This is the first year that the IRS requires payments made with a credit or debit card to be reported by merchants who processed more than $20,000 and 200 transactions.
The program, initiated by the Housing and Economic Recovery Act of 2008, aims to generate $10 billion in revenue over 10 years, although estimates have varied widely. The goal is to assist the IRS in matching income from sales to income reported on tax returns. The law requires backup withholding, in the case of merchants who do not provide a valid Taxpayer Identification Number and name that match IRS records.
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