“A customer wants to pay $12,000 in cash.” You can take it. FinCEN, which uses these reports along with the IRS, says plainly that “there is no general prohibition against handling large amounts of currency.” But more than $10,000 in cash for a job puts two reports in motion: your IRS Form 8300, due within 15 days, and your bank’s report when you deposit it. Neither is a problem if you file yours and keep the money on the books. Trouble starts when somebody tries to stay under the line.
The rule in one paragraph
Anyone in a trade or business who, in the course of that business, receives more than $10,000 in cash in one transaction or in two or more related transactions must file Form 8300 (26 U.S.C. §6050I(a)). The form reports the payer’s name, address and taxpayer identification number, the amount, and the date and nature of the transaction. It is due by the 15th day after you receive the cash. A deposit counts too: the IRS reference guide’s example is a lawyer paid more than $10,000 in cash in advance, before any work is done, who must file within 15 days of receiving it.
What counts as cash
For a business that sells a service, the IRS reference guide shows how the second line works. It uses a hospital emergency room as an example that is not a designated reporting transaction: money orders and similar instruments there count only if the hospital knows the payer is trying to keep it from reporting. If your business also sells big-ticket goods to consumers, ask your tax professional how the “consumer durable” definition applies to you.
Payments on one job add up
Transactions between the same payer and you within 24 hours are related. So are payments further apart if you know, or have reason to know, they are part of a series of connected transactions. For installment payments on one transaction, the IRS reference guide sets out the count:
Say a remodeler agrees a $28,000 kitchen with a homeowner who pays every draw in cash:
| Payment | Cash | Count since last filing | What happens |
|---|---|---|---|
| Deposit, April 2 | $8,000 | $8,000 | Nothing yet |
| Rough-in draw, May 14 | $10,000 | $18,000 | Over $10,000: file Form 8300 by May 29 |
| Completion draw, June 30 | $10,000 | $10,000 | New count is not more than $10,000: no second form yet |
If the contract also held back $500 until the punch list was done, and the homeowner paid it in cash within 12 months of the June 30 draw, the new count would pass $10,000 and a second form would be due within 15 days of that payment. The IRS’s own example runs the same way: $11,000 on January 10 means a form by January 25, and $4,000, $5,000 and $6,000 paid on February 15, March 20 and May 12 total $15,000, so a second form is due by May 27.
Filing it
Structuring: the part that turns paperwork into a crime
Section 6050I(f) makes it unlawful to structure, or help structure, a transaction to evade the Form 8300 requirement, or to cause a business not to file. The instructions say these violations can be prosecuted, with prison of up to 5 years or fines of up to $250,000 for individuals and $500,000 for corporations. On the civil side, the instructions set a minimum penalty of $25,000 for intentional disregard of the reporting rules, and the reference guide says that penalty is the greater of $25,000 or the cash received, up to $100,000, for each failure; the tax code indexes those dollar amounts for inflation each year (26 U.S.C. §6721(e) and (f)).
In practice it looks like this. A customer says, “Let’s do $9,000 now and $9,000 next week so nobody has to fill anything out.” Those payments are related, the total is over $10,000, and the form is due anyway. The instructions also let you file Form 8300 voluntarily for a suspicious transaction, even one of $10,000 or less, by checking the suspicious-transaction box, and they say not to send the customer a statement about a voluntary filing of that kind.
The same rule applies to you at the bank. Banks and other financial institutions must report cash transactions over $10,000, including several that add up to more than $10,000 in one day, and FinCEN says breaking deposits into smaller amounts to evade that report is a federal crime, with up to five years in prison and a fine of up to $250,000, doubled if the structuring involves more than $100,000 in twelve months. One of its own examples is a man who deposits $7,500 in the morning and the other $7,500 later the same day to avoid the report. Deposit the $12,000 in one go.
Keep cash jobs on the books
Form 8300 is a report of what you received, not a tax. The tax comes from your return, and IRS Publication 334 says you must report all income from your business, “including income not reported to you on a Form 1099,” and that business income usually comes as “cash, checks, and credit card charges.” A $12,000 cash job is $12,000 of gross receipts, the same as a check.
General information, not legal or tax advice. Rules change and vary by state; check with the agency named above or a professional for your situation.