Your auto dealership should be using an 8300 form to report cash payments over $10,000 to the IRS.

00-An 8300 Form Overview for Auto Dealerships- Tips for Compliance-01

When you’re running an auto dealership, you have a lot on your mind every single day — managing your team, keeping an impressive inventory, and of course, making sales. It may feel like you simply have no more room on your daily “to-do” list, but there is one thing you need to always make time for: compliance.

Auto dealers have many different rules and regulations they must follow, and one very important IRS law involves the 8300 form. If your dealership hasn’t been keeping up with filing 8300 forms, here’s why they’re so important — and why you need to get on track today.

01-An 8300 Form Overview for Auto Dealerships- Tips for Compliance-01Why do auto dealers have to worry about the 8300 form?

In past years, the IRS has noticed multiple scams and fraud involving the automotive industry. There have been problems involving drug traffickers, the use of false loan documents to obtain car loans, tax evasion, employment tax fraud, and money laundering conspiracies. Because of this, all automotive dealers are required to file a form 8300 and report any cash payments that total over $10,000 in one transaction, or two or more related transactions.

How to use and file the 8300 form

The 8300 form can be easily downloaded and printed from the IRS website here: IRS Form 8300

Simply fill out all the fields on the form any time you receive a cash payment over $10,000. You’ll need information regarding the identity of your customer who paid with the cash, if the transaction was conducted on behalf of someone else, the transaction itself and method of payment, and the business that received the cash (your dealership).

03-An 8300 Form Overview for Auto Dealerships- Tips for Compliance-01The 8300 form must be submitted to the IRS by the 15th day after the date the cash was received. If that date ends up being on a weekend or legal holiday, the form should be filed by the next business day. You may be eligible to file the form electronically via the BSA E-Filing System, but if you are not, it is also possible to mail the form to this address:

Internal Revenue Service
Detroit Computing Center
P.O. Box 32621
Detroit, MI 48232

Be sure to keep a copy of each and every form 8300 you file for five years from the dating of filing. Read all instructions on the form to ensure you are in full compliance.

What happens when auto dealers don’t use the 8300 form

Using the 8300 form is not optional for auto dealerships — it is the law. If the IRS determines that your failure to file an 8300 form was intentional or a willful disregard of the cash reporting requirements, you could receive a minimum penalty of $25,000.

02-An 8300 Form Overview for Auto Dealerships- Tips for Compliance-01You may also be penalized if the IRS determines you:

  • Caused, or attempted to cause, a trade or business to fail to file a required report
  • Caused, or attempted to cause, a trade or business to file a required report containing a material omission or misstatement of fact
  • Structured, or attempted to structure, transactions to avoid the reporting requirements.

Any of the violations listed above could result in a criminal conviction and up to five years in prison, or fines of up to $250,000 for individuals and $500,000 for corporations — or both.

The 8300 form is extremely important, so don’t let a simple oversight get you in trouble with the federal government.

A little compliance goes a long way

Yes, managing an auto dealership can be stressful — and ensuring 100 percent compliance may seem impossible. Take some time to truly understand the industry requirements, hire smart people to support your efforts, and pretty soon, regularly filing the 8300 form and being compliant will be second nature.

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