Northern Virginia. This transaction was structured in such a way as to not require reporting. It involved ten cashier's checks, one personal check and two cash payments. The cashier's checks totalled $70,500, the personal check was for $1,000, and the two cash payments totalled $6,617. The payments for this Mercedes were received over a period of a month from June 7, 1988 to July 7, 1988. The personal check was the initial deposit. The ten cashier's checks and the two cash payments followed. Three of the cashier's checks were drawn on the HEW Federal Credit Union on June 7 and June 8 for $4,000, $5,500, and $9,500. Two of the cashier's checks were drawn on Madison National Bank on July 1 for $5,000 and $8,000. One of these was purchased by Zanville and the other by Reynolds. Two more of the cashier's checks were drawn on National Capitol Bank on July 1 for $5,000 each. The other three cashier's checks were drawn on First American Bank, First National Bank of Maryland, and United Bank and Trust Company of Maryland on June 9 and 10 each for $9,500. Anyone looking at this transaction could see that Zanville and Reynolds wanted to avoid reporting. There is no other reason why they would have used so many cashier's checks. Some were even purchased from the same bank on the same day but by two different people. Others were purchased on the same day but at different banks. The only person, other then Zanville and Reynolds themselves, who could see this clear intent to avoid reporting was the Mercedes dealer. However, under current law no Form 8300 was required and, in fact, according to the dealer, none was filed. In another transaction, a Mercedes Benz 300 CE was purchased in the name of another associate of Edmond's, Bernice Daniels, from the same Northern Virginia Mercedes Benz dealer. Alta Rae Zanville made an initial deposit of $9,000 in cash on the Mercedes on July 14, 1988. Bernice Daniels paid the balance on July 22 with two cashier's checks for $9,000 each, two personal checks for $9,000 each, and $6,072 cash. The cashier's checks were purchased by Columbus Daniels and C'Artis Brawner, one from Sovran Bank and the other from Citizens Bank. The personal checks were drawn on Maryland National Bank and Chevy Chase Federal Savings Bank. The total purchase price was $51,072. Again, the transaction was structured to avoid reporting requirements although it would appear that a Form 8300 should have been filed because more than $10,000 in cash was received by the dealer in this one transaction. According to court records, this Mercedes was purchased by Edmond, in Bernice Daniels' name, for Columbus "Little Nut" Daniels as payment for the murder of rival drug dealer Brandon Terrell. Terrell had reneged on a drug debt to Edmond and had encroached on Edmond's territory. Little Nut shot Terrell six times in front of the Chapter III nightclub in Southeast D.C. on June 23, 1988. Bernice Daniels sold the Mercedes to a Mercedes dealer in Prince George's County, Maryland five months later after it had been driven only 118 miles. Conclusion: Based on our review of these transactions, it is clear that while a few may have been ignorant of the law, the merchants who dealt with Rayful Edmond and his gang had little or no regard for the reporting requirements established by Internal Revenue Code 60501. Edmond had no problem buying what he wanted in cash with no reports of the transactions going to the IRS. Joint Committee on Taxation EXPLANATION OF CODE SECTION 60501 (RETURNS RELATING TO CASH RECEIVED IN TRADE OR BUSINESS) Scheduled for a Bearing Before the Subcommittee A person engaged in a trade or business who receives, in the course of the trade or business, more than $10,000 in cash or foreign currency in one or more related transactions must report it to the Internal Revenue Service (IRS) and provide a statement to the payor. This reporting requirement was added in 1984 because Congress believed that reporting on the spending of large amounts of cash would enable the IRS to identify taxpayers with large cash incomes that might otherwise be underreported. Reporting is required whether or not consideration is returned for the cash and whether or not the cash is received for the recipient's own account or for the account of another (with narrow exceptions provided by IRS regulations). For example, if a title company receives more than $10,000 in cash from the purchaser of real estate as his downpayment, the title company must generally report the receipt of that cash, even though it receives the cash on behalf of the seller. For purposes of the reporting requirement, only currency is treated as cash--not checks, traveller's checks, drafts, money orders, or other cash equivalents. A transaction subject to reporting is any receipt of cash including receipt in connection with the purchase of goods or services, the purchase or exchange of property, the opening of a deposit or credit account, or any similar transaction. The recipient of the cash is required to report the name, address and taxpayer identification