New IRS regs for lawyers accepting credit or debit cards

This can be a major problem for lawyers accepting credit cards. If the IRS data and merchant account are not an exact match, there may be a 28% withholding penalty and if the funds were headed into your IOLTA account, then there may be ethical issues.

“Section 6050W was added to the Tax Code in January 2012, requiring credit card processing companies to verify and match your federal tax identification number and legal name on your merchant account to IRS records (“Form 1099-K”). An EXACT match is required. If you have either abbreviated your name or used an acronym for your merchant account, you will need to contact your credit card processor to assure that your legal name on your merchant account exactly matches the legal name you use to file your tax returns.”

via Accept credit card payments? Beware this new IRS reg | Illinois Lawyer Now.