IRS Form 8300 is completed by the receiver of the “cash,” not the remitter.
As a reminder, the IRS defines “cash” to include (a) coins and currency (U.S. and foreign), and (b) cashier's checks, bank drafts, traveler's checks and money orders, with a face value of $10,000 or less.
“Cash” does NOT include (a) personal checks drawn on the account of the writer, nor (b) a cashier's check, bank draft, traveler's check or money order with a face value of more than $10,000.
The latest version of the form can be downloaded from www.irs.gov. The form is made up of four parts. To properly complete the form, the preparer will need:
✓ A copy of the remitter’s identification
✓ The remitter’s U.S. Taxpayer Identification Number (TIN)
✓ The remitter’s occupation and the principal’s occupation
A U.S. Taxpayer Identification Number is a generic term which includes:
✓ A Social Security Number (SSN),
✓ An Individual Taxpayer Identification Number (ITIN) or
✓ An Employer Identification Number (EIN) [if an entity].
The settlement agent should request the TIN using IRS Form W-9. The IRS instructions indicate this is the proper method to obtain the TIN which is being reported to the IRS. Following this procedure provides the settlement agent with protection from fines or penalties, should the person provide an incorrect TIN or refuse to provide one.
When the “cash” is remitted by a third party on behalf of a principal to the transaction, obtain the identification and U.S. TIN from the remitter and the buyer. Should the remitter fail to provide the requested information, contact management for additional directions. Be sure to document the file with evidence of when and how the TIN was requested and include copies of the correspondence sent to them.
To ensure proper delivery, send the form to the IRS by certified mail, return receipt requested or by overnight delivery. Failure to file a correct, complete and timely form may result in significant penalties.
In addition to reporting the “cash” payments, the IRS requires the filer of the form to provide a written statement to each person named in IRS Form 8300. The statement must be sent on or before January 31st of the year following the calendar year in which the “cash” is received. Although the remitter has a deadline, there is no reason to wait. The notice can and should be sent as soon as the Form is filed.
The statement must show the filer’s company name and branch address who received the “cash,” the name and phone number of a contact person, the total amount of reportable “cash” received and acknowledge that the information was furnished to the IRS.
Keep the form and a copy of the statement for five years. Operations should designate a contact person for all IRS Form 8300s filed by the operation within the calendar year.
Next month we will discuss how to properly complete each part of Form 8300.
The information provided herein does not, and is not intended to, constitute legal advice; instead, all information, and content, in this article are for general informational purposes only. Information in this article may not constitute the most up-to-date legal or other information.
Article provided by contributing author:
Diana Hoffman, Corporate Escrow Administrator
Fidelity National Title Group
National Escrow Administration