Large Cash Payments Could Trigger IRS Filings—Are You Prepared?

The IRS requires taxpayers to follow strict rules for reporting cash transactions above $10,000. This requirement affects everyone, from an independent contractor to a retailer that accepts cash payments from long-time customers. Other types of businesses that often report cash payments include car dealers, construction contractors, real estate firms, jewelry dealers, casinos and pawn shops. The IRS recently updated the rules for certain taxpayers. Here’s what you should know to stay in compliance — and avoid potentially hefty penalties.

How It Works

Under rules coordinated by the IRS and the Financial Crimes Enforcement Network (FinCEN), a person or business must report certain large cash transactions by filing Form 8300, “Report of Cash Payments Over $10,000 Received in a Trade or Business.” This form is required for any taxpayer that receives more than $10,000 in cash in a single transaction (or in two or more related transactions) while conducting a trade or business activity. Generally, any transactions occurring within a 24-hour period are considered related transactions.

For example, if you sell a customer goods for $12,000 and receive $6,000 this afternoon and $6,000 tomorrow morning, you must file Form 8300 — no questions asked.

However, the 24-hour rule for related transactions isn’t ironclad. The reporting requirements still apply to transactions occurring more than 24 hours apart if the recipient knows that multiple payments are part of a related series of transactions. So, in the hypothetical example, if you expect to receive the second $6,000 payment two weeks after the initial payment, the transactions would still be subject to the cash reporting rule.

Important: Under a rule that went into effect on January 1, 2024, a trade or business must now file 8300 forms electronically if it’s otherwise required to e-file certain other information returns electronically, such as W-2s and 1099s.

Broad Scope

For these purposes, “cash” is defined as including the following:

• U.S. and foreign coin and currency received in any transaction, or
• A cashier’s check, money order, bank draft or traveler’s check having a face amount of $10,000 or less that’s received in a designated reporting transaction or in any other transaction in which the recipient knows that the instrument is being used to avoid the reporting requirements.

However, cash doesn’t include a check drawn on a bank account, such as a personal check, regardless of the amount.

The cash reporting rules apply to:

• Individuals,
• C and S corporations,
• Partnerships,
• Limited liability companies (LLCs), and
• Other business entities, associations, trusts and estates.

The IRS points out that dealers in jewelry, furniture, boats, aircraft or automobiles; pawnbrokers; attorneys; real estate brokers; insurance companies; and travel agencies are among those who typically must file Form 8300. The list also extends to “gig economy” workers, such as ride-share drivers and temporary landlords.

What about tax-exempt organizations? Qualified organizations don’t have to report legitimate charitable donations exceeding $10,000. However, under separate IRS rules, a donor often must obtain a written acknowledgement from the charity to claim an itemized deduction for monetary charitable gifts. Also, the organization must report noncharitable cash payments — such as income from renting out part of its building — on Form 8300.

Detailed Reporting Requirements

Generally, Form 8300 must be filed by the 15th day after the date the cash payment of $10,000 was received. For related transactions, if the initial cash payment is less than $10,000, the form must be filed by the 15th day after the total payments received exceed the $10,000 threshold. (If the due date falls on a weekend or legal holiday, the form must be filed on the next business day.)

In addition, you must comply with an annual filing requirement: You must provide a written statement to each person for whom you’ve completed a Form 8300 during the tax year. This statement must include:

• The name and address of the recipient,
• The payor, including a name and contact person,
• The total amount of cash received during the 12-month period, and
• A statement informing the person that you’ve filed Form 8300.

The annual filing is due by January 31 of the year following the year of the cash payment.

Form 8300 is filed with the IRS if it’s submitted on paper. Conversely, electronically filed forms must be sent to FinCEN. These agencies are jointly responsible for enforcing the Form 8300 requirements.

The IRS also requires a business to keep a copy of every Form 8300 it files, along with any supporting documentation and the required statement it sends to customers, for five years from the filing requirement. Filing electronically will provide a confirmation email that the form was filed, but this confirmation doesn’t satisfy the recordkeeping rules. E-filers must save or print a copy of the form before finalizing the form’s submission. A business should associate the confirmation number with the saved copy.

Penalties for Noncompliance

The penalties for failing to file a timely Form 8300 can be substantial. Depending on the situation, you may face three potential alternatives:

1. Negligent failure. The penalty for negligent nonfiling or omission is $250 per return ($50 if corrected within 30 days). The maximum annual penalty is $3 million for businesses ($1 million for businesses with less than $5 million in gross receipts).

2. Intentional disregard. There’s no annual limit on the penalty for intentional disregard of the rules. For each failure, the penalty is the greater of 1) $25,000, or 2) the cash amount received, up to $100,000. A willful failure to file or filing a false form can also result in criminal penalties, including fines and a prison sentence.

3. Failure to furnish annual statements. Penalties of varying amounts may also apply for failing to provide annual statements to individuals, depending on whether the failure was negligent or due to intentional disregard.

Get It Right

Clearly, there’s more to the Form 8300 requirements than first meets the eye. Work with your tax advisor to ensure that you meet all your obligations relating to cash transactions, including any reporting, filing and record retention requirements.

Copyright 2025

This article appeared in Walz Group’s September 8, 2025 issue of The Bottom Line e-newsletter, produced by TopLine Content Marketing. This content is for informational purposes only.