On August 30, the IRS formally announced that all Form 8300s must be eFiled (with limited exceptions) as of January 1, 2024. The IRS said the change is intended to make filing and communication regarding 8300 easier and quicker.

In order to file electronically, all dealers will need to register with the Financial Crimes Enforcement Network’s BSA eFiling system (bsaefiling.fincen.treas.gov/main.html). Once approved, the dealership representative will sign onto the BSA eFiling system and complete Form 8300, just like a blank PDF. Dealerships are encouraged to register well ahead of the January 1 deadline in case there are any technical difficulties.

Below are some tips, best practices, and differences from paper filing:

• Dealerships will no longer be able to skip over fields. If the dealership doesn’t have the customer’s social security number, it is recommended to enter it as all zeros. The IRS also recommends checking the “suspicious transaction” box if a customer is not willing to provide this information.
• Be sure to describe the dealership’s collection efforts in the comments section at the bottom of page two. It is recommended to provide dates and times of phone calls and emails, along with the response from the customer.
• Don’t delay filing due to lack of information. This applies to any field that the dealership can’t complete within the 15-calendar day deadline. The dealership can send an amended report whenever the other details have been collected. The filing penalties have increased from $50 per occurrence to $290 per occurrence. There is an additional $290 dollar fine assessed if the customer is not notified of the non-compliance.
• The dealership must print the completed form before submitting it online and save the confirmation receipt once finalized. You won’t be able to print it once the form is submitted. Keeping a copy of the filed Form 8300 is required.
• It is recommended that a simple worksheet be completed on every retail delivery. This will detail the total amount due on the sale of the vehicle, then deduct each payment received. Be sure to include the funding balance from the lender, trade credits, rebates, etc. Make two columns for this worksheet entitled ‘reportable’ and ‘non-reportable’ transactions. Your transactions should be clearly identified.
• Waivers are available for religious and other limited exemptions but do not preclude the taxpayer from filing 8300s. Just the electronic requirement.

IRS Form 8300 audits are on the rise. During the pandemic, audits were down due to the need for the auditors to visit the dealership to review the documents. Auditors are now back in the field and are more well-equipped with technology to do remote audits.

Submitting online is the easy part. Having a good system, with checks and balances in place to review cash payments, is a more difficult task. If your dealership is looking for best practices or would like to do an internal self-audit or training session, reach out to Withum for help and a complete list of best practices.

Phil Craft is a CPA and Senior Manager, and Jen Moylan is a Lead Consultant at Withum. They can both be reached at (732) 572-3900.