No 1099-K Line on 2012 Business Returns

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It is now appearing that the IRS may be reversing the requirement for businesses to report separately on their tax returns, income that is received through merchant services, such as credit cards and Paypal, and reported on Form 1099-K.

Last October, the IRS had said that no return entry would be required for 2011 tax returns, although they left a line on tax returns saying “For 2011, enter 0.”  They had implied that the reporting requirement would begin in 2012.  However, Steven T. Miller, IRS deputy commissioner for services and enforcement, said in writing to the National Federation of Independent Business that no reconciliation will be required on 2012 or future business tax returns.

We have advised our clients to be accounting for this income separately beginning in 2012, but it now appears that this may be unnecessary.

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