Trade Only Today

Author:
Publish date:

When it comes to reporting cash income these days, I can safely assume all dealers would be thrilled to have any to report in the first place!

Still, the MRAA recently determined it was important to warn its member dealers via its newsletter, MRAA Bearings, that the IRS claims it is strictly enforcing the cash reporting rules and claims that dealer compliance is “inconsistent and inadequate.”

In essence, the requirement to file an IRS form 8300 -- report of cash payments over $10,000 received in a trade of business – is triggered when a dealer receives more than $10,000 as a cash payment in a single transaction. No, a couple of payments under $10,000 each from the same customer won’t eliminate this requirement because reporting also applies to one or more related transactions that, combined, exceed $10,000. Moreover, the Form 8300 must be filed within 15 days of the transaction.

There are some exceptions. For example, personal checks drawn against an individual's account as well as checks for the proceeds from bank loans with a face amount of more than $10,000 are not treated as cash.

Here are some additional tips MRAA has provided its members:

• Make certain the Form 8300 is complete. The Taxpayer Identification Number (usually the customer's social security number), total cash received and date received are critical.
• Regularly review with your employees the cash reporting rules so that they are familiar with the definition of "cash" and when cash reporting is required.
• Finally, if as a dealer, you submit a Form 8300, you are also required to send a notice to that customer no later than January 31st of the next calendar year stating that you filed the Form 8300 with the IRS.

Unfortunately, this IRS requirement is nothing to mess around with. The penalties for failure to follow the cash reporting rules are harsh. For example, if the IRS determines you have intentionally failed to file the form, the minimum penalty is $25,000 per occurrence. Sadly, it has been reported the IRS has assessed individual fines in excess of $100,000 to several dealers in the Northeast.

You can get more info from your accountant, your attorney, your area IRS office or at www.irs.gov. But, it’s essential you get all the details, one way or another!

Related

E-nnovation Lab to expand at 2018 Metstrade show

The growing demand for hybrid and electric engines is becoming more apparent within the leisure marine market, prompting Metstrade to introduce the E-nnovation Lab platform for electric propulsion technology.

Aluminum, tow boats lead moderate growth in May

Boat registrations were up 2.1 percent in May in the main powerboat categories, and rose 3.2 percent in all categories, according to preliminary data from Statistical Surveys Inc., a Michigan company that tracks new boat registrations.

Retaliatory tariffs on boats to EU start today

The 25 percent tariff the EU announced Wednesday on U.S.-built boats kicks in today, and a 10 percent tariff on boats sold to Canada will start July 1, prompting boatbuilders to worry they will lose sales to those countries.