The relief provided by Notice 2013-56 is available for certain errors on
information returns and payee statements required to be filed or furnished in
2013, based on payments made in calendar year 2012, as well as certain returns
and statements that are required to be filed or furnished in 2014, based on
payments made in calendar year 2013, provided that the section 6050W filer
makes a good-faith effort to accurately file the appropriate information return
and the accompanying payee statement.
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 Congressman Presses IRS on Small
Business Notices of Possible Income Underreporting).
Notice 2013-56 will be published in
Internal Revenue Bulletin 2013-39 on Sept. 23, 2013.
Circular 230 Disclosure
Pursuant to the requirements of the Internal Revenue Service Circular 230, we inform you that, to the extent any advice relating to a Federal tax issue is contained in this communication, including in any attachments, it was not written or intended to be used, and cannot be used, for the purpose of (a) avoiding any tax related penalties that may be imposed on you or any other person under the Internal Revenue Code, or (b) promoting, marketing or recommending to another person any transaction or matter addressed in this communication
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