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$10,000 cash was gifted to me by my mother, and I went out and bought a car with the $10,000 cash. The dealership sent me an 8300 form saying they sent it to the IRS, so what is going to happen now? Do I need to talk to your IRS? Am I in trouble, but I have proof and receipts for every transaction

gerrit
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SHAWN Snyder
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2 Answers2

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Nothing to worry about (as long as you aren't a criminal or affiliated with someone who is). IRS Form 8300 is a required filing by businesses that receive cash payments in excess of $10,000. It goes to FinCEN (Financial Crimes Enforcement Network), who uses the information to try to prevent money laundering, domestic terrorism, and other financial crimes. To reiterate, this is a required filing, you're not in trouble, and you're not being investigated. I'd be more worried if the amount of cash paid was less than $10,000, because at that point it becomes a discretionary filing the business would make if it feels the transaction was suspicious.

Being contacted by the IRS or FinCEN over this will be very unlikely as long as you don't create a pattern of suspicious activity. One large cash transaction is no big deal.

Stan H
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    And if they do contact you (unlikely without a pattern of doing this), you just show them where the money came from and you're done. Most audits really are trivial. – keshlam Jul 23 '23 at 17:40
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    OP said they paid $10K but the form you linked to says only for payments in excess of $10K. So it was a discretionary filing by the garage then? – Robin Whittleton Jul 24 '23 at 05:16
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    @RobinWhittleton it's payments that are 10k or more – user253751 Jul 24 '23 at 09:08
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    @RobinWhittleton in the minor chance that they paid EXACTLY $10,000 and not a penny more? I would wager the form is for >= $10,000... which means that exactly $10,000 would trigger it. But again... OPs question is probably simplifying the fact that after taxes, title, registration, etc the "$10k" is actually over 10k. – WernerCD Jul 24 '23 at 12:30
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    "discretionary filing ... if it feels the transaction was suspicious": for example, if you paid 1 cent less than the amount required to trigger a mandatory filing. – rghome Jul 24 '23 at 13:43
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    @user253751 No. Direct quote from the form: "Who must file. Each person engaged in a trade or business who, in the course of that trade or business, receives more than $10,000 in cash in one transaction" – user71659 Jul 24 '23 at 22:39
  • @WernerCD I hardly think that's a minor chance, who sells a car for $10,000.22 or $10,014? You use round numbers don't you? Having said that, we're probably all familiar with things being $9.99 rather than $10 for various reasons, but I'm not quite sure about $9,999(.99) rather than $10,000. $9,995 is a very real possibility, though, but nobody's paying $10,000 plus some trivial amount extra! Still I basically agree there's nothing to read into it here, probably someone just felt it was best to file at $10k exactly. If they even thought about the maths they probably decided to play safe – Au101 Jul 25 '23 at 00:49
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    @Au101 In the US, taxes aren't included in the price. You negotiate the car price for a nice round number, then dealer fees, government charges, and taxes go on, and the number is ugly. Because multiple jurisdictions add their sales taxes (state, county, city, transit districts, school bonds, etc.) you get rates like 7.975%. Thus, round numbers for a total cost are a sign of tax evasion or fraud. – user71659 Jul 25 '23 at 04:24
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    @user71659 also the car dealer doesn't want the IRS to come knocking asking "did you sell this car for precisely $10k (or $9999.99) so you wouldn't have to fill in the form?" – user253751 Jul 25 '23 at 05:42
  • @rghome When you buy a car, you don't get to unilaterally choose the price that you pay. You can't decide to stay below the limit unless the car dealership already sets (or negotiates) their prices accordingly. – Dmitry Grigoryev Jul 26 '23 at 10:32
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I went out and bought a car with the $10,000 cash. The dealership sent me an 8300 form saying they sent it to the IRS so what is going to happen now do I need to talk to your IRS?

The car dealer was required to fill out this form. You make a large cash purchase. The issue was that you came in with a pile of bills. If you had paid by personal check, cashiers check, or credit/debit card the form would not have to be submitted.

Am I in trouble but I have proof and receipts for every transaction

No you aren't in trouble, though any time a form is submitted somebody looks at it. It is possible that they could follow up for more information. They are worried that people who make large or numerous cash transactions are hiding something.

