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Form 8300 Penalties Increase

Trades and businesses that receive more than $10,000 cash for their business transactions must report these payments to the Internal Revenue Service within 15 days of the transaction using Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business.

In addition to filing Form 8300 with the IRS, companies need to furnish to each person whose name is required to be included in the Form 8300 a written statement by January 31 of the year following the transaction. The statement must include:

  • The name, address, contact person, and telephone number of the business filing Form 8300;
  • The aggregate amount of cash the business reported to the IRS;
  • A statement that the business provided this information to the IRS.

Cash reporting is a requirement of both the Internal Revenue Code and the Bank Secrecy Act. It is important that businesses comply with these laws to assist the IRS and the Financial Crimes Enforcement Network in their efforts to combat money laundering and to avoid potential civil and criminal penalties.

Penalties for violation of the Form 8300 filing and furnishing requirements of IRC 6050I have been increased by the Small Business Jobs and Credit Act of 2010, which amended IRC penalty sections 6721 and 6722.

The amendments apply with respect to Forms 8300 required to be filed and related notices required to be furnished on or after January 1, 2011.

Failure to File

IRC 6721(a)(1), providing the penalty for failure to file a timely and correct Form 8300, is amended to raise the penalty from $50 to $100. The aggregate annual limitation (ceiling) has been raised in the case of businesses with gross receipts exceeding $5 million from $250,000 to $1,500,000. For businesses with gross receipts not exceeding $5 million the aggregate annual limitation has been raised from $100,000 to $500,000.

IRC 6721(b)(1), which applies when the failure is corrected on or before 30 days after the required filing date, is amended to raise the penalty from $15 to $30. The aggregate annual limitation has been raised in the case of businesses with gross receipts exceeding $5 million from $75,000 to $250,000. For businesses which correct the violation on or before 30 days after the required filing date and also have annual gross receipts not exceeding $5 million, the aggregate annual limitation is raised from $25,000 to $75,000.

Failure to File Intentional Disregard

IRC 6721(e)(2)(C), the intentional disregard penalty for failure to file a timely and correct Form 8300, provides a penalty of the greater of $25,000 or the amount of cash received in such transaction not to exceed $100,000. It has not been changed. There is still no aggregate annual limitation (ceiling) for intentional disregard of Form 8300.

Failure to Furnish

IRC 6722, “Failure to Furnish” a statement to the persons whose names were required to be included in the Form 8300, was completely rewritten.

The “Failure to Furnish” penalty, 6722(a)(1), has been raised from $50 to $100 per violation. The aggregate annual limitation has been raised from $100,000 to $1,500,000. In the case of a business having gross receipts not more than $5 million, the aggregate annual limitation is $500,000.

If the violation is corrected on or before 30 days after the required furnishing date, 6722(b)(1), the penalty has been reduced from $50 to $30 and the aggregate annual limitation has been increased from $100,000 to $250,000. In the case of a business which corrects the failure on or before 30 days and has gross receipts not more than $5 million, the aggregate annual limitation is $200,000.

Failure to Furnish Intentional Disregard

IRC 6722(e), intentional disregard of furnishing requirements, increased the penalty from the greater of $100 or 10 percent of the aggregate amount of the items required to be reported correctly to the greater of $250 per failure or 10 percent of the aggregate amount of the items required to be reported correctly, with no annual aggregate limitation.

Inflation Adjustment

An adjustment to the penalties for inflation will be made every five years following 2012.

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Page Last Reviewed or Updated: 24-Mar-2014