10K Transaction Reporting
Are people actually required to file IRS Form 8300 (transactions over 10K)? The instructions and throughout the form it says for transactions related to a “trade or business” but I don’t see a Paperwork Reduction Act or Privacy Act notice anywhere, citing a law that “requires” people to file.
Under common tax law (being the “law” the average tax preparer and tax attorney will tell you), how do you report transactions under $10K?
Also, are there any pragmatic approaches to IRS Form 8300? Can you file, saying “I don’t have a ‘Trade or Business’”? Do you tell the banker? Are there special words you use when they audit you?
This requirement exists in two places.
In title 26 under the internal revenue code in section 6050I. There is a penalty associated with this in section 6721. In title 26, you are correct, that trade or business is defined in section 7701 as
The term “trade or business” includes the performance of the functions of a public office.
The requirement is also in title 31 under the banking secrecy act in section 5331. This has almost identical language, but the definition of trade or business is not applied to title 31, it only applies to title 26. However, just because there is a law saying you have to do something, does not make it a crime not to do it. There has to be a penalty associated with it. In title 31, that penalty is found in section 5321 (civil) and 5322 (criminal). These penalties are explicitly laid out for “domestic financial institution or nonfinancial trade or business”
Financial Institutions are defined here: 31 USC § 5312(c)(1):
(1) Certain institutions included in definition .— The term “financial institution” (as defined in subsection (a)) includes the following: (A) Any futures commission merchant, commodity trading advisor, or commodity pool operator registered, or required to register, under the Commodity Exchange Act.
Nonfinancial trade or business is defined here:
(4) Nonfinancial trade or business .— The term “nonfinancial trade or business” means any trade or business other than a financial institution that is subject to the reporting requirements of section 5313 and regulations prescribed under such section.
Nothing in section 5313 appears to imply that any normal person who is not some sort of financial institution is required to file.
What does this all mean?
Banks are required to report these transactions as a matter of their regulations. It’s not a requirement on you, it’s a requirement on the bank. The bank is obligated to file the report because they are heavily regulated. Remember, when you have an account at the bank, that is not “your account.” The same way as if you opened an account with the government, it should be obvious that they can see every transaction you are doing because they are a party to that transaction. You don’t have much privacy with banks because banks operate as an extension of the government. The banks have knowledge of everything that you do with your account and they are free to report it to the government, and in some cases required. However, there is nothing particularly clear anywhere in here that says that anyone else has to make that same report. Money is property. It is a right to own and trade property. That right is mostly restricted by the use of the interstate commerce clause and monopoly on banking.