number of the payor, the amount of cash received, the date and nature of the transaction, and such other information as the Secretary may require. In addition to furnishing reports on each cash transaction to the IRS, the recipient of the cash must furnish each payor an annual statement aggregating the amounts of cash received from him. This statement must be furnished on or before January 31 of the year following the year of the reportable event. Any taxpayer subject to this provision who receives more than $10,000 in cash in one or more related transactions is required to report those transactions. For example, assume that an individual purchases a $8,000 item and a $1,500 item at an auction. The auction house adds a 10-percent buyer's premium and a 5-percent local sales tax. The taxpayer pays his $10,972.50 bill in cash. The auction house must report on that transaction. The auction house could not avoid the reporting requirement by presenting two separate bills of $9,240 and $1,732.50. Reporting is not required on payments (1) that are received in a transaction reported under the Bank Secrecy Act if the Secretary of the Treasury determines that the report under this provision would duplicate the report under the Bank Secrecy Act, or (2) that are received by certain specified financial institutions within the meaning of the Bank Secrecy Act. The The penalty for failure to file required reports with the IRS and to furnish statements to taxpayers is similar to that imposed on failures to make other information reports and statements. Thus, the penalty is $50 per failure, subject to a maximum of $250,000 for any calendar year. penalty is not applicable if the failure is due to reasonable cause and not to willful neglect. If, however, the failure to file required reports with the IRS is due to intentional disregard of the filing requirements, the penalty is 10 percent of the aggregate amount of the items required to be reported and the $250,000 limitation does not apply. In addition, under Code section 7203, any willful violation related to the filing of returns relating to cash receipts of more than $10,000 received in the course of conducting a trade or business is, upon conviction, punishable by a fine or imprisonment not to exceed 5 years or both. Similar civil and criminal penalties apply to persons who, for the purpose of evading the return requirement, cause or attempt to cause a trade or business to fail to file, or to file falsely, a required return. b Issued by c Number Part II Person (See Definitions) on Whose Behalf This Transaction Was Conducted 15 16 18 If this transaction was conducted on behalf of more than one person, see instructions and check here 20 Middle initial 21 Social security number 31 Specific description of property or service purchased. Give serial or registration number of car, boat, airplane, etc., address of real estate, etc. intangible property purchased h 000 45 39 Employer identification number Social security number 42 State 43 ZIP code 44 Nature of your business Under penalties of pulijury, I declare that to the best of my knowledge the information I have furnished above is true, correct, and complete. Paperwork Reduction Act Notice.—The requested information is useful in criminal, tax, and regulatory investigations, for instance by directing the Federal Government's attention to unusual or questionable transactions. Trades or businesses are required to provide the information under 26 U.S.C. 60501. The time needed to complete this form will vary depending on individual circumstances. The estimated average time is 18 minutes. If you have comments concerning the accuracy of this time estimate or suggestions for making this form more simple, you can write to the Internal Revenue Service, Washington, DC 20224, Attention: IRS Reports Clearance Officer T:FP; or the Office of Management and Budget, Paperwork Reduction Project (1545-0892), Washington, DC 20503. Form 8300 (Rev. 1.90) Form 9300 . . C General Instructions Who Must Fila. -Each person engaged in a trade or business who in the course of such trade or business, receives more than $10.000 in cash in one transaction or two or more related transactions must file Form 8300 Any transactions conducted between a payer (or its agent) and the recipient in a 24-hour period are related transactions and must be aggregated and reported as a single transaction if the total amount exceeds $10 000 Also, a transaction is related even though it occurs during a period of more than 24 hours if the recipient knows, or has reason to know that each transaction is one of a series of connected transactions in addition, this form may voluntarily be filed for any suspicious transaction, even if it does not exceed $10.000. Multiple Payments. -How and when you must report receipt of cash deposits, cash installment payments, or other similar payments or prepayments depend upon the dollar amounts of the initial and subsequent payments. If the initial payment exceeds $10.000, it must be reported within 15 days. If the