Federal Laws and Regulations
Credit/Debit Card Reporting (Section 3091)
Housing & Economic Recovery Act of 2008 (PL 110-289)
SIGNED INTO LAW
July 30, 2008
REGULATED BY
Internal Revenue Service, www.irs.gov
SUMMARY OF MAJOR POINTS
Section 3091 of the Housing & Economic Recovery Act of 2008 requires banks and other credit/debit card processors to provide information to the Internal Revenue Service (IRS) on credit/debit card payments made to merchants. Reporting begins in 2012 for gross receipts paid in 2011.
Retailers are to receive a copy of the report that goes to the IRS. Although the law does not require it, prudent action would be to reconcile those statements with company records.
The law includes back-up withholding requirements. Banks and card processors will be asked to include name, address and taxpayer identification number (TIN) on the reporting form for each merchant. If the TIN is not included, the card processor will be required to withhold 28 percent of the payments to cover potential tax liabilities. Most card processors do not have merchants’ TINs and should be asking retailers for them before they begin reporting in 2012. It would be advisable to provide a TIN upon request.
COMPLIANCE
Applies to tax returns for calendar years after Dec. 31, 2010.
DISCLAIMER
The information provided here is designed only to alert retailers of possible obligations under the credit/debit card reporting provisions of the Housing & Economic Recovery Act of 2008 (PL 110-289). It is not intended as legal or compliance advice. More information is available from the Internal Revenue Service,
www.irs.gov.