IRS TIN Match Reporting Requirements
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IRS 1099-K Forms for merchants
Important Information regarding IRS Reporting
We are providing a Form 1099-K because, as part of The Housing and Economic Recovery Act of 2008, a new requirement was established that all Acquirers (electronic payment processors) in the electronic payments industry to report the gross amounts of their merchants’ transactions to the Internal Revenue Service (IRS). This reporting requirement applies to transactions beginning on January 1, 2011.
The first reports will be sent in January 2012 for sales in 2011. As a part of the 1099-K required format, the form must include the Filer’s Name, address and telephone number. Therefore, the form will include Global Payments’ Name, Address and Telephone Number. Volume reflected in the above reporting statement is based on actual transaction date rather than (as with your merchant statement) the settlement or funding date and, as a result, may not reflect the same volume totals as your monthly merchant statements.
IRS Reporting FAQ
As with any new IRS changes it is recommended you consult your tax advisor or go to www.irs.gov .
Why did I receive a Form 1099-K?
Starting January 1, 2011, new Internal Revenue Service (IRS) regulations require all Acquirers to file a Form 1099-K for all merchants. Because Global Payments processes credit card payments, we are subject to these new IRS regulations. For additional filing instructions please contact your tax advisor or go to www.irs.gov . IMPORTANT: Global Payments may not be your service provider, but provides electronic payment processing services and may provide deposits on behalf of your service provider.
Why is Global Payments listed as my “Filer Name” and not my service provider?
Global Payments may not be your service provider, but may provide electronic payment processing services on behalf of your service provider. The IRS requires that the provider who processes electronic payments and generates payment files be the one who files the Form 1099-K.
What information will be provided to the IRS?
The IRS will receive the same information that is provided to you on the Form 1099-K. This will include your gross credit card payments for 2011, which will be reported by month along with your name, address and Tax Identification Number (TIN). No sales occurring in 2010 or previous to 2010 will be reported; only sales processed beginning January 1, 2011.
What is a TIN and who needs to provide one?
A Taxpayer Identification Number (TIN) is a number used by the IRS. Your TIN could be your Social Security Number (SSN) or you may have an Employer Identification Number (EIN) issued by the IRS.
What happens if I don’t provide a TIN?
Global Payments is required by the IRS to collect your TIN for reporting purposes. If our records indicate a missing TIN or an unmatched TIN with the IRS system, you should have received mailing notifications or attempted calls from your service provider to obtain this information. If a valid TIN is not provided, your account could be subject to withholding 28% of your credit card payments in tax withholding in 2013.
Will the Form 1099-K replace the 1099-MISC forms?
No, the Form 1099-K is additional supporting information and does not change the existing 1099-MISC forms. Please consult your tax advisor for specific questions related to your filing requirements.
Will I receive a Form 1099-K for each merchant location?
Only one Form 1099-K is provided for each TIN. If each of your locations has a unique TIN, a Form 1099-K will be provided for each TIN. If you have multiple locations with the same TIN only one Form 1099-K will be generated which will include the volume for all locations.
Will the Form 1099-K include my gross sales amount or my net sales amount?
Your gross sales amounts will be shown on your Form 1099-K. For example, if you made $40,000 in sales and paid $1,600 in fees, your Form 1099-K will list $40,000 in gross sales. It will be your responsibility to determine the deductibility of fees that you have been charged when you file your tax return as normal. Chargebacks and returns are not taken into consideration in this amount because the IRS regulation requires gross sales volume only to be reported.
Is it possible to receive more than one Form 1099-K?
Yes, if you changed credit card processing services within the reporting year and the payment processing company who generates the file is different, then it is possible to receive more than one Form 1099-K. If you receive more than one Form 1099-K, each should reflect a unique Filer Name (which would indicate the payment processor or Acquirer that generated the payment file).