| If you receive cash in excess of $10,000 from one | | | | However, if the buyer gives a personal check of |
| single buyer, or a single individual for whatever reason, | | | | $7,000 instead Of cashier’s check, then such |
| during the past 12 months, you must report it to the | | | | personal check is not included in cash transaction and |
| IRS. Failure to do this can attract severe penalties. | | | | the entire transaction need not be reported to the |
| If you receive $10,000 or more in cash from a single | | | | IRS. In another variation, if you receive $14,000 |
| buyer for a transaction in your business, you have to | | | | entirely in cashier’s check, then such transaction |
| report that transaction to IRS and also to the Financial | | | | need not be reported. |
| Crimes Enforcement Network (FinCEN). Some people | | | | If you are a travel agent and your customer asks you |
| may do large cash transactions to support their illegal | | | | to book a charter airplane to take a group of people |
| activities. Your reporting of cash transactions | | | | to another city, and also asks you to book for tale |
| provides valuable information for stopping the tax | | | | rooms and admission tickets, and you quote an |
| evaders. | | | | amount of $15,000 as a package, and a customer |
| If you are in a trade or business and receive more | | | | pays you this amount in two cashier’s checks of |
| than $10,000 in cash into a single transaction or in | | | | $7,000 and $8,000, such a transaction is considered as |
| several installments relating to one transaction, you | | | | cash transaction and it must be reported. |
| have to report it by filing Form 8300 for such a | | | | However, if you are a car dealer and a customer |
| transaction. You may be a jeweler, a furniture maker, | | | | buys a new car from you at a price of to $12,000, and |
| a pawnbroker or a travel agency and may come | | | | pays you $3,000 in cash and $9,000 by cashier’s |
| across such transaction. | | | | check, telling you that the cashier’s check is the |
| However if such transaction is not related to your | | | | proceeds of the bank loan and includes instructions to |
| business, you need not file this form 8300. So if you | | | | you to have a lien put on the car as a security for the |
| are a furniture maker and sell your vehicle for more | | | | loan, such transaction is not treated as Cash and need |
| than $10,000 in cash, you need not summit this form. | | | | not be reported. |
| A ‘transaction’ includes sale of goods or | | | | You must furnish the correct Taxpayer Identification |
| services or property, renting of property, making or | | | | Number (TIN) of the person or persons from whom |
| repaying loan, or converting cash into a negotiable | | | | you receive cash for these transactions. If you are |
| instrument like a check on a bond. A ‘person’ | | | | not aware of the TIN, you must ask for it. The TIN |
| includes an individual, a partnership, a trust, a | | | | for an individual or a sole proprietor is the social |
| corporation, a company or an association. However | | | | security number of such an individual. For a |
| the exempt organizations receiving more than $10,000 | | | | non-resident alien, it is the ITIN (IRS individual taxpayer |
| as a charitable cash contribution are not required to | | | | identification number). For operations or partnership, |
| report such transactions on Form 8300 as it is not a | | | | TIN is the employer identification number (EIN). |
| business transaction. | | | | Related or suspicious transactions |
| Any clerk of the Federal or state court receiving more | | | | You must report related transactions to the IRS. So |
| than $10,000 in cash as bail for an individual who is | | | | if a client pays you as a travel agent $9,000 in cash |
| charged with any Federal offence involving a | | | | for a trip and two days later he pays $5,000 to include |
| controlled substance, or racketeering, money laundering | | | | another person on such trip, then these are treated as |
| or any offence similar to these, must report such | | | | related transactions and must be reported in Form |
| transaction by filing Form 8300. | | | | 8300 to IRS. |
| If you receive cash payments in installments during one | | | | Similarly if you sell two products for $7,000 each to the |
| year of the initial payment and all of such payments | | | | same person in one day and the customer pays you |
| cross more than $10,000, you must report it to the IRS. | | | | in cash, they are treated as related transactions as the |
| ‘Cash’ means the coins and currency of the | | | | total is $14,000 which is more than $10,000. |
| United States or any other country. However, if you | | | | If a transaction appears to be suspicious to you, as a |
| receive cashier’s check, a bank draft, a | | | | sign of possible illegal activity, you may voluntarily file |
| traveler’s check, or a money order as part of the | | | | Form 8300. You can also call the local IRS criminal |
| transaction supplementing cash, you must report such | | | | investigation division as soon as possible. |
| transaction. So for a transaction of $14,000 if you | | | | There are several civil and criminal penalties for failure |
| receive cash $7,000 and the cashier’s check of | | | | to report such transactions. If you willfully fail to file |
| $7,000, this transaction must be reported to the IRS as | | | | Form 8300, you can be fined up to $250,000 or |
| the cashier’s check is treated as cash here. | | | | sentenced up to five years in prison or both. |