$10,000 cash was gifted to me by my mother

If she went to the bank and withdrew $10,000 in cash then the bank also submitted a form. Again the government is concerned that the money was being used for illegal purposes.

If you had submitted the cash into your bank account, your bank would have submitted the form, because the government was concerned you were hiding taxable income, or money from illegal transactions.

Your mom could have transferred the money electronically. She could have written a check to you or to the dealership. Neither transfer type would have triggered the form.

but I have proof and receipts for every transaction.

This confuses me. Did she give you cash or not? If she did, then the only transaction would have been when you bought the car.

Faheem Mitha
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mhoran_psprep
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    Can I ask what you mean by "only transaction would have been when you bought the car"? I'm not sure if you're using "transaction" as a term of art, but by the informal definition I'm familiar with, I see three transactions here: (1) OP's mom withdraws $10k cash from the bank, (2) OP's mom gives $10k cash to OP, (3) OP buys a car with $10k cash. – David Z Jul 24 '23 at 02:01
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    @DavidZ (1) OP's mom would probably have that receipt, and most likely would not have given it to OP. (2) most likely would not have had a receipt. (3) would have had the receipt that mhoran_psprep is expecting. So I agree that it's a bit confusing what OP means by having proof and receipts for every transaction. The only reason OP would have receipts for (1) and (2) is if they were expecting the 8300 form, in which case they wouldn't have posted here. – Teepeemm Jul 24 '23 at 02:20
  • @Teepeemm Sure, but what I was commenting about was not how many receipts OP has, I was commenting about how many transactions took place. – David Z Jul 24 '23 at 02:34
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    @DavidZ His mother may habitually have $10000 lying around or under the mattress. So, no transaction there. She gives it to her son. No paperwork there. The only transaction is when he bought the car. However "receipts for every transaction" is therefore confusing. – Nick Gammon Jul 24 '23 at 08:15
  • @NickGammon OK, I'll grant that the OP's mother might have $10k lying around, but still, my point stands that using the definition of "transaction" which I'm familiar with, there are two transactions explicitly described in the question. Clearly you are using a different definition of "transaction", likely the same one that mhoran_psprep is using. That's what I was hoping to get clarified. (And I'm also implicitly suggesting that the OP may be using the same definition of "transaction" that I am, not the one that you are, which if true would be quite relevant to understanding the question.) – David Z Jul 24 '23 at 08:38
  • @DavidZ I think we can all agree that (2) and (3) were transactions, and probably (1) if the mom didn't already have the money laying around. I think we're all confused about what OP means by receipts for transaction (2), and why OP would have receipts for transaction (1) if it occurred. – Teepeemm Jul 24 '23 at 11:31
  • Also note that when making cash withdrawals from a bank, the bank won't always give a receipt. They say that for a withdrawal, the cash itself is the receipt. If you press hard enough, some banks will give you a transaction record that looks a lot like a receipt, which can be used to show where the money came from in a FinCen audit. However, in my experience that's not the default and not everyone always both knows & remembers to ask. – WBT Jul 24 '23 at 15:36
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    The mother could have handed the money together with a card saying she gifted it to her son. That would be some kind of proof for this transaction, wouldn't it? – Paŭlo Ebermann Jul 24 '23 at 16:43
  • Your statement that an IRS Form 8300 wouldn't have been filed if the OP used a cashier's check is inaccurate. The instructions for IRS Form 8300 are explicit that the form needs to be filed for "A cashier’s check, money order, bank draft, or traveler’s check..." Specifically, see the definitions of "Cash", "Designated reporting transaction", "Retail sale" and "Consumer durable" as used for that form. On the other hand, you're correct that using a personal check or credit/debit card would not trigger filing an IRS Form 8300. – Makyen Jul 24 '23 at 17:12
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    "though any time a form is submitted somebody looks at it"—nobody is looking at most of these. They go into a database system, and someone may look at them in the course of an audit or investigation, particularly if there are other red flags or a pattern of suspicious transactions, but a government employee is not generally reviewing every cash payment report personally. – Zach Lipton Jul 25 '23 at 04:39
  • @PaŭloEbermann proof for this transaction is more like evidence of transaction, not a proof. A receipt, card from mother, video of her giving the money, etc. are all evidence. Some more believable/recognized than the other. – chux - Reinstate Monica Jul 26 '23 at 21:42