted by the IRS Reporting Payments Over $10,000 What is F8300 and why  The method used the IRS to track payments of $10, 000 or more received by a person in a 12-month period. Why? Congressional laws require it Money laundering and tax evasion Terrorist activity (USA Patriot Act of 2001) Reporting Payments Over $10,000     Who must file  Each person engaged in a trade or business who, in the course of that trade or business, receives more than $10,000 in cash in one transaction or in two or more related transactions, must file Form 8300. “Person” defined … An individual, corporation, partnership, trust, estate, association, or company. Reporting Payments Over $10,000   Form 8300 (Revised March 2008) Reporting Payments Over $10,000 What payments are reported?  Over $10K One lump sum Installment payments within 12-months Previously unreported payments which cause 12-month total to exceed $10K Reporting Payments Over $10,000    “Cash” defined    U.S. and foreign coin and currency Cashier’s check** Money order**   Bank draft** Traveler’s check** ** If face amount is over $10,000, then report is made by the issuing bank Reporting Payments Over $10,000 What is NOT “Cash”  Cash does not include a check drawn on the payer’s own account, such as a personal check, regardless of the amount. Wire transfers are not reported  Reporting Payments Over $10,000 Exceptions Cash is not required to be reported if it is received by a financial institution required to file Form 104,(Currency Transaction Report.) See Publication 1544 for more information about “exceptions” payments. Reporting Payments Over $10,000 Cashier actions    Ensure your cashiering system has controls Have your business process in place What does the cashier need   Policy and procedure Checklist   Determine who will complete F8300 Report the payment within 15 days Reporting Payments Over $10,000 Taxpayer identification number  Three types: In most cases it is the SSN Nonresident students may have an ITIN TIN’s may be issued to others including corporations, partnerships, etc. these are shown as an EIN Reporting Payments Over $10,000    Missing TIN – what to do? You must furnish the correct TIN of the person or persons from whom you receive the cash If you are not able to get a TIN, file the report and attach a statement explaining why the TIN is not included. Reporting Payments Over $10,000 Disclosure statement You must give a written or electronic statement to each person named on a required Form 8300 on or before January 31 of the year following the calendar year in which the cash is received. Reporting Payments Over $10,000 Disclosure must be provided The disclosure must show:  The name, telephone number, and address of the information contact for the business, the aggregate amount of reportable cash received, and that the information was furnished to the IRS.  Keep a copy of F8300 and statement for your records. Retain for five years. Reporting Payments Over $10,000 Penalties  You may be subject to penalties if you fail to file a correct and complete Form 8300 on time and you cannot show that the failure was due to reasonable cause. A minimum penalty of $25,000 may be imposed if the failure is due to an intentional or willful disregard of the cash reporting requirements. Reporting Payments Over $10,000  What to do if contacted by IRS  You may be contacted if information on the report is missing or incorrect Call the number provided if you have questions Do not miss the deadline shown on the letter Reporting Payments Over $10,000   How to track your payments  Your cashiering system should have this functionality Contact your IT department or vendor and ask about reporting options  Reporting Payments Over $10,000 Resources  On the web at:   IRS web site – www.irs.gov FinCEN web site – www.fincen.gov 8300questions@irs.gov     • F8300 Questions:  • Form 8300 and Pub 1544, available in English and Spanish: • Ordered by phone at: 1-800-829-3676 or • On line: www.irs.gov then forms and publications Reporting Payments Over $10,000 Bottom line take-away  Report payments over $10K within 15 days Do you have controls to track payments? Work with vendor and IT group   Reporting Payments Over $10,000 Thank you! Reporting Payments Over $10,000