What Constitutes a “Cash” Transaction for Purposes of IRS/FinCEN Form 8300?

Most people are aware that cash transactions exceeding $10,000 must be reported to the federal government. However, there are many complexities to this rule of which most people are unaware, including the definition of what constitutes a “cash” transaction. As a result, if you believe that you may be required to file IRS/FinCEN Form 8300 in order to report a cash transaction, it is important that you consult with a Boston IRS tax lawyer prior to doing so.

“Cash” Transactions that Must Be Reported with IRS/FinCEN Form 8300

Before we talk about what constitutes “cash,” let’s begin by discussing what constitutes a “transaction.” As listed in the IRS Form 8300 Reference Guide, transactions that can trigger a reporting obligation include (but are not limited to):

• Selling goods, services, real property or intangible property
• Renting real or personal property
• Purchasing a negotiable instrument
• Exchanging cash for other cash
• Expense reimbursements
• Making or repaying a loan
• Payments on pre-existing debts
• Escrow payments
• Custodial trust contributions

Now, what about “cash”? As explained in the IRS Form 8300 Reference Guide, “[c]ash includes the coins and currency of the United States and a foreign country. Cash may also include cashier’s checks, bank drafts, traveler’s checks, and money orders with a face value of $10,000 or less, if the business receives the instrument in . . . [a] designated reporting transaction . . . or [a]ny transaction in which the business knows the customer is trying to avoid reporting of the transaction on Form 8300.”

For purposes of determining whether a cashier’s check, bank draft, traveler’s check or money order with a face value of $10,000 or less will be treated as cash, a “designated reporting transaction” is the retail sale of any of the following:

• A “consumer durable” that is suitable for personal use, expected to last at least a year and has a sale price greater than $10,000;
• A collectible (such as artwork); or,
• Travel or entertainment, “if the total sales price of all items sold for the same trip or entertainment event in one transaction or related transactions is more than $10,000.”

What Should I Do if I Receive a Cash Payment Greater Than $10,000?

If you own a business, or if you are an artist or entertainer, and you receive a cash payment greater than $10,000, what should you do? You need to report the transaction using IRS/FinCEN Form 8300; but, before you do so, you should consult with a Boston IRS tax lawyer. There may be other business-related tax issues you need to consider as well, and you will want to be sure to address these issues before you notify the IRS of your substantial cash payment.

Request an Appointment with Boston IRS Tax Lawyer Kevin E. Thorn

Do you have questions about filing IRS/FinCEN Form 8300? To request an appointment with Boston tax attorney Kevin E. Thorn, Managing Partner, Thorn Law Group, please call 617-692-2989 or send us your contact information online today.