The IRS is cracking down on dealers failing to report cash purchase payments of more than $10,000.
The IRS fined a dealer $236,000 for 10 non-reported cash car deals following an audit, note the Auto Team Network of dealer accountants.
The IRS rule on cash payments covers U.S. and foreign currency in excess of $10,000, or equivalent cashier's checks, bank drafts or traveler's checks. Dealers must file Form 8300 for any cash purchases exceeding $10,000.
Auto Team says dealers should designate staffers, preferably an F&I manager, to answer customer questions regarding Form 8300 filings and supervise actual filings within the 15-day deadline after transactions.
Auto Team advises dealers to conduct an internal audit on compliance over the past two years. There are small penalties for late filing, but they're insignificant compared to fines for not filing at all.