Bakersfield Car Dealer Bros Plead Guilty to Failing to File Form 8300 Cash Transaction Reports

Northern California Woman Pleads Guilty to False Return Omitting Bonus Pay
Northern California Thai Restaurant Owner Sentenced for Underpaying Undocumented Workers and Tax Fraud

 

Reminding taxpayers that there are more than one way the government can skin a cat, the DOJ issued a press release last week publicizing the guilty pleas of two Bakersfield brothers for failing to file and for failing to report the failure to file Forms 8300, Cash Transaction reports.  Interestingly, the IRS sealed the deal in this case by using one of the many tools in their toolbox, undercover operations.  Undercover IRS agents (or other federal agents involved from ICE and HSI) made purchases over $10,000 on two separate occasions (likely to mitigate any defense of aberration) which were not reported on CTR’s (Form 8300).  Per the DOJ press release:

According to court documents, the defendants co-owned Catano’s Auto Sales and Repair in Bakersfield. Their auto dealership was required by federal law to file a form, called a Form 8300, on any cash transaction from a single customer that exceeded $10,000 in a one-year period. On April 2, 2013, an undercover federal agent purchased a vehicle for $12,000 cash from the dealership and requested that the dealership not file a Form 8300 on the transaction. The undercover agent also stated to Ramiro Catano that the cash used to purchase the vehicle was from the sale of cocaine. Following the sale, the defendants did not file a Form 8300 on the transaction. Then, on July 26, 2013, an undercover federal agent purchased a vehicle for $16,000 cash from the dealership. As with the earlier transaction, the undercover agent requested that the dealership not file a Form 8300 on the transaction, and the defendants did not do so.

CTR’s are required when any business receives more than $10,000 in a single transaction or related transactions from a customer.  (As an aside, a key term is “more than,” so it is only triggered at $10,000.01.)  In case you are wondering, the $28,000 spent in the undercover scheme was forfeited back to the United States.

 

The author of this post is Daniel W. Layton, a partner at Layton & Lopez Tax Attorneys, LLP in Orange County, CA.  He is a former IRS trial attorney and ex-prosecutor from the U.S. Attorney’s Office in the Tax Division in downtown Los Angeles.