Money Laundering, Terrorism and Financial Institutions - USA Patriot Act Monitor

News Releases

2/20/2007 IRS Considers Form 8300 Filing Requirement for Car Dealer

A car dealer has an arrangement with an independent contractor who purchases cars at auction under the dealer’s license. The dealer pays for the vehicles, and if the independent contractor sells a car, he transfers the proceeds, less his commission, to the dealer. In one transaction, Arnold, the independent contractor, sold a car for $11,000. His commission was $500. He transferred $10,500 to the dealer, $6,000 in cash and $4,500 in a cashier’s check. The question was whether the dealer had to file a Form 8300 for receipt of more than $10,000 in cash under Section 6050I of the Internal Revenue Code. Cash, for purposes of the Form 8300 filing requirement, includes a cashier’s check (IRS Reg. 1.6050I-1(c)(1)(ii)(A)) The IRS Chief Counsel, in a memo (CCM 200707001) said no 8300 needed to be filed by the car dealer. In a prior ruling (Technical Advice Memo 200644017, 8/1/2006), an armored car service that deposited cash into a client’s bank account had to file Forms 8300 for cash deposits exceeding $10,000, but the client into whose accounts the cash was deposited did not have to file the form. In February 2003, in an Advance Notice of Proposed Rulemaking, FinCEN asked for comment on the degree to which businesses involved in vehicle sales should be subject to AML requirements. A SAR Activity Review released the same month as the ANPRM cited instances of money laundering activities involving car dealers, but reports on the suspicious activity were generally filed by financial institutions serving car dealers. FinCEN has not advanced its project involving vehicle sellers for four years, but may be ready to resume its focus on the issue.

USA PATRIOT ACT MONITOR is published by Civic Research Institute, Inc., 4478 U.S. Route 27, P.O. Box 585, Kingston, NJ 08528, 609-683-4450, info@civicresearchinstitute.com, as an update service for Money Laundering, Terrorism and Financial Institutions: Law · Regulation · Compliance · USA PATRIOT Act Monitor © 2004 Civic Research Institute, Inc. All rights reserved. Unauthorized copying expressly prohibited. The information in this publication is not intended to replace the services of a trained legal professional. Neither the editors, nor the contributors, nor Civic Research Institute, Inc. are by this publication engaged in rendering legal, accounting, or other professional services. The editors, contributors, and Civic Research Institute, Inc., specifically disclaim any liability, loss, or risk, personal or otherwise, which is incurred as a consequence, directly or indirectly, of the use or application of the contents of this publication.

<< News Releases Main Page