Did you purchase a vehicle, jewelry, or another high-priced item using over $10,000 in cash recently? If so, the seller should have filed a Form 8300 with the Internal Revenue Service. It may leave you wondering, “What happens if a Form 8300 is filed on you?”
Thankfully, you shouldn’t have to worry too much about a business filing a Form 8300. It doesn’t necessarily indicate any wrongdoing on your part and is considered a regular part of essential accounting services.
However, you should have a general understanding of Form 8300 and how it could potentially impact you in the future. Learn more below.
Form 8300 is also commonly called a “Report of Cash Payments Over $10,000 Received in a Trade or Business.” It’s a document the IRS created for money laundering prevention. It also helps the IRS identify cases involving tax evasion and other financial-related criminal activities.
This might lead you to think that having Form 8300 filed on you suggests the IRS may believe you’ve committed a financial crime. But this is rarely true.
Instead, it simply shows that the seller who accepted $10,000 or more in cash when you purchased a vehicle, jewelry, etc., complies with the IRS’s Form 8300 notification requirements. To remain in tax compliance, those who take part in cash transactions worth over $9,999.99 must file the appropriate financial documentation, including Form 8300, or face IRS penalties.
Even after finding out what it is, you may still wonder, “What happens if a Form 8300 is filed on you?” It’s perfectly natural to feel anxious when you receive a notice from the IRS, especially when you aren’t expecting one.
So, how should you respond to receiving a notice indicating that a Form 8300 has been filed on you? Take these steps:
There is a slight chance you may face additional IRS scrutiny and possibly even increase your audit risk when Form 8300 is filed on you. Keeping meticulous records will help you respond to any questions the IRS might have about large financial transactions.
Knowing what happens if a Form 8300 is filed on you should make you feel slightly better about receiving an IRS notice about it in the first place. As long as you’ve kept the right records, you can answer any IRS scrutiny you might face accordingly.
However, if the IRS decides to audit a tax return because of a Form 8300 filed on you, it’s worth bringing a tax professional on board to represent you. They will ensure you have all your financial affairs in good order before you respond to the IRS and start the auditing process.
Did the IRS send you a notice about a Form 8300 that was filed on you by a business? Don’t hesitate to touch base with a tax professional from Levy & Associates for assistance.
We will offer a more thorough answer to the question, “What happens if a Form 8300 is filed on you?” We will also stay by your side if the IRS decides to audit one of your tax returns.
Call us at 313-447-1704 or complete this brief form to speak with a tax professional.
Levy & Associates is available for free initial consultations. We’re happy to answer any questions you have about the audit process or address any concerns about your specific situation.
There’s never a good time to be audited, and the time-consuming process will take away from your business or family if you try to face it alone. Let us handle and coordinate communication, so you can return to your daily life.