ASSIGNMENT
Background:
Your client, Mission Bay Pawn Brokers, Inc. (“MBPB”), has many cash transactions with customers. MBPB is in the pawn broking business. MBPB have heard they need to report cash receipt transactions over $10,000 to the IRS on
Form 8300. However, MBPB does not want to have to report these cash transactions and are asking if they can suggest to their clients to break the cash transactions into smaller amounts so that no one transaction exceeds $10,000 or suggest the clients pay in other than cash such as crypto or have the clients pay someone else who
would then aggregate the payments. MBPB have also considered not informing the customers that the transaction has been reported to the IRS.
MBPB needs advice for the following, and requires primary authorities to support answer:
1. Who is required to notify the IRS when the cash amounts exceed $10,000, i.e. which type of taxpayers?
2. What type of transactions are required to be reported, i.e. within the definition of “cash” transactions?
3. If crypto currencies are not considered cash for 2022 and 2023, will this change in 2024?
4. What is considered to be “cash” for the purposes of the reporting?
5. What is the due date for the reporting of the “cash” transactions?
6. Is there a reporting requirement to the customer when the transaction is reported to the IRS?
7. Are there any penalties for failure to file the information with the IRS or the customer about the cash
transactions?
You research should consider the following (but it is not an exhaustive list):
IRC § 6050I
Regs § 1.6050I–1
IRC § 6721
IRC § 6722
Your responsibility:
Prepare a tax research memo addressing all the questions that has been raised.Note that if the tax memo is not in the required format and/or contains very little analysis of primary authorities you will receive a zero (0) for the assignment.
You will need to support your conclusion using primary sources of tax law. Your textbook is NOT primary authority nor are IRS Publications.Refer to Chapter 2 for primary authorities. CCH AnswerConnect is not a primary authority, nor is Google Scholar nor are any other websites you may access. The primary authorities are legislative, administrative and judicial. You may use secondary authorities to assist you with identification and understanding the primary authorities, such as CCH AnswerConnect but your memo should only contain primary authorities.
You must use proper citation form in your memo (see Chapter 2 for help with citation form). The form for this communication should be professional and in the form of a tax research memo (examples posted on Canvas and a similar example in your textbook). You will see that citations are within the text of the document in the example. Once a court case has been cited in full, it can be referred to using simply the name in italics
