The Internal Revenue Service (IRS) instructs businesses to electronically file their forms to report cash payments exceeding $10,000 starting January 1, 2024.
According to the IRS, every business must electronically file Form 8300, Report of Cash Payments Over $10,000, instead of a paper declaration in the new year. This new requirement follows the IRS´s publication of final regulations modifying the rules for electronic filing on Form 8300.
However, in those same regulations, the IRS noted that some businesses may request an exception from the new requirements. "If not filed electronically, Forms 8300, Report of Cash Payments Over $10,000 received in a trade or business, are instead filed electronically through the Financial Crimes Enforcement Network (FinCEN) BSA electronic filing system.
Nevertheless, businesses receiving over $10,000 in cash must report the transactions to the federal government. The IRS acknowledges that most cash transactions are legitimate. Still, the information reported on Form 8300 can prevent tax evasion and proceeds from illegal activities such as drug trafficking, terrorism financing, and other criminal activities.
The IRS acknowledges that the government can often trace money from these illegal activities through timely, complete, and accurate filings on Forms 8300.
The new requirement for electronic filing applies to businesses mandated to electronically file other types of informational returns, including Forms 1099 and W-2. Starting in 2024, companies must electronically file all Forms 8300 and other informative reports that must be filed in a given calendar year if they must file at least ten separate reports on Forms 8300.
Businesses facing difficulties meeting the requirement can request an exception to electronic filing of reports using Form 8508, Request for Waiver from Filing Information Returns Electronically. If the IRS grants an exception to electronically filing any informational return, the exception automatically applies to all Forms 8300 for the rest of the year. However, a business cannot request an exception for electronic filing solely for Form 8300. When submitting a paper-filed declaration, companies must include the word "Exception" at the top center of each Form 8300 (page 1).
For more information, consult your tax preparer.