SEPTEMBER 2010 TAX BRIEFING

Reporting Receipt of Cash:
The issue in this program manager technical advice is whether a person who receives a check exceeding $10,000 in the course of a trade or business and cashes rather than deposits the check must file Form 8300 (Report of Cash Payments Over $10,000 Received in a Trade or Business). In concluding that the transaction is not reportable under IRC Sec. 6050I , the IRS notes that a personal check is not cash under Reg. 1.6050I-1(c)(1) . Therefore, the person receiving the personal check is not a recipient of cash for Section 6050I reporting purposes. The subsequent cashing of the check was not a receipt of cash for the underlying event (the relevant transaction), nor did it relate to the underlying transaction between the payer and recipient. The cashing of the check was a separate act by the recipient at a check casher. PMTA 2010-012.

Requesting Tax Payment Extension due to Undue Hardship:
An IRS memo addresses the rules for processing Form 1127 (Applications for Extension of Time for Payment of Tax Due to Undue Hardship), which was recently revised. Form 1127 cannot be used to request an extension of time to file a return, and if filed on that basis will be returned as nonprocessible. If the taxpayer is requesting an extension of time to pay a tax due on an upcoming return, Form 1127, with supporting documents, must be filed on or before the due date of that return, excluding extensions. If the taxpayer is requesting an extension of time to pay a deficiency, Form 1127, with supporting documents, must be filed on or before the due date for payment indicated in the tax bill. IRS Memo SB/SE-05-0710-029.

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