Introduction. Escrow arrangement contributions. Pre existing debt payments. Negotiable instrument purchases. Reimbursement of expenses

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1 Intrductin The law requires that trades and businesses reprt cash payments f mre than $10,000 t the federal gvernment by filing IRS/FinCEN Frm 8300, Reprt f Cash Payments Over $10,000 Received in a Trade r Business (See Exhibit 1, Frm 8300). Transactins that require Frm 8300 include, but are nt limited t: Escrw arrangement cntributins Pre existing debt payments Negtiable instrument purchases Reimbursement f expenses Making r repaying a lan Sale f gds/services Sale f real prperty Sale f intangible prperty Rental f real r persnal prperty Exchange f cash fr ther cash Custdial trust cntributins The infrmatin cntained in the frm assists law enfrcement in its anti mney laundering effrts. When businesses cmply with the reprting laws they prvide authrities with an audit trail t stp tax evasin, drug dealing, terrrist financing, and ther criminal activities. Objectives Determine what transactins a business must reprt Define cash Determine hw and when businesses shuld reprt payments Understand that civil and criminal penalties may be applicable fr nncmpliance Type f Payments t Reprt Trades and businesses must reprt cash payments received, if all f the fllwing criteria are met: The amunt f cash is mre than $10,000. The business receives the cash as: One lump sum f mre than $10,000 r Installment payments that cause the ttal cash received within ne year f the initial payment t ttal mre than $10,000 r

2 Previusly unreprted payments that cause the ttal cash received within a 12 mnth perid t ttal mre than $10,000 r The establishment receives the cash in the rdinary curse f a trade r business. The same agent r buyer prvides the cash. The business receives the cash in a single transactin r in related transactins. Cash Includes Cash includes the cins and currency f the United States and a freign cuntry. Cash may als include cashier s checks, bank drafts, traveler s checks, and mney rders with a face value f $10,000 r less, if the business receives the instrument in: A designated reprting transactin, as defined belw, r Any transactin in which the business knws the custmer is trying t avid reprting f the transactin n Frm Example: Tm Greenwd purchases a used car frm XYZ Aut Dealership fr a ttal f $12,000. He pays with a cashier s check having a face value f $12,000. The cashier s check is nt treated as cash because its face value is mre than $10,000. The business des nt need t file Frm A designated reprting transactin is the retail sale f any f the fllwing: A cnsumer durable, such as an autmbile, bat, r prperty ther than land r buildings that: Is suitable fr persnal use. Can reasnably be expected t last at least ne year under rdinary use Has sales price f mre than $10,000. Can be seen r tuched (tangible prperty). A cllectible (a wrk f art, rug, antique, metal, gem, stamp, r cin). Travel r entertainment, if the ttal sales price f all items sld fr the same trip r entertainment event in ne transactin r related transactins is mre than $10,000. The ttal sales price f all items sld fr a trip r entertainment event, includes the sales price f items such as airfare, htel rms and admissin tickets. Example: Ed Jhnsn asks a travel agent t charter a passenger airplane t take a grup t a sprts event in anther city. He als asks the travel agent t bk htel rms and admissin tickets fr the grup. He pays with tw mney rders, each fr $6,000. The travel agent has received mre than $10,000 cash in the designated reprting transactin and must file Frm Cash Des Nt Include Cash des nt include persnal checks drawn n the accunt f the writer. Cash des nt include a cashier s check, bank draft, traveler s check, r mney rder with a face value f mre than $10,000. When a custmer uses currency f mre than $10,000 t purchase a mnetary instrument, the financial

