In February of last year, we discussed the IRS reporting requirements statute, which was added in November of 2009 to the Housing Assistance Tax Act of 2008.
In a nutshell, this statute required all credit card processing companies to report the merchant services activities of all merchants beginning January 1st, 2011. Processors are also required to report the correct legal name, Tax Payer Identification Number and address of all merchants processing credit cards. It is imperative that the information we have on record is accurate, as the IRS backup withholding rules will be applied to this statute. This means that our processors will be required to withhold Federal Income Tax (currently 28%) if any pertinent information is missing or if there are any discrepancies with Federal Tax ID or Social Security numbers. The 1099-K is the new form designed to keep track of your credit card processing volume for the IRS. (for more info visit http://www.irs.gov/irs/article/0,,id=215740,00.html )
Although the IRS has moved the mailing deadline from January 31, 2012 to the end of March, MOST TMC merchants should be receiving the form any day. Please be watching for your forms to arrive as they must be included with your tax paperwork.
Last year, we proactively sent out W-9's to all TMC merchants so we could verify that the information we have on file matches the IRS records. If the information was not the same, you were notified via email or by phone. If you did not receive a W-9, or you just want to verify that your account information is accurate, please feel free to contact our office (1-888-249-9919) for help. If you are not processing with TMC, it is a good idea to double check the information on file with your credit card processing company to prevent any backup withholding issues.
This new legislation DOES have an upside; you no longer have to walk through 12 months of processing statements or online reporting to know how much you processed in credit card volume! The new form will have it all clearly listed.
Making sure that the information we have on file is accurate, will assist us in preventing any IRS intrusions into your checking account!