IRS to demand new reconciliations
The IRS plans to require credit card and other firms that process transactions to report gross network transactions to participating merchants—and the IRS—annually starting next year. The IRS will use the reports as it does W-2s and 1099s. Thus, a company whose gross receipts differ from those in these reports will be audited or asked to explain the differences. That means each business will have to monitor and reconcile the reports and, if there are errors, request corrected statements. [IR-2009-106; REG-139255-08, Income Tax Regs].
Stay tuned for further updates as they become available.