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The Electronic Transactions Association is advising processors and merchant acquirers to begin preparing now for Jan. 1, 2011. That is the date payment-industry companies will have to begin tracking the number and dollar amount of merchant transactions and report the information to the Internal Revenue Service. The IRS has said the measure could generate $10 billion in additional taxes over the next 10 years from small-business revenues that may be going uncollected. The Washington, D.C.-based trade group says the IRS plans to issue a draft of how the reporting will work by June 30. Meantime, Mary Bennett, ETA director of government and industry relations, advises companies to become familiar with the IRS's taxpayer identification number matching program. The IRS likely will require payment companies to use the numbers to track each merchant's transactions, Bennett says. Though the IRS has not yet released details of the reporting program, Bennett says the agency suggested it would be useful for companies to apply the matching program now. "Have someone assigned to understanding what the taxpayer identification number matching program is and how to integrate it into what you're doing," Bennett advises. Working on this ahead of the draft, which will be subject to a public-comment period, can help processors and acquirers, she tells CardLine sister publication ISO&Agent Weekly. "The sooner you understand the taxpayer identification number matching program, the more valuable and pertinent your comments will be," Bennett says. The IRS could release the draft earlier than June 30, or later if the nation's financial situation has shifted priorities, Bennett adds. The Jan. 1, 2011, deadline, however, is immutable. The merchant reporting required was included in the Housing and Economic Recovery Act of 2008, which President Bush signed into law last year (CardLine, 7/30/08).
