Legal reminder from Colombo & Colombo, P.C.

As part of the IRS cash reporting rule, on or before the January 31st following the calendar year for which the Form 8300 was filed, dealerships must provide a written statement to each individual who has been identified on a Form 8300.

Therefore, for transactions that were reported to the IRS for 2021, it is necessary to inform any customer of the Form 8300 filing on or before January 31, 2022. This notification must include the name, telephone number and address of the dealership, the amount of cash that was received by the dealership and that the information has been reported to the IRS.  Please note: The law requires written notification. Merely informing the customer at the time of the sale that you will be filing the Form 8300 is not sufficient. If you sent the customer the notice letter at the time of the transaction, you do not need to send a notice at this time.

Click Here for a sample letter that the dealership can use to notify the customer of the Form 8300 reporting. Failure to send written notice to customers as specified above can result in civil penalties ranging from $250 to $500 per customer. The IRS recommends that businesses keep a copy of every Form 8300 it files and the required statement sent to each customer for at least five years from the date filed.