Payment processors, including PayPal, will submit payments you made to vendors using their services to both the merchant (you) and the IRS, on the new 2011 Form 1099-K. If you have not submitted your tax identification number (TIN) to the merchant service processor, you could be subject to 28% backup withholding tax. IRS has delayed the backup withholding to 2013, so that processors can set up their systems. During 2012, be sure that you provide your card processors with your company’s TIN. Submission of a W-9 form will protect you from this backup withholding requirement.
If you need more information, or a copy of the W-9 form with instructions, please contact us.
Visit Us!