Wednesday, January 20, 2010
The article stated that records must be kept for 2010 and the first reports are due to the IRS early in 2011. In fact, the record keeping must begin in 2011, and the first reports will be due to the IRS in early 2012.
This is in accordance with the Housing Assistance Tax Act of 2008, which was passed into law in 2008 and therewith added section 6050W to the Internal Revenue Code. The new law requires information returns to be made for each calendar year by merchant acquiring entities and third-party settlement organizations for payment card transactions and third-party payment network transactions occurring in that calendar year.
The IRS created Form 1099-K, Merchant Card and Third-Party Payments, for reporting interest, dividends and other payments. The agency also issued proposed rules and regulations in November 2009 for implementing said reporting under section 6050W.
The proposed regulations describe who is required to file a return and which payment card and third-party network transactions are subject to the law. This is in addition to new withholding requirements under section 3402(t), scheduled to take effect Jan. 1, 2012.
Comments on the proposed regulations and the draft Form 1099-K must be received by Jan. 25, 2010, and may be submitted electronically, by mail or hand delivered to the IRS. The comments will help the IRS ensure smooth implementation of this program, including the mitigation of penalties in the early stages of implementation for all "but particularly egregious cases." A public hearing is scheduled for Feb. 10, 2010, in Washington, D.C.
For further information, please visit www.irs.gov/irs/article/0,,id=215740,00.html.
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