Is The New 1099-K “IRS Reporting Fee” Justified?
As 2011 comes to a close, and credit card processors scramble to get their 1099-K documents filed, some of them are trying to recoup their administrative costs by passing on a fee to the merchant (You). Some are even using this opportunity to profit off of these regulatory requirements, charging as much as $3.95 per merchant per month.
You may have already noticed the charge in your monthly statement, which can come under a few different names, including:
- IRS Reporting Fee
- IRS Filing Fee
- IRS Regulatory Fee
- IRS Non-Compliance Fee
- Regulatory Product Fee
- TIN/TFN Non-Compliance Fee
- TIN/TFN Invalid Fee
- TIN/TFN Blank Fee
Just when you thought you’d had enough with these additional fees, they go and add a new one. Well, it seems that some people, including the IRS, don’t feel like this fee is justified or even allowed.
A recent article in The Green Sheet explains…
Some of the biggest payment processors in the United States are assessing new merchant fees related to compliance with section 6050W of the Internal Revenue Code (IRC). However, the Internal Revenue Service indicated charging merchants for production or verification of taxpayer identification numbers (TINs) and business names, or for processing and filing 1099-K forms, is not allowed.
It doesn’t seem like the processors are listening though.
If you’re getting charged any of the above fees, you may want to email your processor a link to this article along with a “WTF?”