The Internal Revenue Service has provided transitional relief from penalties for a Section 6050W filer who reports incorrect taxpayer identification number information on Form 1099-K information returns and payee statements filed under Section 6050W of the Tax Code.
The relief provided by
In addition, the notice informs Section 6050W filers that IRS notices informing payors that payee name and TIN combinations are incorrect (CP2100/CP2100A Notices) will not be sent based on incorrect name and TIN combinations on Forms 1099-K due before Jan. 1, 2014. The first CP2100 and CP2100A Notices with respect to payments subject to section 6050W will be sent in late 2014 based on incorrect name and TIN combinations on Forms 1099-K filed in 2014 for calendar year 2013 payments.
The Housing Assistance Tax Act of 2008 added Section 6050W to the Tax Code, requiring credit and debit card companies and third-party payment aggregators to provide information returns listing payment card transactions. As a result of the requirements, merchants must provide their valid tax identification number and tax filing name. If a merchant fails to provide its TIN or if the IRS informs them that there is a discrepancy between the information furnished by the merchant and the IRS’s own records, the reporting entity will be required to withhold tax on the merchant’s future funding amounts.
The IRS recently provoked criticism from Congress after reports that it sent Notifications of Possible Income Underreporting to approximately 20,000 small businesses based on the information it had received on their payment card transactions. House Small Business Committee chairman Sam Graves, R-Mo., wrote a letter to the IRS expressing his concerns (see
Notice 2013-56 will be published in Internal Revenue Bulletin 2013-39 on Sept. 23, 2013.
