The IRS has reported an increase in scams and fraud involving automotive dealership filings of Form 8300 (Report of Cash Payments Over $10,000 Received in a Trade or Business).

Form 8300 is an informational return that the IRS uses to combat money laundering by drug dealers, scam artists and other criminals. Dealerships are required to file Form 8300 with the IRS within 15 days of receiving cash payments in excess of $10,000 for automobile transactions.

To skirt the law, a scheme regarding the Form 8300 has surfaced in which the client offers the dealership an “exemption certification” for Form 8300 that supposedly excuses the business from the filing requirement. According to the IRS, no such certification exists.

Whenever a dealership makes a cash deposit of $10,000 or more, the financial institution must file Form 4789 (Currency Transaction Report) with the IRS. Discrepancies between Form 8300 and Form 4789 filings are flagged for possible violations of the currency reporting laws.

With its increased enforcement budget, the IRS is taking action in a growing number of cases.