New IRS Regulations Impacting U.S. Bank Voyager® Network and Multi Service Aviation Merchants
The Housing and Economic Recovery Act of 2008 and Section 6050W includes new federal regulations that require "merchant acquiring entities" to report gross amounts of their merchant customers' electronic payment transactions including credit card to the IRS.
These new requirements apply to transactions dating to January 1, 2011
and mandate the reporting begin in 2012.
As a result of this new legislation, U.S. Bank is required to collect and verify the following information for each merchant:
- Your Taxpayer Identification Number (TIN)
- Your Legal Business Name
- Your Legal Business Address
- Your Business Organization Type (i.e. Corporation, LLC, Partnership, Sole Proprietor etc…)
U.S. Bank Voyager Fleet Systems and Multi Service Aviation are merchant acquiring entities (banks or organizations under contract to make payment to merchants in settlement of payment card transactions). U.S. Bank has proactively reached out to all merchants that have mis-matched information based on what the IRS has on record. If you have been notified or think you may been notified, that your TIN or Legal Business name does not match IRS records, you must provide U.S. Bank with a Form W-9.
- U.S Bank must collect and verify your TIN and associated legal name and address for your merchant business
- Beginning in the 2011 tax year, U.S. Bank is responsible for collecting your total annual gross dollar amount of payment card transactions to report to the IRS in 2012
- In 2012, U.S. Bank must file a Form 1099-k information return with the IRS and provide a copy to you for the 2011 tax year
- Beginning in 2013, if your TIN/ legal business name combination that was provided to U.S. Bank does not match the information on file with the IRS, you will be subjected to IRS mandated backup withholdings.
Matching TIN and Legal Business Requirements
Please be advised that the TIN - which is either your Employer Identification Number or Social Security Number and / or Legal Business Name that U.S. Bank has on file for your business must match IRS records. If you fail to provide U.S. Bank with your TIN or if there is a discrepancy between your TIN and the legal business name in U.S. Bank's records, you will be subjected to an IRS mandated 28% of your daily settlement payments deposited with the IRS as backup withholding. This withholding provision goes into effect for transactions starting in 2013 (this is a change from previous IRS rulings that indicated that this would apply to transactions beginning on January 1, 2011).
TIN Matching Process
The acronym for Tax Identification Number, TIN, is a generic term to refer to a business' Employer Identification Number (EIN) or the business owner's Social Security Number (SSN). If you are notified that your TIN or legal business name in U.S. Bank's records does not match the IRS' records, you must provide U.S. Bank with a Form W-9.
- You must ensure that the TIN/name combination that was provided to U.S. Bank for Voyager fleet card and Multi Service Aviation card transactions matches the information on file with the IRS
- When you receive a copy of the information return filed by U.S. Bank annually, you should compare that information with your own records to validate the accuracy of the information
The US tax authority, the IRS (Internal Revenue Service), requires foreign persons and entities to pay tax on income received from US sources (including settlement of payment cards) unless certain conditions are met. This tax is imposed on the gross amount and is generally collected by the withholding agent (U.S. Bank).
A payment is considered to have been made whether it is made directly to the beneficial owner or to another person, such as an intermediary agent, or partnership, for the benefit of the owner. The W-8BEN and W-8IMY forms are used by non-U.S. persons or entities to establish that taxes should not be withheld, or should be withheld at reduced rates.
W-8BEN Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding
Who Must File: You must provide form W-8BEN to U.S. Bank if you are a non US person and you are the beneficial owner of an amount subject to withholding to:
- Establish that you are not a US person;
- Confirm that you are the beneficial owner of the income for which form W-8BEN is being provided or a partner in a partnership; and
- If applicable, claim a reduced rate of, or exemption from, withholding as a resident of a foreign country with which the US has an income tax treaty
W-8IMY Certification of Foreign Intermediary, Foreign Flow-Through Entity,
or certain US branches for United States Tax Withholding
You are required to provide Form W-8IMY to:
- confirm that you are the Intermediary/ Partnership
- establish that you are not a US person
Who must file: You must provide Form W-8IMY to U.S. Bank to document you are not a US
person/partnership/intermediary receiving the payment on behalf of your partners together with the following:
- allocation of ownership ( % owned by each partner in the partnership)
- Form W-8BEN for each partner in the partnership to document that partner is not a US person. Form W-9 for any partner that is a US person.
