Form 8300 Demystified

An overview of cash transaction reporting requirements

§6050I requires reporting certain large cash transactions on Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business. §6050I(a) imposes the following reporting requirement:

Any person who is engaged in a trade or business, and who, in the course of such trade or business, receives more than $10,000 in cash in 1 transaction (or 2 or more related transactions), shall make the return described in subsection (b) with respect to such transaction (or related transactions) at such time as the Secretary may by regulations prescribe.

Person Defined

A person is an individual, a trust, an estate, a partnership, an association, a company, or a corporation. See Treas. Reg. §1.6050I-1(a)(1)(i) and §7701(a)(1).

Trade or Business Defined

A trade or business is a §162 trade or business activity. See Treas. Reg. §1.6050I-1(c)(6). Whether an activity rises to a §162 trade or business depends on the facts and circumstances of the particular situation. See Higgins v. Commissioner, 312 U. S. 212 (1941). In Comm. v. Groetzinger, 480 U.S. 23 (1987), the Supreme Court defined a §162 trade or business activity:

We accept the fact that, to be engaged in a trade or business, the taxpayer must be involved in the activity with continuity and regularity, and that the taxpayer's primary purpose for engaging in the activity must be for income or profit. A sporadic activity, a hobby, or an amusement diversion does not qualify.

Cash Defined

Cash is defined (not surprisingly) as the coin and currency of the United States or of any other country, which circulates in and is customarily used and accepted as money in the country in which it is issued. See Treas. Reg. §1.6050I-1(c)(1)(ii)(A).

Cash also includes a cashier’s check, bank check, traveler’s check (do these even exist anymore?), or money order with a face value of less than $10,000 if it is received in a designated reporting transaction or any transaction in which the instrument is being used to avoid §6050I reporting. A designated reporting transaction is a retail sale of a consumer durable, a collectible, or a travel or entertainment activity; there are exceptions for certain loans, installment sales, or down payments. See Treas. Reg. §1.6050I-1(c)(1)(ii)(B).

The Infrastructure Investment and Jobs Act added §6050I(d)(3), effective January 1, 2024, to include digital assets, as defined in §6045(g)(3)(D), to the definition of cash. Because the IRS is late in revising the regulations under §6050I with respect to this change, the IRS recently announced that no digital asset transactions will have to be reported under §6050I until updated regulations are promulgated.

§6045(g)(3)(D) defines a digital asset as “any digital representation of value which is recorded on a cryptographically secured distributed ledger or any similar technology as specified by the Secretary.” The final digital asset reporting regulations may further refine this definition; the IRS is late in promulgating final regulations.

Transaction Defined

Treas. Reg. §1.6050I-1(c)(7)(i) defines a transaction as

the underlying event precipitating the payer's transfer of cash to the recipient. Transactions include (but are not limited to) a sale of goods or services; a sale of real property; a sale of intangible property; a rental of real or personal property; an exchange of cash for other cash; the establishment or maintenance of or contribution to a custodial, trust, or escrow arrangement; a payment of a preexisting debt; a conversion of cash to a negotiable instrument; a reimbursement for expenses paid; or the making or repayment of a loan. A transaction may not be divided into multiple transactions in order to avoid reporting under this section.

Treas. Reg. §1.6050I-1(c)(7)(ii) provides two situations in which transactions are related (and, therefore, must be aggregated to determine if the $10,000 threshold was exceeded). First, the transactions occur within a 24-hour period. Second, the transactions occur in a period exceeding 24 hours, but the business knows or has reason to know that the transactions are one of a series of connected transactions.

When to File Form 8300

Form 8300 must be filed by the business by the 15th day after the date the cash is received. If there are multiple payments, the Form 8300 filing is triggered when the total payments received with respect to the transaction (or related transactions) exceed $10,000. See Treas. Reg. §1.6050I-1(e)(1).

How to File Form 8300

Starting January 1, 2024, Form 8300 must be e-filed with FinCEN (even though it is a Title 26 requirement) if the business files ten or more other information returns (e.g., W-2s, 1099s) and it is subject to the new electronic filing mandate for information returns.

Businesses not required to file their Forms 8300 electronically can mail them to Internal Revenue Service, Detroit Federal Building, P.O. Box 32621, Detroit, MI 48232. Even if electronic filing is not required for a business, it should strongly consider it regardless of the paper mailing option.

Example 1

This example is based on Treas. Reg. §1.6050I-1(c)(1)(viii), Ex. 1.

David, an individual, purchased gold coins from Mary, a coin dealer, for $13,200. He tenders $6,200 cash and a $7,000 cashier's check to Mary. Because the sale is a designated reporting transaction, the cashier's check is treated as cash for §6050I purposes; therefore, because Mary received more than $10,000 in cash with respect to the transaction, she must file Form 8300 with respect to the sale.

Example 2

This example is based on Treas. Reg. §1.6050I-1(b)(4).

On January 10, 2023, Maurice received an initial cash payment of $11,000 with respect to a transaction in his trade or business activity. He received subsequent cash payments with respect to the same transaction of $4,000 on February 15, 2023, $6,000 on March 20, 2023, and $12,000 on May 15, 2023.

Maurice must file Form 8300 with respect to the payment received on January 10, 2023, by January 25, 2023, because the cash payment exceeded $10,000.

Maurice must also file Form 8300 with respect to the payments totaling $22,000 received from February 15, 2023, through May 15, 2023, by May 30, 2023, because the total previously unreported payments exceeded $10,000 as of May 15, 2023.

Additional Reading

My friend Amber Gray-Fenner, EA, USTCP recently wrote an article for Forbes on Form 8300 titled “A New Provision Of An Old Law Is Confusing Crypto Investors.”

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