3 institutin issuing the cashier s check, bank draft, traveler s check, r mney rder is required t reprt the transactin by filing FinCEN Frm 104, Currency Transactin Reprt. Example: Jim Rberts purchases an autmbile frm ABC Aut Dealers fr $19,000. He pays with $4,000 in currency and a persnal check in the amunt f $15,000. Since a persnal check is nt cnsidered t be cash, ABC Aut Dealers des nt need t file a Frm Cash des nt include a cashier s check, bank draft, traveler s check, r mney rder that is received in payment n a prmissry nte r an installment sales cntract (including a lease that is cnsidered a sale fr federal tax purpses). Hwever, this exceptin applies nly if: The business uses similar ntes r cntracts in ther sales t ultimate custmers in the rdinary curse f its trade r business and The ttal payments fr the sale that the business receives n r befre the 60th day after the sale are 50% r less f the purchase price. Cash des nt include a cashier s check, bank draft, traveler s check, r mney rder that is received in payment fr a cnsumer durable r cllectible, and all three f the fllwing statements are true: The business receives it under a payment plan requiring: 1. One r mre dwn payments and 2. Payment f the rest f the purchase price by the date f sale. The business receives it mre than 60 days befre the date f the sale. The business uses payment plans with the same r substantially similar terms when selling t ultimate custmers in the rdinary curse f its trade r business. Cash des nt include a cashier s check, bank draft, traveler s checks, r mney rder received fr travel r entertainment if all three f the fllwing statements are true: The business receives it under a payment plan requiring: 1. One r mre dwn payments. 2. Payment f the rest f the purchase price by the earliest date that any travel r entertainment item (such as airfare) is furnished fr the trip r entertainment event. The business receives it mre than 60 days befre the date n which the final payment is due. The business uses payment plans with the same r substantially similar terms when selling t ultimate custmers in the rdinary curse f its trade r business. Definitin f a Related Transactin The law requires that trades and businesses reprt transactins when custmers use cash in a single transactin r a related transactin. Related transactins are transactins between a buyer, r an agent f the buyer, and a seller that ccur within a 24 hur perid. If the same buyer makes tw r mre transactins ttaling mre than $10,000 in a 24 hur perid, the business must treat the transactins as ne transactin and reprt the payments. A 24 hur perid is 24 hurs, nt necessarily a calendar day r banking day.

4 Example: A retail mtrcycle dealer sells a mtrcycle fr $9,000 in cash t Gary Smith at 10:00 a.m. During the afternn n the same day, Mr. Smith returns t buy anther mtrcycle fr his sn and pays $9,000 in cash. Since, bth transactins ccurred within a 24 hur perid, they are related transactins, and the mtrcycle dealer must file Frm Transactins are related even if they are mre than 24 hurs apart when a business knws, r has reasn t knw, that each is a series f cnnected transactins. Example: A client pays a travel agent $8,000 in cash fr a trip. Tw days later, the same client pays the travel agent $3,000 mre in cash t include anther persn n the trip. These are related transactins, and the travel agent must file Frm Example: A custmer purchases a vehicle fr $9,000 and then within the next 12 mnths pays the dealership additinal cash f $1,500 fr items such as a new transmissin, accessries, custmized paint jb, etc. The dealership is nt required t file a Frm 8300, if the additinal transactins are nt part f the riginal sales cntract and the custmer has n additinal legal bligatin t make such additinal transactins. Reprting Suspicius Transactins There may be situatins where the business is suspicius abut a transactin. A transactin is suspicius: If it appears that a persn is trying t prevent a business frm filing Frm If it appears that a persn is trying t cause a business t file a false r incmplete Frm 8300, r If there is a sign f pssible illegal activity. The business shuld reprt suspicius activity by checking the suspicius transactin bx (bx 1b) n the tp line f Frm Businesses are als encuraged t call the IRS Criminal Investigatin Divisin Htline at r the lcal IRS Criminal Investigatin unit. If a business suspects that a transactin is related t terrrist activity, the business shuld call the Financial Institutins Htline at The business may vluntarily file a Frm 8300 in thse situatins where the transactin is $10,000 r less and suspicius. When t Reprt Payments The amunt f cash a custmer uses fr a transactin, and when the custmer makes the transactin are the determining factrs fr when the business must file the Frm Generally, a business must file Frm 8300 within fifteen days after the custmer makes the payment. If the fifteenth day falls n a Saturday, Sunday, r hliday, the business must file the reprt n the next business day. Multiple Payments In sme situatins, the buyer may arrange t pay in cash installment payments. If the first payment is mre than $10,000, a business must file Frm 8300 within 15 days. If the first payment is nt mre than $10,000, the business adds the first payment and any later payments made within ne year f the first payment. When the ttal cash payments exceed $10,000, the business must file Frm 8300 within 15 days. After a business files Frm 8300, it must start a new cunt f cash payments received frm that buyer. If a business receives mre than $10,000 in additinal cash payments frm that buyer within a 12 mnth perid, it must file anther Frm 8300 within 15 days f the payment that causes the additinal payments t ttal mre than $10,000.

