Your lawmakers are considering implementing a provision that would increase regulatory and compliance costs on small business. The proposal creates a brand new IRS information reporting requirements that would require credit card and debit card companies as well as banks and financial institutions to report to the IRS each year your total credit card, debit card and electronic payment transactions. 

These companies would be required to verify your taxpayer identification number. If they are unable to do so, the credit/debit card company will withhold 28 percent of your total sales and send it to the IRS until accurate information is provided. Once your information is verified, they will be required to send a form to the IRS and to you, the business owner, reporting your total transactions for the year. The return will include the name and address of each participating merchant that was reimbursed over the previous year for electronic payment and the amount of each payment. Each small business--You--will be responsible for accurately accounting for these transactions on your tax returns. 

The Senate Finance Committee is seeking small-business comments on how this payment reporting may affect the tax gap, as well as to determine whether increased reporting requirements would unfairly burden merchant businesses or banks. Your input is crucial.

What are your concerns with this proposal? How might it affect your business? Share your perspective on this proposal with NSBA and help us educate your legislators.