2015 GNYADA MEMBERSHIP DIRECTORY

CASH REPORTING

Federal law requires that dealers report all cash transactions over $10,000 utilizing IRS Form 8300. Dealers must also report traveler’s checks, money orders, and bank drafts under $10,000, when the combined total exceeds $10,000. Traveler’s checks, money orders or bank drafts over $10,000 do not have to be reported since the Bank who issued them is responsible for reporting these transactions.

HOT TOPICS 2015 GNYADA Membership Directory 69 Example 1 Example 2 Example 3

HERE ARE A FEW EXAMPLES TO ASSIST YOU IN UNDERSTANDING THE LAW:

A customer buys a car for $12,000 – He gives you $6,000 in cash and a $6,000 cashier check. You would be required to report this transaction because the expanded definition of cash now includes any combination of cash, cashier’s checks, money orders and bank drafts over $10,000. Example 2: A customer buys a car for $20,000 – She gives you a $7,000 cashier’s check, a $7,000 traveler’s check and a $6,000 bank draft. You would be required to report this transaction because the combined total exceeds $10,000, even though individually they are in amounts under $10,000. No actual “cash”is needed in this transaction to make it reportable. Example 3: A customer buys a car for $18,000 – He gives you a traveler’s check for $11,000, and cash for $7,000. You would not be required to report this transaction since the cash is under $10,000, and the traveler’s check is not added to the cash since it is over $10,000 and would be reported by the Bank.

Anti-Structuring Rule: 1) Neither the dealer nor any person involved in the transaction may attempt to “structure”the transaction to avoid the reporting requirement. 2) In addition, the salesperson cannot advise customers how to get around the rule (e.g. by paying part cash and part personal check). Penalties For Violating The Rule Violations of the reporting rule can result in penalties of $25,000 - $100,000 for each violation. Violations of the anti-structuring rule is a felony. This means that if you are convicted, you could do jail time . If you have any further questions or need clarification, please consult your supervisor.