Cash Reporting Notices for ’01 Transactions Due Jan. 31

Cash Reporting Notices for ’01 Transactions Due Jan. 31

Under IRS regulations, dealers must notify each person identified in an IRS cash-reporting form (Form 8300) for transactions of $10,000 or more during 2001. Such notices must be in writing, furnished to the purchaser no later than Jan. 31, 2002.

The notification statement must include the name and address of the dealership, the total amount of cash reported to the IRS during 2001 for that person, and a statement that the information was reported to the IRS. The statement should go to the person’s last known address. Dealers are encouraged to review 2001 transactions carefully to be certain that all affected customers are notified in writing and to record a copy of the notice furnished to the customer.

To soften the surprise that some customers may get from receiving this notice, it is recommended that dealerships include a short letter along the following lines:

Dear (customer name):

We are required by the Internal Revenue to report transactions involving more than $10,000 in cash and cash equivalent under the provisions of 26 U.S.C 60501. We filed a Form 8300 with the IRS on (month, day, year) indicating that you provided us ($ amount) in connection with the purchase of your (year, make, model). We wanted you to know that we have complied with this federal requirement. Again, thank you for your patronage.

Sincerely,

(dealership name)

The exact wording of the customer notification should be reviewed by the dealershipês legal advisor.