Form 8300 Process Changes — Electronic Filing and What to Know
On August 30, 2023, the IRS formally announced that all Form 8300’s must be e-filed, with limited exceptions, as of January 1, 2024. The IRS has indicated that this is intended to make filing and communication regarding 8300 easier and quicker, with free email receipt and batch filing available.
In order to file electronically, all dealers will need to register with the Financial Crimes Enforcement Network’s BSA E-Filing system. Once approved, you’ll sign onto the BSA E-Filing system and complete the Form 8300 just like the blank PDF. We suggest registering earlier than the January 1st deadline in case you encounter any difficulties.
Here are some tips, best practices, and differences from paper filing:
- You will no longer be able to skip over fields like you can when filling out a paper form. If you haven’t been able to get a customer’s social security number, you’ll need to enter it as all zeros. The IRS will recommend that you check the box “suspicious transaction” if the customer is not willing to provide you with this information.
- Be sure to describe your collection efforts in the Comments section at the bottom of page 2. We would recommend providing dates and times of phone calls and emails, along with the response from the customer.
- Don’t delay filing due to lack of information. This applies to any field you can’t complete within that 15-calendar day deadline, as you can send an amended report whenever you do collect the requested details. The filing penalties have gone up from $50 per occurrence to $290. There is an additional $290 dollar fine assessed if the customer is not notified of the non-compliance. This can add up.
- You must print your completed form before submitting it online and save the confirmation receipt once finalized. You won’t be able to print it once the form is submitted and keeping a copy of the filed Form 8300 is required.
- We recommend a simple worksheet to be completed on every retail delivery. This will detail the total amount due on the sale of the vehicle, then deduct each payment received. Be sure to include the funding balance from the lender, a trade credit, rebates, etc. Make two columns for this worksheet entitled ‘reportable’ and ‘non-reportable’ transactions. Your transactions should be clearly identified.
- Waivers are available for Religious and other limited exemptions but do not preclude the taxpayer from filing 8300’s just the electronic requirement.
IRS form 8300 audits are on the rise. During the pandemic, audits were down due to the need for the auditor to visit the dealership to review the documents. Auditors are now back in the field and are more well-equipped with technology to do remote audits.
Submitting online is the easy part. Having a good system and checks and balances in place that catch cash payments is the difficult task. If your dealership is looking for best practices or you want to do an internal self audit or training, reach out to our consultants at Withum for help and a complete list of best practices.
Authors:Jen Moylan | [email protected] and Phil Craft, CPA | [email protected]