MLR

Cash transactions over $10,000 must be filed

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Corporations in the United States are probably familiar with the IRS rules for cash payments in excess of $10,000, but this rule also applies to U.S. territories.

The rule requires companies to fill out Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, when they engage in cash transactions over $10,000. The form must be filed within 15 days of the transaction.

The 24-hour rule applies. This rule requires a business that engages in two or more cash transactions with the same person totaling more than $10,000 in a 24-hour period to treat the transaction as one and report the payments.

In addition to U.S. corporations, the following U.S. territories are affected:

  • American Samoa
  • The Commonwealth of the Northern Mariana Islands
  • Guam
  • Puerto Rico
  • U.S. Virgin Islands

Cash includes the following:

  • U.S. coins and currency
  • Foreign currency
  • Cashier’s checks
  • Bank drafts
  • Traveler’s checks
  • Money orders

A person’s personal checks or business checks are not included.

The IRS is always on alert for these types of transactions. Certain types of businesses are more prone to them than others.

Stores that sell jewelry, furniture, boats, aircraft and automobiles, as well as pawnbrokers, attorneys, real estate brokers, insurance companies and travel agencies should be particularly aware of these rules.

Form 8300 contains the name, address and taxpayer identification number of the person from whom the cash was received. The amount of cash received as well as the date and nature of the transaction must be disclosed.

The IRS uses the information contained on Form 8300 for further investigation.