Tax Administration

Money Laundering Forms Could Be Used to Detect Nonfilers Gao ID: T-GGD-92-56 June 23, 1992

Any business receiving more than $10,000 in cash during a sale must identify the purchaser by filing a Form 8300 with the Internal Revenue Service (IRS). The first 1,000 such forms IRS received in November 1990 provide good leads on potential nonfilers and underreporters. The forms cannot be used for this purpose, however, if they lack a valid tax identification number. Ironically, the number of forms being filed greatly increased during the same period that IRS inadvertently dropped the forms from its computer matching program. Although IRS plans to start using Form 8300 again in its computer match, it needs to increase the number of forms with valid tax identification numbers, possibly by requiring businesses to validate the numbers before customers leave their stores.



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