Posts Tagged ‘credit card’

Proposed IRS regulations address reporting requirements for credit card and third-party network transactions (IR-2009-106; NPRM REG-139255-08). The IRS plans to require credit card and other firms that process transactions to report the annual gross network transactions to participating merchants and to the IRS.

Information reporting will begin to apply to 2011 transactions. Form 1099-K has been proposed for this purpose and is now available in draft form. Form 1099-K will be prepared for each calendar year and report the gross amount of transactions for the year and for each month of the year. The inclusion of monthly amounts on the return filed with the IRS and the copy furnished to the payee will help fiscal-year payees reconcile payment card and third-party network transaction receipts.

The gross amount of a transaction is not reduced by fees, charge backs, refunds, or any other amount. The IRS will use the reports as it does W-2s and 1099s. A company reporting gross receipts different from those in these reports can be subjected to auditing to explain the differences.

Santa Claus may not be watching you. But the Credit Card companies are.

Credit card companies are profiling you and certain types of purchases can be red flags to the card companies that are looking for signs of consumers with questionable finances.

Not too long ago, the Federal Trade Commission filed a suit against CompuCredit, which marketed the Visa Aspire card. Reilly Dolan was on the FTC’s litigation team. Mr. Dolan says, “Compucredit was reviewing how consumers used the credit card, and it would lower the available credit to consumers based on their transactional history.”