5 If a business must file Frm 8300 and the same custmer makes additinal payments within the 15 days befre the business must file Frm 8300, the business can reprt all the payments n ne frm. Example: On January 10, a custmer makes a cash payment f $11,000 t a business. The same custmer makes additinal payments n the same transactin f $4,000 n February 15, $5,000 n March 20, and $6,000 n May 12. By January 25, the business must file Frm 8300 fr the $11,000 payment. By May 27, the business must file anther Frm 8300 fr the additinal payments that ttal $15,000. Where t File Frm 8300 A business shuld file Frm 8300: IRS Detrit Cmputing Center P.O. Bx Detrit, MI Required Written Statement fr Custmers When a business files a Frm 8300, the law requires the business t prvide a written statement t each persn named n Frm 8300 t ntify them that the business has filed the frm. The statement must include the fllwing infrmatin: The name and address f the seller s business. Name and telephne number f a cntact persn fr the business. The ttal amunt f reprtable cash received in a 12 mnth perid and A statement that the seller is reprting the infrmatin t the IRS. The cde and regulatins nly specify the infrmatin that the business is required t include n a statement, nt the frmat f the statement. A business may use its invice fr the statement f ntificatin, as lng as the invice includes all required infrmatin. Prviding a cpy f Frm 8300 t the payee(s), althugh nt prhibited, is nt advisable due t the sensitive infrmatin cntained n the frm, e.g., Emplyer Identificatin Number (EIN) r Scial Security Number (SSN) f the filer. When t Prvide a Statement t the Custmer The business must prvide the written statement t its custmers n r befre January 31 f the year after the year in which the custmer made the cash payment that caused the business t file Frm A business that chses t mail the statement must mail the statement timely t ensure the custmer receives the statement by January 31. Recrdkeeping A business shuld keep a cpy f every Frm 8300 it files and the required statement it sent t custmers fr at least five years. Penalties Businesses may be subject t civil and criminal penalties fr nncmpliance with the law. Civil Penalties

6 Civil penalties and applicable rules are: Negligent failure t timely file, IRC Sectin 6721(a) (2) (A): $50 per vilatin, nt t exceed $250,000 per calendar year ($100,000 fr persns with grss receipts f nt mre than $5,000,000). Negligent failure t include all required infrmatin n the return r inclusin f incrrect infrmatin, IRC Sectin 6721(a) (2) (B): $50 per vilatin, nt t exceed $250,000 per calendar year ($100,000 fr persns with grss receipts f nt mre than $5,000,000). If any failure under IRC Sectin 6721 is crrected n r befre the 30th day after the required filing date, the penalty is reduced t $15 in lieu f $50 and the maximum amunt impsed shall nt exceed $75,000 ($25,000 fr persns with grss receipts f nt mre than $5,000,000). Negligent failure t furnish crrect payee statements, IRC Sectin 6722(a) and (b): $50 per failure, nt t exceed $100,000 per calendar year. Intentinal disregard f the requirement t timely file r t include all required infrmatin, IRC Sectin 6721(e) (2) (C): the greater f: (1) $25,000, r (2) the amunt f cash received in the transactin, nt t exceed $100,000 (with n calendar year limitatin applicable). The penalty applies t each ccurrence. Intentinal disregard f the requirement t furnish a crrect payee statement, IRC Sectin 6722(c) (1) (A): $100 per failure, r if greater, 10 percent f the aggregate amunts f the items required t be reprted crrectly (with n calendar year limitatin applicable). Criminal Penalties A persn may be subject t criminal penalties fr: Willful failure t file. Willfully filing a false r fraudulent frm. Stpping r trying t stp a frm frm being filed r Setting up, helping t set up, r trying t set up a transactin in a way that wuld make it seem unnecessary t file Frm Any persn required t file Frm 8300 wh willfully fails t file, fails t file timely, r fails t include cmplete and crrect infrmatin is subject t criminal sanctins as a felny under IRC Sectin Sanctins include a fine up t $25,000 ($100,000 in the case f a crpratin), and/r imprisnment up t five years, plus the csts f prsecutin. Any persn wh willfully files a Frm 8300, which is false with regard t a material matter, may be fined up t $100,000 ($500,000 in the case f a crpratin), and/r imprisned up t three years, plus the csts f prsecutin. (IRC Sectin 7206(1)) The penalties fr failure t file may als apply t any persn (including a payer) wh attempts t interfere with r prevent the seller (r business) frm filing a crrect Frm This includes any attempt t structure the transactin in a way that wuld make it seem unnecessary t file Frm Structuring means breaking up a large cash transactin int small cash transactins. Putting It All Tgether