- If you do not provide this documentation, U.S Bank may have to withhold at the 30% backup withholding rate, or other applicable rate.
For more information on W-8BEN or W-8IMY Forms visit: www.irs.gov
Contact & Forms Information
Voyager Teletrans Merchants
may view or print payment transactions online at www.merchantcommanderonline.com
. If you aren't already using Merchant Commander Online
you may self-enroll by following the instruction at the welcome page. All you need for enrollment is your telephone number and your Tax Identification Number (TIN).
may email questions regarding your 1099-K statement to firstname.lastname@example.org
or call 800-346-7301. Please include your Merchant ID, contact information and your question when sending an email.
If you have questions regarding the 1099-k form information you receive from U.S. Bank please use the following options:
W-9 or W-8 Form Changes
- If you are a Voyager Network TeleTrans Merchant you can access Merchant Commander Online to review your transaction information
- All other merchants can contact the Merchant IRS at 800-346-7301
If your business changes its Legal Business Name /TIN or Social Security Number please send a new W-9 or if required
a W-8 form to our Customer Service Center. All W-9 and W-8 forms are stored at U.S. Bank.
||PO Box 12410
Overland Park, KS. 66282-2410
Attn: Merchant IRS Center
IRS Frequently Asked Questions
What is the IRS code section 6050W?
Section 6050W was added to the Internal Revenue Code by the Housing Assistance Act of 2008. It requires companies that settle credit card (payment card) purchases on behalf of merchants to report the gross amount of those transactions to the IRS. Another component of the legislation requires U.S. Bank to obtain and include on the reporting form the merchant's Legal Business Name and Taxpayer Identification Number (TIN). The Legal Business name and TIN must match exactly what is on file with the IRS.
When did the Section 6050W go into effect?
Section 6050W covers payment card purchases by merchants beginning January 1st, 2011. Any transactions prior to this date are not covered by this legislation and will not be reported by us to the IRS.
How is the information sent to the IRS?
By mid-March 2012, U.S. Bank will send each merchant for whom it settles payment card transactions a form 1099 for sales completed in 2011. Shortly after that, a copy of the information will be sent to the IRS. The form will show the gross sales completed for the year, as well as the monthly total.
Who is exempt from the 1099-k reporting?
Nobody. All entities that accept U.S. Bank Voyager fleet cards or Multi Service Aviation cards will have transactions reported on a form 1099-k.
Are there any minimal thresholds to receive a 1099-k form?
No, Any merchant where we settle at least one card transaction during a calendar year will receive a 1099-k form from us.
What information does U.S. Bank need from our merchants as a result of this legislation?
U.S. Bank has submitted legal business names and TINS of our existing merchants to the IRS for verification. The IRS will only tell us in response whether or not our information agrees with its records. When the information doesn't agree the IRS will do nothing to correct our data and we must contact the merchants to resolve the problem. U.S. Bank is only soliciting this information from merchants whose records we have not been able to validate with the IRS. U.S. Bank will request a merchant to complete a form W-9.
If you believe the information we have on file for you is correct, you need to contact the IRS or Social Security Administration to identify the cause of the discrepancy. Please be sure to notify us if there are any changes in either your name or your TIN that should be used for IRS reporting.
What happens if my records don't match the IRS records?
Beginning in 2013, if your name and TIN are not matched by the IRS, U.S. Bank may be required to back-up withhold federal tax on the gross amount of transactions we settle for your business. The federal rate is currently 28%. U.S. Bank is legally bound to deposit these withheld funds directly to the IRS and we will not be able to issue any refunds. Any refunds will be handled by the IRS after filling your income tax return.
What assistance with U.S. Bank provide with my tax return?
Although U.S. Bank is committed to helping you understand this new tax law, we are not qualified to assist you with specific tax guidance. Please contact a tax professional or the IRS.