merchant record update
Section 6050W also requires reporting entities to perform backup withholding from merchant funding by deducting and withholding income tax (currently 28%) from the gross sales amount of reportable transactions if (a) the merchant fails to provide the merchant’s Tax Identification Number (TIN) to the reporting entity, or (b) the IRS notifies the reporting entity that the TIN (when matched with the name) is incorrect. To avoid backup withholding beginning in 2012, it is very important for each merchant to provide us with the correct name and TIN that such merchant uses to file its tax return for the merchant’s business.
If we do not have a valid TIN on file that matches the Tax filing name with the IRS, we may be required to begin backup withholding in January of 2012. These amounts will be a percentage of your daily credit card deposits, and will be submitted to the IRS on a regular basis. You will only be able to recoup the withheld funds after you file your federal tax return. We will not be able to refund withheld amounts to you.
This is for communication purposes only and is not intended to provide any legal or tax advice. Please visit the IRS Website at www.IRS.Gov for additional information on the 6050W requirements.