As a dealer, you need to know that a cash transaction of $10,000 and higher should be considered suspicious. The government certainly does. The IRS Form 8300 Cash Reporting Rule is enforced by both the IRS and the US Patriot Act.
WHY is $10,000 suspicious?
Drug dealers and terrorists often have large amounts of money they don’t want tracked. So the solution is to launder the money by making purchases with “dirty cash”. In the past, these cash payments have been unquestioned by dealerships but it is now the law to report such transactions.
WHY should I report it?
Besides wanting to simply make the world a better place you should submit IRS Form 8300 because, as usual, there are penalties involved. Not filling or interfering with filing can result in civil penalties (fines) or criminal penalties, which may include jail time.
To help you avoid such penalties and be a good citizen we put together this cheat sheet to help you know when to submit the proper paperwork.
Just a Reminder: We’re not your lawyer (of course, right?) Since we’re not, remember that this article’s for informational purposes and not intended to provide legal advice.
Auto Dealers, Get the Guide
This is one of the 21 regs we’ve packaged up into an easy to use handbook and developed a checklist to help you identify who in your dealership is responsible for each of the 21 rules and regulations.
Get the Guide >>
The information above is an excerpt from a policy provided by one of our partners, Hudson Cook LLP. We work with them and other industry experts to make sure we are providing accurate and current information, and we manage that information in an online Compliance Management System. One of the benefits of using a Compliance Management System is that it houses all the policies and guidelines you need to be aware of for your industry so you don’t have to go hunting down information; it is simply at your fingertips.