Read this if you accept cash payments and present large cases in your dental practice

Very few doctors are aware of one of the more drastic federal laws connected to receiving cash payments.  If your practice receives a cash payment of $10,000 or more from a patient, you have 15 days to file a form 8300 to report the transaction to the IRS.  The IRS pays special attention to cash payments larger than $10,000 to guard against illegal activity such as money laundering, drug trafficking and tax evasion.  As such, they put severe penalties for not reporting these types of transactions.  An unintentional failure to properly file a form 8300 to the IRS can result in a $310 penalty per transaction, but the total penalty imposed can get as high as $3.78 Million in a calendar year.  An intentional disregard to properly file form 8300 can result in a penalty that is greater than $31,520 or the amount of cash received, up to $126,000.  In addition, there are criminal penalties which can result in imprisonment.

A few key points to take away if you receive a cash payment of $10,000 from a patient:

  • Contact your Fluence manager right away. We can help file form 8300 with the IRS if needed.
  • You will be required to provide your patient with a written statement notifying them you will be reporting the transaction to the IRS and this statement should also include details of the transaction, which mirrors the information reported on the form 8300. So, you will want to ensure you have accurate personal information for this patient (Full Name, Address, Social Security Number, Date of Birth, Occupation).
  • The $10,000 threshold applies to cash or cash equivalents, such as foreign currency, cashier’s checks, money orders, bank drafts, and traveler’s checks.
  • The reporting requirement in a dental practice will mainly apply to payments received for providing dental services. So, cash receipts received from a bank loan or other types of debt aren’t required to be reported.
  • Any suspicious transactions may be voluntarily reported to the IRS even if the amount does not exceed $10,000. For example, a patient only wanting to pay $9,999.00 for a large case could be viewed as suspicious.

Instances of patients wanting to make cash payments above $10,000 are likely to be rare, but it’s important to know the rules connected to accepting cash payments this high.  Please reach out to us if you have any questions on these rules or could have transactions subject to these rules.

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