7 In this lessn yu learned: Wh must file Frm When a Frm 8300 must be filed. What cnstitutes cash. Hw t identify designated reprting transactins. What is a related transactin. Hw t identify a ptentially suspicius transactin. What penalties may be assessed fr nncmpliance. FAQs regarding Reprting Cash Payments f Over $10,000 (Frm 8300) 1. What des cash mean fr the purpses f Frm 8300? Cash is mney. It is currency and cins f the United States and any ther cuntry. Cash is als certain mnetary instruments a cashier s check, bank draft, traveler s check, r mney rder if it has a face amunt f $10,000 r less and the business receives it in: A designated reprting transactin as defined in Treas. Reg. sectin I 1(c)(iii) (generally, a retail sale f a cnsumer durable, a cllectible, a travel r entertainment activity) r Any transactin in which the recipient knws the payer is trying t avid the reprting f the transactin n Frm Is a persnal check cnsidered cash fr reprting n Frm 8300? Persnal checks are nt cnsidered cash. 3. What is the definitin f a transactin? A transactin is the underlying event resulting in the transfer f cash. Examples include: Sale f gds, services r real r intangible prperty Rental f gds r real r persnal prperty Cash exchanged fr ther cash Establishment, maintenance f r cntributin t a trust r escrw accunt A lan repayment Cnversin f cash t a negtiable instrument such as a check r a bnd 4. What is a designated reprting transactin? Generally, a designated reprting transactin is the retail sale f any f the fllwing: A cnsumer durable, such as an autmbile r bat. Prperty is generally a cnsumer durable if it is

8 tangible persnal prperty (nt real r intangible prperty) that: Is generally suited fr persnal use, Is expected t last at least ne year under rdinary use, and Has a sale price f mre than $10,000. A cllectible (such as a wrk f art, rug, antique, metal, gem, stamp, r cin) An item f travel and entertainment (if the ttal sales price f all items fr the same trip r entertainment event is mre than $10,000). 5. Wuld a Mbile Hme be classified as persnal r real prperty fr purpses f filing Frm 8300? A retail sale f a mbile hme is persnal prperty. A mbile hme qualifies as persnal prperty and a cnsumable durable fr determining any required Frm 8300 reprting, regardless f hw the purchaser intends t use r ultimately uses the mbile hme. 6. Wh must file Frm 8300? Any persns wh receive mre than $10,000 while cnducting their trade r business must file a Frm The $10,000 may ccur in a single transactin, r a series f related transactins. 7. What is a related transactin? Transactins between a buyer, r agent f the buyer, and a seller that ccur within a 24 hur perid are related transactins. In additin, transactins mre than 24 hurs apart are related if the recipient f the cash knws, r has reasn t knw, that each transactin is ne f a series f cnnected transactins. 8. Des the 24 hur perid mean ne day such as all day Tuesday r des it mean literally 24 hurs such as frm 11:00 am n Tuesday t 11:00 am n Wednesday? A 24 hur perid is 24 hurs, nt necessarily a calendar day r banking day. 9. A custmer purchased a vehicle several mnths ag fr $9,000 cash. Within the next 12 mnths, the custmer paid the dealership additinal cash f $1,500 fr items relating t the vehicle such as a repair t the vehicle's transmissin, purchase f accessries and a custmized paint jb, etc. Is the dealership required t file a Frm 8300 fr these transactins? N, unless the dealer knew r had reasn t knw the sale f the vehicle and the subsequent transactins were a series f cnnected transactins (fr example, if the dealer and the custmer agreed, as a cnditin f the sale f the vehicle, that the custmer wuld be bligated t pay the additinal $1,500). 10. What payments must be reprted? A business must file Frm 8300 t reprt cash paid t it if the cash payment is: Over $10,000, Received as: 1. One lump sum f ver $10,000,

