GNYADA December 2016 Newsletter

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Lending Institutions (Not Customers) Pay Lien Fees

$5.00 (per lien) needs to be refunded to the customer within 60 days.

DMV-DIRECT receives questions from dealerships regarding who is responsible for the $5.00 vehicle lien- filing fee. The answer is the lending institution. The dealer receives that $5.00 fee in the proceeds they receive from the lending institution. When dealerships collect the vehicle registration fees from the customer, this occasionally mistakenly includes any lien fees. In those cases, that

If $5.00 feels like too trivial an amount for a dealer to get in hot water, consider how the situation can mount, if a pattern is revealed. If a customer discovers they were never refunded a lien-fee overcharge, they

could report this to the DMV, possibly triggering a full-scale audit. The more of these violations the audit reveals — generally based on random selection — the more exhaustive it will become.

IRS Form 8300 Letters Due January 31

For your convenience, here is a sample letter your dealership can use for qualifying transactions from 2016, to notify customers of your compliance with the IRS cash reporting requirements:

Federal law requires dealers to file Form 8300 with the IRS whenever a customer makes a cash transaction of $10,000 or more in cash (or cash equivalents). Dealers must also notify the customer, in writing, no later than January 31 of the following year, that it has filed Form 8300. One copy of the completed Form 8300, along with a copy of the notification to the customer, should be kept in the deal jacket, and another copy of each should remain in a separate folder of 8300 forms. While there is no legally required length of time to retain these forms, we suggest five years is appropriate. corporations willfully fail to file the proper form, fines of up to $500,000 and up to 5 years imprisonment, or both, may be imposed. Have a written policy in place, and comply with the rule by filing the proper forms on time. Possible fines/penalties Fines and penalties can vary depending on the offense. If

Date

Dear Customer:

We are required by the Internal Revenue Service (IRS) to report all transactions involving payments of more than $10,000 in cash (26 USC6060(I)). We filed Form 8300 with the IRS on (date) 2016, indicating that you paid us $(amount) in connection with your purchase of a (year, make, model, VIN).