When and How to File Cash Payments for Tax-Exempt Organizations

Do you ever receive cash in a trade or business and wonder what you need to report—if anything?

The IRS requires an organization to file IRS Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, if a person receives $10,000 in a single transaction or $10,000 over a 12-month period from one buyer in a single transaction or in a series of related transactions.

Here’s an overview of Form 8300 filing requirements, definitions, and deadlines not-for-profit organizations should know.

Key Definitions

Transaction

The IRS defines a transaction as occurring when one of the following criteria is met:

  • Goods, services, or property is sold
  • Property is rented
  • Cash is exchanged for other cash
  • A contribution is made to a trust or escrow account
  • A loan is made or repaid
  • Cash is converted to a negotiable instrument, such as a check or a bond

Person

The IRS defines a person as any of the following:

  • Individual
  • Company
  • Corporation or partnership
  • Association
  • Trust or estate
  • Exempt organization or employee plan

Cash

The IRS defines cash as US and international coins and currency or a cashier's check, treasurer’s check, bank check or draft, traveler's check, or money order worth $10,000 or less that’s received in one of the following ways:

  • A designated reporting transaction
  • A transaction in which the recipient knows the payer is trying to avoid the reporting of the transaction on Form 8300

This definition doesn’t include a check drawn on an individual's personal account. It also doesn’t include a cashier's check, bank draft, traveler's check, or money order with a face amount of more than $10,000 because the financial institution issuing the check is already required to report it on a form called FinCEN Report 112.

Designated Reporting Transactions

A designated reporting transaction is the retail sale of a consumer durable—such as an automobile or boat, a collectible, travel, or entertainment—if the total sales price of all items sold for the same trip or entertainment event is more than $10,000.

When and How to File

Many tax-exempt organizations have buyers who use cash to pay for goods, services, and property. Common examples for tax-exempt organizations include utility bills and student tuition.

When to File

Form 8300 is due within 15 days of receiving a qualifying cash payment. If the first payment doesn’t hit the $10,000 qualifying threshold, additional cash payments in the related transaction made within one year of the first payment must be totaled.

When combined payments equal more than $10,000, Form 8300 must be filed within the 15-days window. A related transaction is a transaction between a buyer—or an agent of the buyer—and a seller that occur within a 24-hour period.

Transactions are also considered related transactions if they’re more than 24 hours apart or if you know, or have reason to know, that each one is a series of connected transactions.

What to Include

Form 8300 requires the filer to disclose a description of the transaction and method of payment. It also requires buyer information, such as:

  • Name
  • Address
  • Taxpayer identification number
  • Date of birth if funds are received from an individual

As part of the filing, the filer also needs to provide to the payer a requirement statement—written or electronic—that includes the following:

  • Name and address of filer’s business
  • Name and phone number of a contact person
  • Total amount of reportable cash received from that person during the year
  • Acknowledgement that the filer reported this information to the IRS

The form must be sent to the buyer by January 31 of the year after which the qualifying cash payment was received.

Exceptions

There are several exceptions to this reporting requirement. They include the following:

  • Transactions occurring entirely outside the United States, Puerto Rico, or a US possession or territory
  • Cash received in a transaction that isn’t related to the organization’s trade or business, such as a more-than-$10,000 charitable cash contribution. A payment for medical bills, payment of tuition, room and board doesn’t qualify for this exception.
  • A cashier’s check, bank draft, travel’s check, or money order isn’t treated as cash in the following circumstances if certain conditions are met:
    • It’s the proceeds from a bank loan
    • It’s payment on a promissory note or an installment sales contract
    • It’s received as a down payment for a consumer durable or collectible
    • It’s payment for travel or entertainment expenses
  • Financial institutions and casinos for transactions for which they must file FinCEN Report 112

We’re Here to Help

The rules for filing Form 8300—and its exceptions—are complex. Contact your Moss Adams professional with any questions.