9 2. Tw r mre related payments that ttal in excess f $10,000, r 3. Payments received as part f a single transactin (r tw r mre related transactins) that cause the ttal cash received within a 12 mnth perid t ttal mre than $10,000. Received in the curse f trade r business, Received frm the same buyer (r agent), and Received in a single transactin r in tw r mre related transactins. A custmer wired $7,000 frm his bank accunt t the dealership's bank accunt and als presented a $4,000 cashier check. Des the dealership cmplete Frm 8300? A wire transfer des nt cnstitute cash fr Frm 8300 reprting. Since the remaining cash remitted was belw $10,000, the dealer has n filing requirement. When is the Frm 8300 due? A business must file Frm 8300 within 15 days after the date the cash was received. If there are subsequent payments that are made with respect t a single transactin (r tw r mre related transactins), the business shuld file the frm 8300 when the ttal amunt paid exceeds $10,000. Each time the payments aggregate in excess f $10,000 the business must file anther frm 8300 within 15 days f the payment that causes the additinal payments t ttal mre than $10,000. If the business is unable t btain the Taxpayer Identificatin Number f a custmer making a cash payment f ver ten thusand dllars, shuld the business file Frm 8300 anyway? Yes, the business shuld file Frm 8300 with a statement explaining why the Taxpayer Identificatin Number is nt included. Des a whlesaler reprt transactins paid in US (r freign) cins and currency nly? Yes, if the whlesaler receives payment in the frm f cins r currency. A whlesaler, hwever, need nt reprt transactins paid with cashier s checks, bank drafts, traveler s checks, r mney rders. What if a retailer als des sme whlesale transactins, must the business reprt all transactins, r just the retail nes? If the trade r business f the seller principally cnsists f sales t ultimate cnsumers, then all sales, including whlesale transactins, are cnsidered retail sales and are subject t the Frm 8300 reprting requirements. A taxi driver makes weekly payments in cash t a taxi cmpany as a lease payment. During a twelvemnth perid, these payments ttal mre than $10,000. Are these payments cnsidered related transactins and is the taxi cmpany required t file a Frm 8300? Yes, the weekly lease payments cnstitute payments n the same transactin (the leasing f the cab). Accrdingly, the taxi cmpany is required t file Frm 8300 when the ttal amunt exceeds $10,000. Each time the payments aggregate in excess f $10,000 the taxi cmpany must file anther frm 8300 within 15 days f the payment that causes the additinal payments t ttal mre than $10,000. A husband and wife purchase tw cars at ne time frm the same dealer and the ttal cash received $10,200. Hw many Frm 8300s shuld the car dealer file? The transactin can be viewed as either a single transactin r tw related transactins. Either way, it warrants nly ne Frm 8300.

10 If a custmer purchased a cashier s check at the bank fr ver $10,000, wuld the bank reprt the transactin? Des the seller f a vehicle need t reprt the transactin if the same cashier s check is subsequently used t purchase a vehicle? The bank is required t file a Currency Transactin Reprt (nt a Frm 8300) in this scenari. Generally, the purchase f a vehicle with a cashier s check that is ver $10,000 shuld nt be reprted n Frm A cashier s check, bank draft, traveler s check, r mney rder with a face amunt f mre than $10,000 is nt treated as cash and a business des nt have t file Frm 8300 when it receives them. These items are nt defined as cash because, if they were bught with currency, the bank r ther financial institutin that issued them must file a Currency Transactin Reprt (CTR). Regarding related transactins, if a custmer purchased an item, then eight weeks later the same custmer purchased a different item, are these amunts aggregated and reprted n the Frm 8300? N, if the tw payments are fr separate unrelated transactins. A custmer depsited ver $10,000 in cash int his bank accunt, which was btained frm a sale f heavy equipment. Is there a frm the bank has t file? The law requires the financial institutin that receives a depsit f mre than $10,000 t submit a Currency Transactin Reprt (CTR) t the Treasury. The fact that this was a result f a sale f heavy equipment has n bearing. Must a business ntify its custmer that the business has filed a Frm 8300 regarding the cash transactin with the custmer? Yes, a business must ntify its custmer, in writing, by January 31 f the subsequent calendar year. Can a cpy f the Frm 8300 be given t the custmer as a written ntice? Yes, since the Frm 8300 cntains the name, address, cntact telephne number f the filer, aggregate amunt f reprtable cash received and infrms the nticee that the paryment(s) are being reprted t the IRS, the Frm 8300 wuld be acceptable as written ntificatin. Hwever, if during the calendar year, the filer has transactins with the nticee which were included n mre than ne Frm 8300, furnishing cpies t the nticee f multiple Frms 8300 des nt meet the ntice requirement because it is nt a single statement. In this situatin, the Frm 8300 filer shuld prvide a single written ntice fr all f the transactins. It shuld be nted that while the practice f using a cpy f the Frm 8300 as a ntice may be cnvenient, it may nt be advisable because f the sensitive infrmatin cntained n the frm; e.g. Emplyer Identificatin Number (EIN) r Scial Securiy Number (SSN). If a business filed a Frm 8300 n an individual and checked the suspicius transactin bx and an 8300 reprt was nt required, des the business have t infrm the individual by January 30 abut the fact that it filed Frm 8300? N, because reprting f the suspicius transactin in this instance is vluntary. A business is nly required t prvide a statement t individuals if the filing f the Frm 8300 is required. A business is prhibited frm infrming the buyer that the suspicius transactin bx was checked. Instead f sending the custmer a separate ntificatin letter, can the dealership use the sales invice as the ntificatin requirement, if the sales invice has language printed n it that the IRS will be furnished with infrmatin fr cash sales ver $10,000? There is nthing in the cde r regulatins mandating a specific frmat fr the custmer statement. The regulatins, hwever, establish certain minimum requirements. As lng as these minimum requirements are met, there wuld be n prblem if the seller chse t print the required language n an invice. Treasury Regulatin sectin I 1(f)(2) states:

