December 07, 1993
IRS Seeks Greater Compliance
with Form 8300 Requirements
WASHINGTON - Concerned about the lack of compliance with Form
8300, Report of Cash Transactions Received in a Trade of Business,
reporting requirements by attorneys, the Internal Revenue Service
announced today that it will begin assessing the intentional
disregard penalty against certain attorneys. This is part of its
on-going effort to enhance Form 8300 compliance by attorneys who
either fail to file the form or file an incomplete one.
The law requires any person engaged in a trade or business who
receives more than $10,000 in cash in any one transaction, or two or
more related transactions, to report the transaction to the IRS
within 15 days of receipt of the cash on Form 8300. The law also
requires that a properly filed Form 8300 contains the correct cash
payer's name, address and tax identification number, as well as the
amount of cash received and the date and nature of the transaction.
While filings of Form 8300 have increased ten-fold since
1987--from 13,900 cash transaction reports in that year, to 142,400
in 1992 and over 105,000 so far in 1993--a substantial number of
attorneys who accept cash fees in excess of $10,000 have filed, and
continue to file, incomplete Forms 8300.
Despite repeated guidance to the contrary since 1987, including
a specific regulatory requirement applicable to attorneys, many
attorneys rely on the attorney-client privilege for not disclosing
client-identifying information on the form. Two recent court
decisions, however, support the IRS' position that
client-identifying information required on Form 8300 is not
privileged: United States v. Goldberger & Dubin, P.C. and United
States v. Leventhal.
The information from the Forms 8300 is added to a data base at
the IRS Detroit Computing Center for use in civil and criminal law
enforcement and tax administration purposes. IRS personnel around
the country can use this information in their examination,
collection, and criminal investigation work. The data helps detect
nonfiling, unreported income, and money laundering often associated
with narcotic trafficking and other illegal activities by some of
the customers and clients of the businesses required to file.
According to Donald K. Vogel, Assistant Commissioner, Criminal
Investigation, "Forms 8300 are a valuable tool for the IRS because
they produce a paper trail which often links individuals with their
The IRS may assess civil penalties against a person who fails
to file Form 8300 or who fails to file a complete Form 8300. When
the failure is due to intentional disregard of the cash reporting
requirements, the amount of the penalty IRS may impose is the
greater of $25,000 or the amount of cash received in each
transaction, not to exceed $100,000.
In FY 1992, in 392 cases IRS assessed $2.6 million in penalties
for intentional disregard. In FY 1993, there were 1,034 cases and
$1.7 million in penalties. The high 1992 dollar amount is the
result of concentrated compliance checks in various industries such
as care dealers, boat dealers, furriers and jewelers.
Before now imposing the intentional disregard penalty on
attorneys, the IRS had pursued many avenues to encourage full
compliance with cash reporting requirements by attorneys. These
efforts included serving summonses and sending notices that Form
8300 information is not privileged and the intentional disregard
penalty may be imposed.
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