As the last months of 2024 unfold, dealerships should take stock of their financial health and year-end planning. This includes e-filing thresholds that went into effect the first of this year. Take a moment as we revisit IRS e-filing threshold details and highlight action items for dealers to complete before 2025.
Background
In a recent FORsight™, IRS Reduces E-Filing Threshold for Filing Year 2024, Forvis Mazars shared that the IRS revised its regulations regarding the electronic-filing rules for most returns, including partnership returns, corporate income tax returns, unrelated business income tax returns, withholding tax returns, certain information returns (such as 1099s), registration statements, disclosure statements, notifications, actuarial reports, and certain excise tax returns. These revisions have reduced the 250-return threshold to 10 returns. In addition, under current regulations, the 250-return threshold applies separately to each type of information return covered, while the new regulations require filers to aggregate across return types to determine whether the 10-return threshold is met. According to this ruling, it’s expected that most dealership companies had filed their Form 8300s electronically throughout 2024.
E-Filing Form 8300
Now is the time to ensure you have e-filed specific returns along with your Form 8300s (a full breakdown of what constitutes as cash, when to report payments, and more details can be found in the IRS Form 8300 Reference Guide).
For a refresh, the Form 8300 is issued by the IRS and the Financial Crimes Enforcement Network (FinCEN) to report cash payments over $10,000 received in a trade or business transaction1. Since the dealership industry utilizes large amounts of cash in its business dealings, the majority of dealerships will need to e-file their Form 8300s.
If you have not done so already, here are key steps for your dealership to take now:
- Sign up to e-file your Form 8300 through the Bank Secrecy Act (BSA) Electronic Filing (E-Filing) System.
- In addition, businesses must e-file Form 8300 if they are required to file certain other information returns electronically, e.g., Forms 1099 (series), Forms W-2, etc.2
- If needed, request a waiver from filing information returns electronically due to undue hardship.3 However, this may be difficult to prove.
- Train your dealership staff to identify transactions that fall under Form 8300 e-filing.
- Check if you were required to file electronically and instead filed the Form 8300 via paper. That will deem your form late and result in a late return penalty.
- Resubmit any incorrectly filed Form 8300s that are within a 45-day window after cash receipt in order to reduce the incurred penalty.
- If you filed via paper when e-filing was required, then the penalty incurred is $310 per return. This can be reduced to $60 per return if it is corrected before the 30th day after the required filing date, e.g., 45 days after cash receipt.
- Continue to file all dealership returns through e-filing moving forward.
- Run a cash receipts report from your dealership management system every 15 days, if not more regularly, in order to confirm your Form 8300s are filed in a timely manner. The same late filing penalties of $60 or $310 can be incurred for forms filed outside of the 15-day window, even if correctly e-filed.
- Read each Form 8300 prior to submission to help ensure that the required information is included in the e-filing. Pay particular attention to certain requirements, such as the inclusion of a tax payer ID and the amount of cash received in $100 bills or larger, as these can be commonly missed.
- Provide the required written statement to dealership customers on or before January 31 of the following year.
- Consider sending these letters through certified mail with a return receipt, so there is an archived confirmation that the letters were timely sent in the event of an audit.
Being proactive and revisiting IRS e-filing threshold requirements can help ease your dealership’s end-of-year planning. It is critical to make sure your organization is compliant or working through remediation measures to potentially decrease late return penalties. By heeding these reminders, your dealership can help get its ducks (or cars) in a row for a smooth transition into the new year.
For more information on Form 8300 e-filing or other dealership industry questions, please reach out to a professional at Forvis Mazars.
- 1“Reference Guide on the IRS/FinCEN Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business,” irs.gov, 2024.
- 2“Reference Guide on the IRS/FinCEN Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business,” irs.gov, 2024.
- 3“Instructions for Form 8300 (12/2023),” irs.gov, December 2023.