11 0. Frm f statement. The statement required by the preceding paragraph need nt fllw any particular frmat, but it must cntain the fllwing infrmatin: The name and address f the persn making the return; The aggregate amunt f reprtable cash, received by the persn wh filed the Frm 8300 during the calendar year, in all related cash transactins; and A legend stating that the infrmatin cntained in the statement is being reprted t the Internal Revenue Service. Hw can a business get Frm 8300? Frm 8300 is available in English r Spanish: Via the telephne n the IRS frms line at Via the internet at the IRS.gv website r FinCEN website. Are there any publicatins that will help with filing Frm 8300? Yes. Publicatin 1544, Reprting Cash Payments f Over $10,000 (Received in a Trade r Business) explains why, when, and where t file Frm It als explains key issues and terms related t Frm This publicatin is available in English r Spanish: At the IRS frms line at r On the internet at the IRS.gv website. Where des a business file Frm 8300? A business shuld mail Frm 8300 t: Internal Revenue Service Detrit Cmputing Center P.O. Bx Detrit, MI Hw can a filer cnfirm that a filed Frm 8300 has been received by IRS? The filer can cnfirm the IRS received the Frm 8300 by: Sending the frm via certified mail with return receipt requested r Calling the Detrit Cmputing Center at If a custmer (the buyer) abut whm the Frm 8300 was filed wants a cpy f the frm, they must cntact the filer. Des the IRS have an address t send questins regarding Frm 8300? Yu can send questins cncerning Frm 8300 t 8300QUESTIONS@IRS.GOV. The system will nt accept actual Frms Helpful Tips Autmtive Tax Tips

12 This sectin prvides users with imprtant infrmatin t keep in mind when reprting taxes fr yur autmtive business. Frm 8300 Wh must file? Each persn engaged in a trade r business wh, in the curse f cnducting that trade r business, receives mre than $10,000 in cash in ne transactin r in tw r mre related transactins must file a Frm 8300 (PDF). Any transactins cnducted between a payer (r its agent) and the recipient in a 24 hur perid are related transactins. Transactins are cnsidered related even if they ccur ver a perid f mre than 24 hurs if the recipient knws, r has reasn t knw, that each transactin is ne f a series f cnnected transactins. Frm 8300 may be filed vluntarily fr any suspicius transactin, even if the ttal amunt is less than $10,000. Yu, as the filer, shuld keep a cpy f each Frm 8300 fr 5 years frm the date yu file it. When t file? File Frm 8300 by the 15th day after the date that the cash was received. If that date falls n a Saturday, Sunday, r legal hliday, file the frm n the next business day. Prvide a written statement Yu, as the filer, must give a written statement t each persn named n a required Frm 8300 n r befre January 31 f the year fllwing the calendar year in which the cash is received. The statement must shw the name, telephne number, and address f the infrmatin cntact fr the business, the aggregate amunt f reprtable cash received, and that the infrmatin was furnished t the IRS. Keep a cpy f this statement fr yur recrds. Changing Accunting Methds Changing yur accunting methd generally requires IRS apprval. T get apprval, yu must file Frm 3115, Applicatin fr Change in Accunting Methd (PDF). A change in yur accunting methd includes a change nt nly in yur verall system f accunting but als in the treatment f any material item. A material item is ne that affects the prper time fr inclusin f incme r allwance f a deductin. Installment Methd If yu finance the purchase f yur prperty, instead f having the buyer get a lan r mrtgage frm a third party, yu prbably have an installment sale. It is nt an installment sale if the buyer brrws the mney frm a third party and then pays yu the ttal selling price. Read mre abut installment sales in the Installment Methds Tax Tip.