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Table of Contents

Lead Story

Giving has no season


Industry Update

NFC race heating up

Proximity mobile payments get closer

VeriFone pays $485 million in stock for Hypercom


Visa makes pitch for U.S. microlending

$60 million to fuel small business lending

BAI Retail Delivery 2010: All about retail banking in the 21st century

Ed McLaughlin

Research Rundown

The top 25 U.S.-based charities

Selling Prepaid

Prepaid in brief

Visa pushing prepaid cards for undeserved

Patti Murphy
Inside Microfinance

Gift cards versus the government

Thom Aldredge
World Gift Card


Financing business startups: What ISOs should know

Brandes Elitch
CrossCheck Inc.

PCI changes, incremental step toward industry compliance

Paul Rasori
Secure POS Vendor Alliance


Street SmartsSM:
Enlightening talk about gateways

Ken Musante
Eureka Payments LLC

Stay tuned to your needs when selling

Jeff Fortney
Clearent LLC

Ensuring sales and marketing success in 2011

Peggy Bekavac Olson
Strategic Marketing

PCI: The year in review, the year to come

Tim Cranny
Panoptic Security Inc.

Company Profile


New Products

Preparing for 1099-K

Data Delivery Services Inc.


Give the gift of knowledge



Resource Guide


A Bigger Thing

The Green Sheet Online Edition

December 13, 2010  •  Issue 10:12:01

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New Products

Preparing for 1099-K

Product: CompliAssure

A major change is looming for merchants and their acquirers with the introduction of a requirement that merchants' gross credit and debit card receivables be reported by their settlement entities to the Internal Revenue Service beginning in 2012 for card sales on Jan.1, 2011, and onward.

Reporting and data management solutions provider Data Delivery Services Inc. unveiled an online service that it said will make that process a lot simpler by helping to calculate card sales on a month-by-month timetable, identify deductions and avoid errors that can prove costly to merchants. The service is available both to merchants and to the settlement entities responsible for reporting their revenue.

Report sales data, identify deductions

Called CompliAssure, the service is a web-based reporting tool that helps acquirers and other settlement entities (which can be ISOs, processors, or other third-party payment providers) track, organize and record the pertinent card sales data of their merchants for delivery to the IRS.

"We believe call volume for our ISOs and acquirers is going to go through the roof come January 2012 when they start sending out these 1099s," said John Nix, Senior Vice President, International Sales & Marketing for DDS. "We thought through a lot of the issues and this allows them to start educating their merchants now so there's not a surprise a year from now."

The program also provides a reconciliation of card sales on the 1099-K form to those on the monthly statements merchants receive from their processors, showing merchants what fees were paid each month (discount fees, interchange, chargebacks, etc.) so they can track them and itemize their deductions in preparation for tax filing.

"[The settlement entities] are just reporting the gross salary for the merchant, and there's no underlying detail that explains why it really wasn't $100,000 in [taxable] sales - why it was really another amount," Nix said. "We're providing really two reporting tools: one is to build a 1099 report for the IRS, and the second is providing a reporting tool to merchants, ISOs and acquirers to help their merchants when it comes to filing their taxes."

Nix said DDS already provides online reporting of credit and debit card statements for over 1 million U.S. merchants (though, generally speaking, merchants who log in to view such statements see the names of their ISOs or acquirers, as the DDS-run portal is private-label branded), and that their 1099-K tax reporting offering can simply be added to that suite.

Furthermore, the1099-K statements of merchants who get their online statements through providers other than DDS can be integrated into that service without having to subscribe to DDS' entire reporting suite, Nix said.

Nix noted the program displays receivables and chargeback information on a month-by-month timetable, and that users can drill down to get receivables information within more specific categories, such as by different card types.

The importance of accurate TINs

For acquirers, the program displays merchant and tax identification numbers (TINs) for each client, which are especially important because the IRS can impose severe penalties through "backup withholding" (mandating that a certain percentage of merchant receivables be withheld by the acquirer every day until the TIN is corrected) if the TIN that's reported doesn't match the government's records, according to Mike Kiernan, Chief Financial Officer at DDS.

CompliAssure compares TINs on an acquirer's database to those on record at the IRS to ensure accuracy and helps merchants correct mistakes. Tiernan said data compiled by DDS indicates that as many as 28 percent of the TINs that acquirers have on file are inaccurate.

Data Delivery Services Inc.

Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.

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