initial payment does not exceed $10.000, the recipient must add together the initial payment and subsequent payments made within one year until the total exceeds $10.000, at which time the report must be filed within 15 days if subsequent payments. singly or in the aggregate, received within any one-year period exceed $10,000, they must be reported separately within 15 days of the date they exceed $10.000 if they have not been previously reported. (If two or more separately reportable payments are received less than 15 days apart, they may be filed on a single report. In this case, the report is due within 15 days of receipt of the first payment) If subsequent payments. singly or in the aggregate, received within one year do not exceed $10.000, they need not be reported Exceptions-Section 1.60501-1 of the Treasury Regulations provides for exceptions to the reporting requirements, including (1) Financial institutions required to file Form 4789, Currency Transaction Report, are exempted from filing Form 8300 for the same transaction (2) Casinos required to file (or excepted from filing) Form 8362 are exempted from filing Form 8300 for the same transaction. However, nongaming businesses (such as shops. restaurants, and hotels) at the casinos must report on Form 8300 receipt of cash in excess of $10,000 (3) Cash received by a person other than in the person's trade or business is not reportable. (4) Cash transactions that occur entirely outside the United States are generally exempt from the reporting requirements. The United States includes the 50 states and the District of Columbia. However, if any part of the transaction occurs in Puerto Rico, or a possession or territory of the United States, and the recipient is subject to the general jurisdiction of the IRS under the Internal Revenue Code, the transaction must be reported by the recipient. (5) An agent who: (a) receives cash from a principal, (b) uses all of the cash within 15 days in a cash transaction that is reportable on Form 8300 or 4789, and (c) discloses all of the information necessary to complete Part II of Form 8300 to the recipient of the cash in the second transaction does not have to file Form 8300 for the initial receipt of the cash. When and Where To File.-File this form by the 15th day after the date of the transaction with the Internal Revenue Service. Detroit Computing Center, PO Box 32621 Detroit, MI 48232. or with your local IRS office Keep a copy of each Form 8300 for 5 years from the date you file it Penalties-Civil and criminal penalties including up to 5 years imprisonment are provided for failure (or causing the failure) to file a report, for filing (or causing the filing) of a false or fraudulent report, and for structuring a transaction. statements de oro, ced to each person named in this form on or before January 31 of the year forowing the calendar year in which this report s made The statement must show the name and address of the business. the total amount of reportable cash received, and that the information was furnished to the IRS. Keep a copy for your records Specific Instructions Item 1.-If you are reporting a suspicious transaction (see Definitions), check Box lb. For a suspicious transaction you are also encouraged to telephone the local Internal Revenue Service Criminal Investigation Division. If you do not know the number, please call toll-free 1-800BSA-CTRS Part I.-This part must always be completed. Item 2.-Check the box if two or more individuals conducted the transaction you are reporting Enter identifying information in Part I for one of the individuals. Provide information on the other individual(s) on additional sheets of paper and attach them to this report. Item 6.-Enter the social security number of the individual named in Part I. If the individual nas no number, enter "None" Item 8.-in identifying the occupation. profession, or business of the individual named in Part I, use fully descriptive terms such as plumber, attorney, etc. and not nondescriptive terms such as merchant, businessman, selfemployed, etc Item 13.-Enter six numerals for the date of birth of the individual named in Part I. For example, if the individual's birth date was July 6, 1960. enter 07 06 60. Item 14.-You must verify the name and address of the individual identified in Part I. Verification must be made by examination of a document normally acceptable as a means of identification when cashing checks (for example. a driver's license, passport, or other official document) In item 14a, enter the type of document used to verify the identification. In Item 14b. identify the issuer of that document. In Item 14c. enter the document's number. For example, if the individual has a Utah driver's license enter "driver's license" in Item 14a. "Utah" in Item 14b. and its number in item 14c. Part II.-If the individual in Part I is conducting the transaction for himself or herself only, do not complete Part II. In all other cases, complete Part II. Item 15.