Categories: Form 147 C

IRS Section 6050W

Requirements of IRS Section 6050W for Business Owners

Merchant Tax Return Validation and TIN Matching

On January 1, 2013, requirements in the Housing Assistance Tax of 2008, which have been delayed for several years, became active. These requirements mean that business owners need to verify their business entity name and taxpayer identification number (either an employer identification number or social security number) and ensure that it matches what is on file with the IRS. If there is a mismatch, normally your credit card processing company will send you a notice. One of the problems with TIN validation and matching is that often a small difference in the entity name (like a misplaced period) could be grounds for a mismatch. The goal for 6050W is to ensure that the 1099K form that you get will match up with the information your bank or merchant services provider has on file as well as what the IRS has in its system. In the year 2013, people have started noticing issues with backup withholding even if they had offshore merchant accounts and other entities that did not necessarily process a majority of US credit cards. Some international processors were caught off guard, and their clients are now very angry or have switched. Naturally, processing companies have also gotten on board and found a new fee they can charge which gets written off to compliance.

Notes and Special Information

Special note: Compliance with this requirement is essential given the 28% backup withholding on all monies run through your credit card machine.

Latest news:

September 19, 2013:
Business searches for 6050w and Tin Validation terms increase as nervous business owners seek to verify data.

Foreign Withholding:

People with merchant accounts in foreign countries are seeing circumstances like 28% withholding on US credit cards and wondering why they need to validate if they do not primarily do business in US.

Published by

Recent Posts

Hamilton Beach 38540 Step Up Electric Skillet Review

An electric skillet is a must have kitchen appliance for home makers, especially those who… Read More

2 months ago

Oster CKSTSKFM05 16-Inch Electric Skillet Review

This is a terrific electric skillet from the good people at Oster. The Oster CKSTSKFM05… Read More

2 months ago

Presto Electric Skillet Reviews

Presto electric skillets are some of the best electric skillets in the world. They are… Read More

2 months ago

Presto 06852 16-Inch Electric Skillet Review

One of the must have appliances in your kitchen is the multi-purpose Presto 06852 16… Read More

2 months ago

Cuisinart CSK-250 GreenGourmet Electric Skillet Review

In today's review, we're going to be taking a look at the Cuisinart CSK-250 GreenGourmet… Read More

2 months ago

Cuisinart CSK-150 1500-Watt Electric Skillet Review

Many of us have grown up seeing our mothers using a skillet to cook a… Read More

2 months ago