The Internal Revenue Service on Aug. 13 released its rules for how acquirers and processors should report their merchants’ credit, debit and gift card transactions to the agency beginning next year.
Signed into law in 2008, (see story) the IRS reporting measure is meant to ensure that merchants report all of their sales to ensure proper tax collection.
The rule covers companies that settle payment card transactions with merchants. Merchants will receive an IRS 1099-K document that contains the gross amount of payments made to them.
There are some exceptions for gift cards, the rules state. A private-label gift card that can only be used at one merchant or a related group of merchants is exempt from reporting. However, sales from private-label gift cards that can be used among unrelated retailers would have to be reported, the rules say.
The new regulations will be published in the Federal Register on Monday, and will also be effective that date, says the Electronic Transactions Association, a Washington, D.C.-based organization for the the acquiring industry.
What do you think about this? Send us your feedback. Click Here.