The IRS has been under a lot of strain since the pandemic. Not only has the agency been tasked with keeping up with every citizen’s tax return situation, but they’ve handled each and every stimulus payment.
The IRS isn’t the only one suffering, though. 2021 has been labeled the most challenging year for taxpayers. That’s because they’ve had to keep up with stimulus payments, advanced tax credits, new streams of side income, self-employment taxes, unemployment benefits taxes, and even new rule changes.
If you have a business or received a lump sum payment, then you’ll also need to make sure you report that income accurately. That means you need to know about Form 8300 and what cash transactions are reported to the IRS.
Keep reading to find out everything necessary about reporting big sums of money and filing a Form 8300.
What Is Form 8300?
At the most basic level, Form 8300 is an official report to the IRS stating that you received $10,000 in cash or more as a payment. While this amount may seem excessive at first glance, there are a lot of reasons why you might get such a high cash payment. Those reasons might be:
- The sale of real property
- Pre-existing debt payments
- Rental of real or personal property
- Making or repaying a loan
- Reimbursement of expenses
- Sale of goods or services
Form 8300 rules dictate that you must also report multiple payments within a single year that amount to more than $10,000. While the Form 8300 instructions mention cash payments, it’s important to understand that “cash” also includes bank drafts, traveler’s checks, money orders, and cashier’s checks.
IRS Form 8300 Requirements
Per federal law, your business is required to file Form 8300 within 15 days of receiving any cash payment over $10,000. Filing this information with the IRS helps the agency track cash transactions.
If you’re wondering what cash transactions are reported to the IRS, then it’s important to understand a new law that went into effect on January 1, 2022. Now, bank transactions reported to the IRS will include everything over $600!
With that in mind, it’s more vital than ever to keep a cash transaction report that monitors every cent of your business’s cash flow. That way, any questions that come up from the IRS can get answered quickly and accurately.
What Happens If a Form 8300 is Filed on You?
One of the most common tax problems happens when a taxpayer is uninformed or misinformed about how to file or report certain types of income. If you’ve paid a substantial amount of cash and didn’t report it, then you might be wondering—what happens if a Form 8300 is filed on you?
First, don’t panic! You should be notified about the filing—the business is required by law to notify you. Plus, you’ll likely know about the situation in advance because you’ll need to provide your TIN to the other party when they file a Form 8300. The other business will be penalized if they don’t attempt to get your TIN when they report the transaction.
How to File Tax Form 8300
A proper IRS Form 8300 reference guide wouldn’t be complete without explaining how to file a Form 8300. Since many Americans do their taxes online, it is possible for businesses to file a Form 3800 completely electronically. Doing so is free; all you have to do is visit the BSA E-Filing system and complete the proper forms. If you’d prefer, then you can print it out and mail it directly to the IRS.
Do you need more detailed information about how to fill out Form 8300 or another tax form? Check out our tax help resources section for more information. If you still can’t find what you’re looking for, then it might be best to reach out directly to a tax expert who can take a look at your personal tax situation and help.
Consequences of Failing to File a Form 8300
If you fail to file a Form 8300 within a timely manner, then you’ll face specific consequences. First, you’ll get fined $100 for each occurrence of failing to file a Form 8300. You could also face additional financial penalties if an investigation reveals that you deliberately attempted not to file a Form 8300 in order to defraud, mislead, or omit information from the IRS. Intentional disregard can lead to fines of up to $250 per violation.
Further, if the IRS determines that you are intentionally being noncompliant and willfully refusing to file a Form 8300 or committing fraud, then they have the legal authority to levy criminal consequences against you, too. You could get charged with a felony offense! Not only does that likely mean you’ll spend time imprisoned, but you could also get fined upwards of $25,000!
Tips to Help You File an IRS Form 8300 Like a Pro
So, how can you remain compliant with the IRS’s many tax laws? One of the best tips we can give is to keep detailed records of all your business transactions. Flag any ones that exceed $10,000, and be sure to note that you filed a Form 8300, too.
If you’ve been slammed with penalty after penalty, then don’t feel like your situation is hopeless. There are plenty of tax relief solutions to explore that could help you reduce or potentially eliminate some of your tax debt. Speak with an expert if you’re interested in learning more about these potential solutions.
Do You Have More Tax Questions?
Do you believe you’ll need to fill out a Form 8300 this year? Are you still unclear on the process, or do you have additional tax questions that weren’t addressed in this article? If so, then it’s important to reach out to a tax expert that can answer your questions one on one.
Leave your tax worries behind with expert guidance from a team that has 30 years of experience working with the IRS. Contact us today to get more information about how we can help you face any tax challenge like a boss!
