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PROCEDURE & ADMINISTRATION
INDIVIDUALS

structuring are the same as those for or travel/entertainment activities) cash to a secure folder for future reference
failing to file a return or filing a false or can include financial instruments such as as necessary.
incorrect return.86 certified or cashier’s checks, bank checks, Best practices also encourage the
or traveler’s checks. It is also important use of point-of-sale systems that track
Criminal penalties for employees to understand what is not payments received from customers and
If a person willfully violates any cash for reporting purposes: personal document the form of payment received.
provision of Sec. 6050I, the violation is checks; ATM, debit card, and credit card Being able to identify and segregate
a felony punishable with of fine of up payments; wire transfers; and financial cash, and identify financial instruments
to $25,000 ($100,000 for a corporation) instruments with face values of more that may be considered cash, is critical
and imprisonment of up to five years, than $10,000. Also, make sure clients for adequate compliance. The IRS has
or both; this applies to a failure to file are aware of the pending inclusion of emphasized the need for businesses to
a return, a failure to furnish a customer cryptocurrencies as cash for Form 8300 retain records that identify and distin-
statement, and structuring.87 Further, any reporting purposes. guish the types of payments received.90
person who knowingly files a false Form Perhaps the best way to educate staff Systems will, ideally, generate reports
8300 made under penalties of perjury is by providing examples, and the IRS that identify payments that require Form
can be fined up to $100,000 ($500,000 offers multiple resources that illustrate 8300 reporting, including payments that
for a corporation) and imprisoned up to what constitutes cash in the Form 8300 must be aggregated (e.g., down pay-
three years, or both.88 Reference Guide as well as in IRS ments and subsequent installment pay-
Publication 1544. However, given the ments). This is particularly important,
Practice implications wide diversity of businesses that may be as the Form 8300 must be filed 15 days
The reporting requirements for the subject to the reporting requirements,89 after the $10,000 threshold is reached.
Form 8300 can impose challenges on practitioners can lend assistance by
businesses that accept cash in their providing cash transaction examples Advise against any ‘structuring’
course of business, particularly those tailored to their client’s unique industry conversations
businesses that infrequently accept and circumstances. Employees should also be cautioned that
large cash payments and thus may not structuring transactions to avoid report-
be aware of the reporting requirements. Impress upon your clients the ing is prohibited. Customers may object
Outlined below are some recommenda- need for adequate procedures to the filing of a Form 8300. Employees
tions for dealing with clients who may and controls when collecting must not engage in conversations with
encounter cash transaction report- cash transaction data them that discuss methods of avoiding
ing obligations. Data collection and information the reporting requirements, including
tracking procedures are extremely any methods of breaking up large cash
Alert clients as to the importance important for Form 8300 compliance. transactions into smaller ones or other-
of educating their employees on Upfront information collection from wise disguising the true amount of cash
cash reporting the customer is essential. Collection in the transaction.
It is important that businesses take steps of a Form W-9 from customers before
to ensure that employees understand accepting sales orders is good practice Encourage checking and
the basic federal reporting requirements and provides the requisite TIN. correcting the compliance
for cash payments over $10,000 and Personnel involved in reporting a cash system
understand what is considered “cash.” As transaction are required to examine If a system is in place for Form 8300
noted previously, the receipt of cash gen- identification documentation for the reporting, it needs to be periodically
erally means currency and coin, but for additional Form 8300 information checked and reviewed for continuing
certain transactions (i.e., retail sales in- required; it is good practice to copy or compliance. This is one area where
volving consumer durables, collectibles, scan the documentation and save it practitioners can provide significant

86. Sec. 6050I(f)(2). 89. IRM §4.26.12, Examination Techniques for Form 8300 Industries, lists 13
87. Sec. 7203. broad industry categories that potentially have Form 8300 filing require-
88. Sec. 7206(1). ments, and within these categories, more specific industries are noted
and discussed.
90. Purser Truck Sales, Inc., 710 F. Supp. 2d 1334 (M.D. Ga. 2008).

40 May 2022 The Tax Adviser