13.1 Cash Transactions in Excess of $10,000
Exempt organizations are not exempt from the filing requirements of Form 8300 “Report of Cash Payments Over $10,000 Received in a Trade or Business.” (IRC Section 6050I and IRC Section 7701(a)(1)). Form 8300 is due the 15th day after the date the cash was received and should be mailed to the Internal Revenue Service, Detroit Computing Center, P. O. Box 32621, Detroit, MI 48232. The university/agency must give a written statement to each person named on a required Form 8300 on or before January 31 of the following calendar year in which the cash is received. A copy of the filed form should be kept for five years from the filing date.
Cash is narrowly defined as U. S. and foreign coin and currency or a cashier’s check, money order, bank draft, or traveler’s check. The “cash” transaction is further defined as any transaction conducted between a payer and the recipient in a 24-hour period. Transactions occurring outside the 24-hour period and up to a rolling 12 month period are considered related (and reportable) if the recipient knows, or has reason to know, that each transaction is one of a series of connected transactions. Payments for tuition, fees, room and board, etc. are considered to be related (and reportable) transactions. Note: Cash does not include a check drawn on the payer’s own account, such as a personal check, regardless of the amount or a charitable contribution.
Trade or business is defined as any activity constituting the sale of goods or the performance of services to produce income under Internal Revenue Code Section 162. One such example of trade or business income for a university would be tuition payments. The determination that an activity is not subject to unrelated business income tax does not control whether the activity constitutes a “trade or business” within the meaning of section 162. Thus, for example, a university/agency that receives a cash payment in excess of $10,000 for the rental of real estate must report the transaction on Form 8300 regardless of how the transaction might be viewed in the context of unrelated business income. However, if, for example, the university/agency receives a charitable cash contribution in excess of $10,000, it would not be subject to the reporting requirement since the funds were not received in the course of a trade or business. (IRS Notice 90-61).