IRS Regulations Affecting Your Merchant Account – 28% possible penalty!
For all business owners including our non-profit organizations accepting online transactions, tax season just became a little more complicated.
GroupNet Solutions’ desires to ensure our valuable clients DO NOT incur a 28% IRS penalty for online transactions. Our recommendation is to please have your Treasurer or President immediately contact and send directly by fax or e-mail to your specific merchant account provider a copy of your business licenses, tax returns, or any other company/organizational information generated by the IRS for ‘confirmation’ that your merchant account name and Tax Identification Number (TIN) matches your IRS records exactly. For example, this rule includes character-for-character verification including variation as simple as using the “&” symbol vs. spelling out “and.” This simple variation that could cost you 28%!
Money will still be withheld from your business/organization if the exact spelling of name and TIN does not match IRS records to your merchant account record. Your merchant services provider is required by law to withhold 28 percent of your sales made by credit card until corrected —a significant amount. Therefore, again, we recommend you request confirmation by e-mail or in writing from your merchant account provider immediately.
As payment card networks scramble to verify their accounts before the January 2013 deadline, it is important that all business owners who accept credit card payments do their homework now. Additionally, be mindful of your statements, special mailings, or phone calls notifying you of mismatching information, as business owners often aren’t even aware that a difference exists, let alone that it matters
Background: Starting in January 2013, the IRS will require all businesses that accept credit card payments to have their credit card sales reported by their merchant service provider; for example, Visa, American Express or Discover. In order to do so, the over seven million merchants who accept credit cards must verify both the exact spelling of their name and a re-confirmation that their tax identification number on file with their Merchant Processing company match exactly the IRS records. If your records match, you are OK and no further action is required. Your Merchant Processing company can tell you your status today. If your records do not match, you need to update either your Taxpayer ID or your Taxpayer Filer Name on file with your Merchant Processing company to match IRS records prior to January 1, 2013. Your Merchant Processing company will tell you what steps they require to update. Please allow extra time; therefore, GroupNet Solutions recommends that all business owners take action today!
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