Cash Reporting Notices for ’04 Transactions Due Jan. 31
WANADA would like to remind dealers that the IRS has been strictly enforcing the filing of Form 8300 cash reports on the new IRS Form 8300/Fin/CEN Form 8300, and is conducting audits on dealers for compliance with Form 8300 requirements. A failure to report cash transactions over $10,000 could result in a minimum $25,000 fine!
Under IRS regulations, dealers must notify each person identified for transactions of $10,000 or more during 2004. The FinCEN Form 8300 general instructions and the IRS definition of cash are available on the IRS website at http://www.irs.gov/publications/p1544/ar02.html.
Such notices must be in writing, furnished to the purchaser no later than Jan. 31, 2005.
The notification statement must include the name and address of the dealership, the total amount of cash reported to the IRS during 2004 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 2004 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 Service to report transactions involving more than $10,000 in cash and cash equivalent under the provisions of 26 U.S.C 60501. (Name of dealership) has filed a Form 8300 with the IRS on (month, day, year) indicating that you provided us ($ 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 yours,
(dealership name)
The exact wording of the customer notification should be reviewed by the dealerês legal advisor.
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