Independent sales organizations should ensure the legal names and Internal Revenue Service taxpayer identification numbers of their merchant customers match the IRS files, Jill M. Miller, attorney at Jaffe Raitt Heuer & Weiss, P.C., advised attendees at the Northeast Acquirers Conference in Dover, Vt., this week.
A bank or other organization that pays merchants settlements for their card transactions will have to begin reporting those payments beginning Jan. 1, 2011.
The issue involves an IRS requirement that the merchant’s identifying information match its record exactly, Miller said. That means ISOs must ensure their merchant information is correct in the processor’s records, too, because the processor likely will have to report the data to the IRS, she said.
If the data do not exactly match the IRS record, the agency could force merchants to withhold 28% of their revenue the following year, Miller said.
