By Pam Sosa

Does your business accept cash payments? If so, the Financial Crimes Enforcement Network (FinCEN) wants to know!

Laws recently passed by Congress have increased the requirements for reporting cash payments in an effort to trace money being laundered and other illegal activities.

For the purposes of this reporting requirement, cash is defined as the coins and currency of the United States (or any other country). Cash is reportable if the cumulative sum received from a single party over a 12-month period exceeds $10,000.

Cash is also defined as a cashier’s check, bank draft, traveler’s check, or money order you receive, if a) it has a face amount of $10,000 or less, and b) you receive it in a designated transaction or any transaction in which you know the payer is trying to avoid the reporting of the transaction on Form 8300.” (How are you supposed to know their intent??).

A cashier’s check, bank draft, traveler’s check, or money order with a face value of more than $10,000 is not treated as cash for filing purposes, because the issuing bank or financial institute is required to report if they purchase them with cash.

If you have previously used FinCEN Form 8300 to report cash receipts, please note that the form was revised 12/2023 and is now a two-page form. Additionally, if your business is required to electronically file information returns, this form must also be filed electronically. (Effective January 1, 2024 anyone filing 10 or more information returns, i.e. 1098, 1099, W2, must file electronically.) To file Form 8300 electronically, a business must set up an account with the Financial Crimes Enforcement Network’s BSA E-Filing System.

Depending upon the amount and timing of cash received, the form must be filed within 15 days of receipt, unless the 15th day falls on a Saturday, Sunday, or legal holiday. You must also give a copy of this statement to each person from whom you are required to report.

Businesses are required to keep a copy of the filed report for five years from the date of filing.

The penalty for intentionally failing to report is the greater of $25,000 or the amount of cash you received, up to $100,000. There are also criminal penalties if you willfully fail to file. You can be fined up to $250,000 for individuals and $500,000 for corporations or be sentenced to up to 5 years in prison or both!! These guys mean business!!

For more information, go to irs.gov and search for Publication 1544 Reporting Cash Payments of Over $10,000.

 

Disclaimer: The above information is intended for information purposes alone and is not intended as legal advice. Please consult with counsel before taking any steps in reliance on any of the information contained herein.

Pam Sosa
Owner, Standard Mortgage Financial Services, Inc.

pamsosa@standardmortgagefinancial.com

(951) 686-9639