Form 8300: what to do when your business receives more than $10,000 in cash

A business that receives more than $10,000 in cash in one transaction, or in related transactions, must report it to the IRS and FinCEN on Form 8300. The rule covers any trade or business, not only banks. Related transactions are payments within a 24-hour period or those you know are connected, such as installments on one purchase.

Cash means currency. In some situations it also includes cashier's checks, money orders, bank drafts, and traveler's checks with a face value of $10,000 or less. A personal check or a wire transfer is not cash under this rule. The details depend on the type of transaction, so check the form's instructions.

You need the payer's name, address, taxpayer ID, and occupation, and you generally verify identity with an official document. Record the date and amount, the nature of the transaction, and the form of payment. Ask for this information at the time you accept the payment.

File the form within 15 days of receiving the payment. You must also give the person named on the form a written notice by January 31 of the following year. Keep a copy of the form for five years. Check the instructions on how to submit, including electronic filing.

Breaking a large payment into smaller ones to avoid the filing is called structuring and is a crime, for the customer and for a business that helps. If a customer suggests it, decline. You can also report suspicious transactions even if the amount is below the threshold.

Add the process to your payment procedures. Whoever receives cash should know what evidence to collect and which qualified reviewer assesses reporting. Form 8300 is distinct from a Suspicious Activity Report; follow its current instructions for filing, customer statements, and any applicable exceptions.