-If the transaction is being conducted on behalf of more than one person (e.g., 2 persons are jointly purchasing a vehicle), check the box and complete Part II on any one of the persons Provide the same information requested in Part II on the other person(s) on additional sheets of paper and attach them to this report. Item 16.-If the person identified in Part II is an individual, check the "individual" box. For any person other than an individual, check the "organization" box. Check both boxes if the transaction is on behalf of both an individual and an organization. Item 17.-Check the box if any of the cash received is from a party or parties not identified in Part I or II Provide the same information requested in Part II on that party or parties on additional sheets of paper and attach them to this report Items 18, 19, and 20.-If the person on whose behalf the transaction was conducted was an individual, put his or her last name in item 18. first name in Item 19, and middle initial in Item 20 If the person is an organization, put its name in Item 18 and leave Items 19 and 20 blank. Item 21. If the person is an individual, enter his or her social security number, if not an individual, enter its employer identification number if the person does not have a social security or employer identification number. enter "None." Page 2 Item 22.-It the person sana enthout a social security number complete this tem Enter a general description of the type of official document issued to that person in item 22a (eg. "passport"), the country that issued the document in Item 22b, and the document's number in Item 22c Item 29.-Refer to Item 13. Part III.-This part must always be completed. Item 30.-Check the appropriate box(es) that describe the transaction. If the transaction is not specified in Boxes ah, check Box and briefly describe it (e.g.. car lease) Items 32, 33. and 34.-Provide the total price of the goods purchased, services provided. amount of cash exchanged, etc. (e.g. the total cost of a vehicle purchased, cost of catering service, exchange of currency) in item 32. Enter the total amount of cash received reportable on this return (see Multiple Payments for reporting requirements) in item 33 and the amount of $100 (and larger) bills in Item 34 Show only nearest dollar amounts. Round 50 cents or more to the next whole dollar. Item 35.-If the transaction is part of an installment sale, check the box. In item 35a. enter the number of payments agreed upon; in Item 35b. enter the amount of each installment payment; in Item 35c, check the "monthly" box if the payments are to be made monthly, or the "other" box if the payments are made at any other intervals and describe the intervals (e.g.. weekly, semi-annually, etc.). If the installments are for different amounts, attach a schedule. Item 36.-If the aggregate amount of cash received in two or more installment payments exceeds $10.000. enter the payment date that causes the aggregate amount to exceed $10.000. Also, see Multiple Payments. Item 37.-Check the appropriate box(es). If foreign currency is used, provide the country of Issuance and the amount (in US dollar equivalent) in the spaces provided. If currency of more than one foreign country is used, enter the information required by Item 37 on an additional sheet of paper and attach it to this report Part IV.-This part must always be completed. Item 39.-Enter the employer identification number (EIN) of the reporting business. Enter the owner's social security number only if the business has no EIN. Item 44.-Describe the nature of the business filing the report. Use descriptive terms (auto dealer, jewelry dealer) rather than nondescriptive terms (business, store). Item 45.-This report must be signed by an authorized individual. Also type or print the name of the signer below the signature. Definitions Person.-An individual, corporation. partnership, trust or estate, joint stock company, association, syndicate, joint venture, or other unincorporated organization or group. and all entities treated as legal personalities, including organizations that are exempt from tax. Cash.-The coin and currency of the United States or of any other country, which circulate in and are customarily used and accepted as money in the country in which issued. It includes United States notes and Federal Reserve notes, but does not include bank checks or drafts, travelers checks. wire transfers, or other negotiable or monetary instruments not customarily accepted as money. Suspicious Transaction. —A transaction in which it appears that a person is attempting to cause this report not to be filed or a false or incomplete report to be filed; or where there is an indication of possible illegal activity. Transaction.—It includes (but is not limited to) the purchase of goods, services, personal or real property, and intangible property by a customer a debt obligation paid for with cash: the receipt and conversion of cash to a negotiable instrument (e g.. a receipt of cash from a person in exchange for a check), and the receipt of cash to be held in escrow or trust. 6.3 Government Printing office. |