CARL WATTS & ASSOCIATES

May 06, 2019

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Reporting Requirements for
Cash Payments of $10,000
You have probably some idea about the $10,000 Rule either as a business person or otherwise but, unless you had to deal with such a transaction yourself, you may not know much about it.

In a nutshell, the rule is that, if, in a 12-month period, you receive more than $10,000 in cash from one buyer as a result of a transaction in your trade or business, you must report it to the Internal Revenue Service (IRS) and the Financial Crimes Enforcement Network (FinCEN) on Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business.


The rule came into being as the Bank Secrecy Act (BSA), officially known as the Currency and Foreign Transactions Reporting Act, which was enacted in 1970.

Its main purpose is to help the IRS prevent income tax evasion and to help other governmental authorities to detect and stop money laundering or terrorist activities. Large sums of money are closely monitored and such deposits analyzed to detect unusual behavior or indications of illegal activity. The government relies on financial institutions and business owners to report cash transactions to further its enforcement efforts.

Form 8300 is a joint form issued by the IRS and the FinCEN and is used by the government to combat money laundering and to track tax evaders and other criminals. Here are some more details about reporting such payments.

For purposes of cash payments, a “person” is defined as an individual, company, corporation, partnership, association, trust or estate. For example:

  • Dealers of jewelry, furniture, boats, aircraft, automobiles, art, rugs and antiques;
  • Pawnbrokers;
  • Attorneys;
  • Real estate brokers;
  • Insurance companies;
  • Travel agencies.


A “reportable transaction” relates to the underlying transaction that results in the transfer of cash. These include but are not limited to:

  1. The sale of goods, services, real estate or intangible property (stocks, bonds etc);

  2. Rental of goods, real property and personal property;

  3. Cash exchanged for other cash;

  4. When creating or maintaining a trust or escrow account (i.e. putting $10k in to a living trust for your kids);

  5. A loan is made or repaid;

  6. Conversion of cash to a negotiable instrument (i.e. a check or a bond).

However, you do not have to file Form 8300 if the transaction is not related to your trade or business. For example, if you own a jewelry store and sell your personal automobile for more than $10,000 in cash, you would not submit a Form 8300 for that transaction.

The term “cash” includes U.S. and foreign coin and currency received in any transaction; or a cashier’s check, bank draft, traveler’s check or money order with a face amount of $10,000 or less that is received in a designated reporting transaction, or that is received in any transaction in which the recipient knows that the instrument is being used in an attempt to avoid the reporting of the transaction.

A designated reporting transaction is a retail sale (or the receipt of funds by a broker or other intermediary in connection with a retail sale) of a consumer durable, a collectible, or a travel or entertainment activity.

Cash does not include a check drawn on the payer’s own account, such as a personal check, or “wired” funds from a bank account, regardless of the amount.
A person must report cash of more than $10,000 they received:

  • In one lump sum;

  • In two or more related payments within 24 hours;

  • As part of a single transaction within 12 months;

  • As part of two or more related transactions within 12 months.

Exempt organizations, including employee plans, are also "persons." However, exempt organizations do not have to file Form 8300 for a more than $10,000 charitable cash contribution they receive since it is not received in the course of a trade or business.

The law also requires banks to report any cash transactions that seem intended to get around the $10,000 rule. All transactions that add up to at least $10,000 in one day will get reported as if they are a single transaction. The law requires the bank to report multiple transactions that seem related.

Form 8300 can be filed electronically using the FinCEN’s BSA E-Filing System. E- filing is free, quick and secure. Filers will receive an electronic acknowledgement of each form they file.


Those who prefer to mail Form 8300 can send it to the IRS at the address listed on the form (Internal Revenue Service, Detroit Computing Center, P.O. Box 32621, Detroit, Ml 48232).

If you are required to file Form 8300, you must do so by the 15th day after the date the cash transaction occurred If you receive payments toward a single transaction or two or more related transactions, you must file when the total amount paid exceeds $10,000.


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

This statement must include the name, address, contact person, and telephone number of the business filing Form 8300, the aggregate amount of reportable cash the business was required to report to the IRS from the person receiving the statement, and that the business provided this information to the IRS.

Meeting the proper filing requirement and the requirement to furnish a written statement to each person named on the Form 8300 is very important, because there are potential civil and criminal penalties for failure to file the form.

Penalties for violation of the Form 8300 filing and furnishing requirements have been increased by the Trade Preferences Extension Act of 2015. Increased penalties apply to Form 8300 and related notices requiring filing or furnishing after December 31, 2015. In addition, penalty amounts are now adjusted annually for inflation.

You do not have to file Form 8300 if the entire transaction (including the receipt of cash) takes place outside of the 50 states, the District of Columbia, Puerto Rico, or a possession or territory of the United States.

However, you must file Form 8300 if any part of the transaction (including the receipt of cash) occurs in Puerto Rico or a possession or territory of the United States and you are subject to the Internal Revenue Code.

Keep a copy of each Form 8300 for 5 years from the date you file it.

Form 8300 may also be filed voluntarily for any suspicious transaction (meaning a transaction in which it appears that a person is attempting to cause Form 8300 not to be filed, or to file a false or incomplete form) for use by FinCEN and the IRS, even if the total amount does not exceed $10,000.

You can find detailed information on the topic in Publication 1544, Reporting Cash Payments of Over $10,000, which explains why, when, and where to report these cash payments. It also discusses the substantial penalties for not reporting them.


As always, we urge you to contact your tax or financial professional advisor to make sure you comply with existing legal requirements in any and all financial dealings and tax matters.
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