Q: Why Form 8300 is needed?
A: Cannabis companies can't bank!
The National Cannabis Industry Association ("NCIA") explanation of the issues and risks revolving around the lack of banking access to the cannabis industry, provides a great overview why regulations need to change at the federal level to ensure safe banking for all licensed cannabis businesses.
Until then cash will be used throughout the supply chain within the cannabis industry making Form 8300 a required reporting form for most cannabis businesses.
Aviva Spectrum has created a low fixed fee service to handle all your form 8300 compliance issues. Every month we'll take care of the paperwork and even be able to electronically file on your behalf. Let's connect here to discuss how we can help streamline your 8300 form compliance process.
According to the IRS forms section of Form 8300, they estimate it will take 21 minutes for each form. This assumes you have the following information ready to fill out:
1) The ID of the person that paid you the cash ready to input
2) The w9 form completed by your client prior to filling out Form 8300
3) Identified all cash bills over $100 per cash transaction from your client
Yes, you can file this form electronically and we have a proven process to register each cannabis business and allow us to do all the filings for you. This registration process takes approximately 15 minutes and we've developed an easy to use registration guideline to help you through this process and allow us to do the filing for you!
Connect with us today and learn more about our fixed fee registration process for Form 8300 today! Schedule a FREE Form 8300 Consultation here.
What's the purpose of the Form 8300?
Are you currently operating business receiving large sums of cash payments from your clients? Generally, you must file Form 8300, Report of Cash Payments Over $10,000 Received in a Trade or Business, if your business receives more than $10,000 in cash from one client as a result of either one or multiple transactions related to your business.
Form 8300 provides key information to the Internal Revenue Service and the Financial Crimes Enforcement Network (FinCEN)
in their efforts to combat money laundering. This form assists the federal government to track, trace and combat potential
money laundering schemes. It's just one tool to help fight against criminal activities that range from tax evasion
to terrorist financing to drug dealing.
The short answer is YES! You are required to get the identity of the person who has provided you the cash payments. Most cannabis businesses use the most recent cash payment from their clients and the ID of the person who provided the most recent cash payment as the ID entered into the Form 8300. The IRS expects you however to keep track of all IDs of those individuals that provided you cash payments when you know it will be probable you'll require to fill out Form 8300. It's a best practice for cannabis businesses to follow these three easy step when receiving cash:
1) Provide your customers with a "cash receipt" form which requires them to fill it out BEFORE they show up to pay
you. In this form include sections for them to fill out the ID of the person who will be present to provide you
the cash payment.
2) All sales staff should be trained and implement a process where they are gathering a completed W9 form from your customers before you accept new sales orders from your customers. This gives your accounting staff less hassle when trying to communicate and report to your clients. Your sales staff should understand the potential federal penalties that will apply when forms like 8300 are not completed.
3) Have all cash payments require a scan of the ID from the person making the payment and save it to a secure folder
shared with only the appropriate level of staff members on your team.
Aviva Spectrum has provided proven steps for all cannabis business from cultivators, manufacturers, distributors, and retailers
on how to implement these best practices. Learn more by getting a FREE Form 8300 consultation here.
Working with Sonia and Aviva was productive and was a successful partnership for our organization which ultimalely helped us to reduce internal and external costs
Aviva provided us with valuable support and useful recommendation while we documented our internal controls