Many businesses became subject to new payment card reporting requirements (Form 1099-K) in early 2012 for payments made in 2011. Starting on January 1, 2013, those businesses will become subject to new backup withholding requirements and potential penalties for incorrect filing of Forms 1099-K.

The purpose of the new rules was to improve tax compliance among merchants that accept payment through payment cards (such as credit cards) and third party settlement organizations (such as PayPal or Google Wallet). These rules impact both the merchants that receive the Forms 1099-K as well as the payors (including merchant banks and settlement organizations) that have to issue the Forms 1099-K.Continue Reading Relief for Payment Card Reporting Set to Expire Soon