Any business or person that receives over $10,000 in cash as part of business transaction must complete a document called Form 8300. This form is used by the IRS and the Financial Crimes Enforcement Network (FinCEN) to track people who may be evading taxes or profiting from criminal activities.
Compliance with Form 8300 regulations is very important for car dealers which often receive cash payments from their customers. If you ever take cash from a customer, you must be aware of Form 8300 and how to comply with this federal regulation.
One very important fact to consider is that the $10,000 threshold does not apply only to single transactions. Even if a customer is paying in instalments, if the yearly total exceeds $10,000, you must still file a Form 8300. Various other conditions can also add to the $10,000 limit including previously unreported payments, related transactions, and more.
It’s also important to understand that cash does not mean only literally American currency. Other financial instruments including cashier's checks, bank drafts, money orders, and more can all be considered cash under the requirements of Form 8300 regulations if they have a face value of under $10,000.
There are various other specific points of correct Form 8300 compliance. You must train your staff to comply with these requirements at all times to avoid penalties. Items to consider include:
Form 8300 compliance is one of many important legal and regulatory issues facing today’s car dealers. If you have not carefully considered how to comply with Form 8300 and other laws, you are in danger of facing serious federal penalties.