Feds Issue New Reporting Rules for Lawyers and Merchants Accepting Credit Cards
Many lawyers offer their clients the convenience of paying by credit card. The Feds have just instituted new reporting rules (available here) on such paymnts.
The IRS has implemented new compliance requirements through Internal Revenue Code Section 6050W that will affect all merchants (including government and non-profit entities). Beginning in calendar year 2011, all merchants will be required to report gross payments received through debit or credit card transactions to the IRS on an annual basis. To verify this reporting, banks and merchant service providers will be required to provide both merchants and the IRS with Form 1099-K by January of 2012.
From now on, your merchant name on your credit account at the bank must match your legal name on your tax ID number. Banks will be instituting compliance measures to check.
Here are the final regulations.
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