Foodservice Equipment Reports

IRS Withdraws Third-Party Reconciliation Requirement

The Internal Revenue Service has pulled back from a plan that would have required businesses to reconcile the total receipts they report on their business income-tax forms with the amounts that third parties, such as credit card companies, report paying to merchants to settle merchant-card transactions.

The IRS announced the change Feb. 10 in Frequently Asked Questions posted on the agency's website. The change comes a few days after the National Restaurant Association and other small business groups met with the agency to discuss concerns about the way the IRS proposed implementing a 2008 law that steps up reporting requirements for third-party payers.

The law originally required the third-party reporting to take effect for payments made after Dec. 31, 2011. After business groups said the proposed reconciliation mandate would create huge paperwork burdens for businesses, the IRS in October postponed the requirement by a year. Now it appears that requirement has been abandoned.

"There will be no reconciliation required on the 2012 Form 1099-K, nor do we intend to require reconciliation in future years," the IRS said.

Operators and other businesses will continue to receive the 1099-Ks from their third-party payers; the IRS only withdrew the reconciliation requirement.

Several members of Congress had introduced bills to prevent the agency from moving ahead with its proposed mandate for reconciliation.

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