[DeTomaso] FYI IRS and Paypal

[Curt Hall]

BIG brother once again.

--- On Mon, 3/8/10, Larry - Ohio Time Corp <larry at ohiotimecorp.com> wrote:


From: Larry - Ohio Time Corp <larry at ohiotimecorp.com>
Subject: [DeTomaso] FYI IRS and Paypal
To: detomaso at realbig.com
Date: Monday, March 8, 2010, 7:09 AM


We were just talking about this a few weeks ago. New 1099K is coming next
year.



Larry (%$&*&%^) - Cleveland






IRS Form 1099-K


IRS Form 1099-K ensures that small business owners who don't declare all of
the revenues they receive via credit cards, debit cards, gift cards and
services like Paypal will no longer be able to hide those revenues from the
IRS.

In the years to come, IRS scrutiny will be more intense for small businesses
and entrepreneurs that accept credit cards, debit cards, gift cards, Paypal
or similar electronic payments. 
Historically, the revenues that small businesses receive through these
payment processors have not been readily visible to the
<http://www.gaebler.com/IRS-Form-1099-K.htm> IRS.

That's going to change starting in 2011.

Starting in 2011, the gross amount of payment card and third-party network
transactions will be recorded on a new IRS form, form 1099-K.

In rolling out the new 1099-K form, the IRS is attempting to improve
voluntary tax compliance by business taxpayers.

Currently, the tax system is more of an honor system than most might like to
admit. Without visibility into a small business'
<http://www.gaebler.com/IRS-Form-1099-K.htm> credit card revenues, the IRS
must take the business owners word that they are reporting all taxable
revenues.

In lieu of the IRS having access to information about credit card revenues
and other electronic payment processing revenues, the IRS only has one tool
to combat tax cheats who underreport revenues: an IRS audit. However, this
is not a foolproof system because it requires scarce human resources to
conduct a thorough IRS audit.

"Time and time again, we have seen that better information reporting helps
the tax system work better by ensuring that everyone pays what they owe,"
said IRS Commissioner Doug Shulman. 

On the IRS website, you can view a draft version of new Form 1099K
<http://www.irs.gov/pub/irs-dft/f1099k--dft.pdf> , Merchant Card and
Third-Party  <http://www.gaebler.com/IRS-Form-1099-K.htm> Payments, which
will be used to make these reports.







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