02/15/11 - The Housing Assistance Tax Act of 2008 included the enactment of Section 6050W of the Internal Revenue Code, a new mandate requiring all processors to report the gross amounts of their merchant customers' payment card transactions to the IRS on a yearly basis. Effective January 1, 201, merchants are required to have provided the correct tax identification number (TIN) and tax filing name. If a merchant fails to provide this information or if the IRS notifies the processor of a discrepancy between the information provided by the merchant and the IRS records, the processor will be required to withhold income tax (currently 28%) from the merchant's future funding amounts, beginning in 2012. Additionally, processors are required to audit each merchant account and file an annual information return with the IRS. Processors must also provide each merchant payee with a corresponding Form 1099-K, reporting monthly and annual gross sales.

In response to the regulations detailed in Section 6050W of the Internal Revenue Code and the expense to processors of compiling and auditing all required merchant data, merchants will be billed a $2.10 monthly IRS reporting fee. Merchants will also be billed a $9.25 annual tax filing fee.

The monthly fee will begin on the February 2011 statement. New merchants will be charged starting one month after merchant approval. The annual tax filing fee will be billed in February 2011. These fees will appear as separate line items on the monthly statement.

For additional information, visit FiNet's 6050W page at HERE