Recently a new draft of section 6050W of the IRS Code stated that processors are obligated to report all companies' annual credit and debit card processing activity. In order to do so accurately, processors like MTG powered by Veracity (Midwest Transaction Group) have to acquire the most current tax ID name and number for all clients. Since the code was changed, MTG has contacted and corrected the information of roughly 1,500 businesses.
Some businesses, however, have not updated their information...and the deadline to do so is quickly approaching. The deadline for processors to enforce a penalty for merchants operating under an outdated tax ID name and/or number is January 2013.
While penalties for operating under outdated information may not begin until January, the tax reporting from your processor has occurred all year long. 1099-K reports must still be filed by your processor, which will report all your business transactions from 2012. And if your 1099-K form has missing or incorrect information, it will be rejected by the IRS! Merchants who do not work with processors to correct it will then be subject to withholdings--by IRS mandate--beginning in 2013.
So start 2013 off right by paying close attention to the following formation:
Again, the deadline for changes is January 1, 2013. Don't be late! If your tax ID name and number are not updated with the IRS by January 1, processors will be forced to begin withholding funds.
Questions about the new IRS Code? Please use MTG as a resource: 1.888.599.2209.