Online Sellers Begin Complying with More Stringent IRS Rules
March 28, 2011
As online sellers prepare for the next federal tax cycle, they can look forward to much closer scrutiny of their transactional information.
That’s because a sweeping new reporting mandate will take effect for the 2011 tax year, requiring payment-services providers to submit month-by-month transaction totals for individual merchants to the IRS through the new 1099-K form.[…]
The IRS set a minimum threshold, requiring payment-service providers to submit the 1099-K form only for merchants with 200 or more transactions in a year that totaled at least $20,000. Both conditions must be met to trigger the reporting requirement.
Google and PayPal have updated their terms of service, and others are likely to follow soon.