Under The Radar- New Merchant Rule Tacked On To Foreclosure Prevention Act Of 2008
As if Joe the plumber and every other small business owner out there today isn't struggling enough to comply with the massive number of rules, regulations, and requirements imposed on them by the bureaucrats in Washington, their plight now just got worse. Under the disguise of a little-noticed provision in the $700 billion dollar bailout plan, also known as the "Foreclosure Prevention Act of 2008", and recently passed by our Congress, our friendly IRS has decided to require yet another new form be filed beginning in 2011.
Any merchant accepting credit or debit card payments in excess of $20,000 in aggregate or either 200 transactions per year, will now be required to report their total payment card transaction volumes annually to the IRS. The IRS hopes that this new reporting compliance will cut down on all the suspected widespread underreporting of income by businesses and raise an additional $9.8 billion in tax revenues for the Treasury over the next ten years. While the language in the bill regarding this new reporting requirement is vague and still subject to interpretation and challenge, the small business owner can ultimately expect to be left holding the short end of rope once again.
Major privacy concerns are being raised as well by many small business advocacy groups, card processors, and privacy advocacy groups as to how this data will be stored, can the databases be protected from hackers, and what quantity and from of data will have to be maintained and by whom in case of an audit. These concerns will only lead to additional costs for the merchants who may be forced to pass these costs on to the consumer or discontinue accepting electronic payments all together.
Where does the paperwork madness end for the small business owner? How can the consumer possibly benefit from this new reporting requirement? Does any one in Washington really care that special interests have once again tacked unrelated items onto major legislation? Seems like the status quo continues in DC.