Understanding Form 8300


Form 8300 may not be the most well known to a lot of tax preparers, but anyone serving the cannabis industry space has certainly been made aware of its necessity. The form is required to be filed by anyone who receives cash payments of $10,000 or more, during a calendar year, in a trade or business.

In other words, if a client paying you $1,000 a month for services stops in with an envelope of cash every month, you are supposed to be filing this form to report their cash payments as soon as the threshold is met.

For those of us serving cannabis clients, even if we don’t receive cash payments, many of the businesses do and often do not know they are required to complete form 8300 for each individual or entity that exceeds the cash payment threshold. Think 1099s, but in reverse.

The form is part of a widespread and continuously developing effort to combat money laundering. FinCEN has continued to expand its reach and reporting requirements far beyond the initial foreign bank account reports that many tax preparers are accustomed to. We have gotten used to asking this innocuous question of our tax organizers and occasionally having to file a FinCEN report but new regulations are coming in Jan. 1, 2024.

If you missed last week’s article on smalling reporting you can review it HERE. The article details changes coming from the Corporate Transparency Act, which also includes FinCEN reporting by most small businesses to take effect at the beginning of 2024.

The reason tax preparers need to be aware of these requirements is because we’re the most likely candidate to aid our clients in completing reports and staying compliant. Often, we already house in our workpapers all the information needed to complete the reports.

These forms are not part of income tax returns so there is certainly nothing that will beholden tax preparers to preparing these FinCEN related compliance forms, but in the name of client service and value add propositions, firms should think about how to incorporate these into your offerings and also how to make clients aware of their filings.

For efficiency’s sake, I would recommend preparers think about their process now in three steps:

  1. How to communicate the new requirements to clients
  2. Who in the firm will be responsible for collecting docs and preparing forms
  3. What will the added service charges be for preparing these forms

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