Big IRS Update: Essential E-Filing Changes Every Business Should Be Aware Of

The Internal Revenue Service (IRS) has announced that effective January 1, 2024, most businesses will be required to electronically file Form 8300. This updated requirement is in compliance with other newer regulations that require e-filing for information returns. Form 8300 is used specifically for businesses who need to declare cash payments in excess of $10,000. Although many cash business transactions are legal and legitimate, Form 8300 is intended to provide information to help combat tax evasion, drug trade profits, and other criminal activities. The IRS may utilize the information on these reports to trace money and uncover illegal transactions.

More Businesses Eligible for Electronic Filing in 2024

The IRS has been in the process of expanding their electronic filing capacity with the goal of better customer service, simpler communication, faster returns, and a reduction in lost paper returns.

The new regulation to e-file Form 8300 applies only to businesses who are already mandated to file other information returns electronically, including the 1099 series and W-2. Businesses who fall into this category are those who are required to file at least 10 information returns other than Form 8300. Businesses who file fewer than 10 information returns of any kind, including 1099 and W-2, are not required to e-file Form 8300, but may do so if they choose.

An Electronic Filing Waiver is Available

If a business believes that filing information electronically would pose undue hardship, they may file a request for a waiver via Form 8508. If approved, this waiver would relieve the business of the e-filing requirement for that calendar year. A business cannot request a waiver that applies only to Form 8300. Businesses who have been granted the waiver must include the word “WAIVER” at the top center of each Form 8300 that they file with their paper return. Businesses who meet the guidelines of filing fewer than 10 information returns each year may choose between paper and electronic filing without submitting the waiver request form.

Religious Exemptions for the Use of Technology

If the use of technology to e-file a tax return conflicts with the taxpayer’s religious beliefs, they are automatically granted an exemption and may submit Form 8300 as part of their paper return even if they are filing more than 10 information returns. The filer must write “RELIGIOUS EXEMPTION” on the top center of each Form 8300 that they file.

What About Late Tax Returns?

Late tax returns must be self-identified. Businesses who are filing a late Form 8300 can do so in the same way that they would file Form 8300 on time, whether that is electronically or on paper. Businesses who are filing Form 8300 on paper must write “LATE” on the top center of each form that is submitted. If filing electronically, they must write “LATE” in the comments section of the return.

IRS Reminds Taxpayers of the Importance of Good Recordkeeping

The IRS requires taxpayers to maintain copies of each Form 8300 that they file, as well as any supporting documentation and statements sent to customers. Records should be kept for 5 years after the filing date. Although e-filing will provide confirmation that the form was filed, that confirmation does not serve as a complete record by itself. Taxpayers are strongly encouraged to save a copy of the form before they submit it electronically and should keep all confirmation numbers. Copies of paper files should also be maintained prior to submission to the IRS.

E-filing is Increasingly Popular

Many businesses are finding the IRS’s new e-filing system to be a convenient, secure, and cost-effective way of meeting reporting deadlines. Email acknowledgement of the filing is sent after each submission. The new system enables businesses to batch file e-reports, which can make submission even easier and require fewer company resources. For questions regarding the new e-filing system, whether your business is required to electronically file Form 8300 and other tax forms, contact your tax attorney.

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