August 2010

Final Regs Released for Payment Card and Third-Party Network Information Reporting

From Journal of Accountancy.

The IRS on Friday issued final regulations (TD 9496) regarding the new information reporting requirement under IRC § 6050W for payment card and third-party network transactions. Starting Jan. 1, 2011, banks and similar transaction settlement entities must file annual information returns for each participating merchant or other payee reporting aggregate gross receipts for the calendar year from credit and debit card sales or third-party network transactions. The final regulations adopted with several modifications—some in response to numerous comments—proposed regulations issued in November 2009 (REG-139255-08, with comments requested by Notice 2009-19).

The final regulations provided implementation guidance and amended existing regulations under sections 6041 and 6041A to provide relief from duplicate reporting for certain transactions. They also amended regulations under sections 6721 and 6722 to reflect penalties applying to failures to file correct information returns and payee statements required by section 6050W. In addition, the final regulations adopted without change proposed amended regulations under section 3406 to provide that amounts reportable under section 6050W are subject to backup withholding (effective for amounts paid after Dec. 31, 2011).

Full article.

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