The IRS’s Office of Chief Counsel has published a memorandum providing guidance to state-legal marijuana companies that are having issues complying with Form 8300, which must be completed whenever a company receives over $10,000 in cash.
The memorandum was issued in response to a set of questions regarding the Bank Secrecy Act, asked by those working with marijuana businesses that are legally licensed under their state’s laws. Of particular note, the memorandum states that marijuana companies are not required to check the “suspicious transaction” box on the form simply because they are operating a marijuana business.
“You have asked a series of question related to the filing of Form 8300 that have arisen in examinations of trades or businesses involved in the legalized substance industry”, states the letter. “The memorandum provides guidance on many of these issues in a question-and- answer format. We are working on additional guidance on questions related to cash couriers/armored cars who transport cash between growers/manufacturers and dispensaries/sellers.”
The memorandum gives responses to a total of 16 different questions. You can find all 16 questions below, and you can find the answers to each by clicking here.
- Question 1: On Part 3, Line Item #33 which type of transaction should a legalized substance business be selecting?
- Question 2: What is reasonable cause and what would allow it?
- Question 3: Is it reasonable for a legalized substance business to check the suspicious activity box simply because of the type of product they deal with?
- Question 4: What is the impact on notification statements when the suspicious activity box is checked?
- Question 5: Does prior correspondence from the BSA Support team (CTR Ops) regarding violations in earlier periods establish the business’ knowledge and therefore, give BSA Exam the ability to assert intentional disregard? Also, if a business continues to do business with a customer who refused to provide EIN/TIN, is this considered intentional disregard of Form 8300 filing procedures?
- Question 6: Can a revenue agent put a marijuana business on an “inadequate records” notice because of a Form 8300 examination? See IRM 4.10.8.16
- Question 7: When cash payments are made between related entities in the marijuana industry is there a Form 8300 filing requirement?
- Question 8: If cash over $10,000 is given for a pre-paid deposit, is the recipient of the cash required to file Form 8300?
- Question 9: As part of completing the Form 8300, must the filer always include the TIN of anyone involved with the movement of the cash including 3rd parties, employees, cash courier services, including the drivers working for the cash courier service?
- Question 10: Does the filer of the Form 8300 need to notify all parties in Part 1 and Part 2 of the Form 8300 including a cash courier service and an employee/driver of the cash courier?
- Question 11: Can an employee/driver of a cash courier service provide the recipient of the cash/filer an unexpired marijuana license or card issued by a state government for the identification document (ID) and number required on line 14 of the Form 8300?
- Question 12: What must a filer do to verify the information of persons or businesses reported in Parts 1 and 2 of the Form 8300?
- Question 13: Can an employee/driver of a cash courier service provide the filer of the Form 8300 with the cash courier service’s business address as their address for purposes of the Form 8300 filing or must the employee’s address reported on Form 8300 be a residential address?
- Question 14: If there are multiple drivers for the same cash courier service over the course of the year how does the filer of the Form 8300 handle the notification statements?
- Question 15: A dispensary has three invoices from a grower for purchases of product. Invoice 1 is for $15,000, invoice 2 is for $9,000, and invoice 3 is for $18,000. On 10/1/23 the dispensary provides cash of $19,000 to the grower, broken down as follows: $15,000 of it is to pay off invoice 1, $3,000 is to pay towards invoice 2, and $1,000 is to pay towards invoice 3. The dispensary provides the grower with a second payment of $23,000 on 10/11/22. This pays off invoices 2 and 3. When does the grower have to file the Form 8300 and how much cash must be reported on it?
- Question 16: Same scenario as above however, the 2nd payment of $23,000 is received on 10/17/22. This pays off invoices 2 and 3. When does the grower have to file Form 8300 and how much cash must be reported on it?
