How to Complete Form 8300 – Part I

Submitting a complete and correct form 8300, the report of cash payments over $10,000 received in a trade or business, is important. It relieves you of the burden of additional work when a rejected form is sent back to you to correct, and then to resubmit. It also helps you avoid penalties. And the information you report is important to help combat illegal activities. The government can often trace money from these illegal activities through the payments reported on this and other reporting forms, such as a currency transaction report. Although many cash transactions are legitimate, did you know that information reported can help stop those who evade taxes, profit from the drug trade, and engage in terrorist financing? So, always complete the entire form. Now, let's get started with key points on how to complete this important form beginning at the top. Look at item 1B, Suspicious Transaction. If the transaction with your customer appears legitimate, you can skip this item. But, if it appears someone bringing cash to you is attempting to cause you to file an incomplete form, a false form, or to not file a form at all, this is suspicious. You report this transaction by checking box 1B, and you describe what was suspicious about the transaction in the comments section of the form. While you are not required to file Form 8300 for transactions under the $10,000 threshold, the IRS highly encourages you to report transactions you believe to be suspicious on a Form 8300. Keep in mind, forms marked suspicious are handled confidentially. Normally, you must provide a payee statement prior to January 31st of the following year to the person who paid you, indicating that you sent this information to the The only exception is if the transaction was not over $10,000 and you only filed because the transaction was suspicious. Note, some filers use Form 8300 as the payee statement for a single transaction. Providing a copy of Form 8300 to the named person, although not prohibited, is not advisable due to the sensitive information contained on the form. For example, the Employer Identification Number, commonly called an EIN, or Social Security Number, commonly called the SSN of the filer. If a Form 8300 is marked suspicious and meets the threshold, then a payee statement would be required. Under no circumstances do you provide the Form 8300 as the payee statement if the form is marked suspicious. Let's move to Part 1 of the form. Most transactions are between an individual and a trade or business. However, there are times when multiple individuals are involved in the transaction. To complete the form correctly, you must include everyone who was involved in a transaction. Part 1 is where you give information about those individuals. If more than one person conducted the transaction, you check the box for Item 2. You would complete Part 1 on Page 1 for any one of the individuals. Then, provide the same information for the other individuals by completing Part 1 on Page 2 of the form. If more than three individuals are involved, provide the same information in the comments section on Page 2 of the form. For example, if an automobile dealership sells a car to a customer and receives cash payments from the customer, the customer's parents, the dealership would check the box for Item 2. Include information for one of the individuals in Part 1 on Page 1, and include information for two of the other individuals in Part 1 on Page 2. While we're in Part 1 of the form, it's important to point out that details matter. As mentioned earlier, Form 8300 is a useful report, especially to those who work to combat illegal activities. Remember, you must complete the entire form. Look at Item 13. It asks for occupation, profession, or business of the individual providing the cash. Here, you want to fully describe the nature of the occupation, profession, or business. For example, use plumber, attorney, or automobile dealer. Don't use general or nondescriptive terms such as businessperson or self-employed. If the individual is retired or unemployed, describe the individual's previous occupation, such as retired attorney or unemployed roofer.