FREQUENTLY ASKED QUESTIONS
Tax Identification Number (TIN) Verification
This FAQ content provides merchants with additional information related to the verification of a merchant’s IRS (Internal Revenue Service) tax filing name and/or taxpayer identification number (TIN).
- Q: What is this TIN communication about and why did I receive it?
- A: “TIN” stands for taxpayer identification number.” There is a mandate – Section 6050W of the Internal Revenue Code – that states that merchants with unverified information or information that doesn’t match current IRS records are subject to a withholding of a percentage of the merchant’s credit card sales until the issue is corrected. You received a communication from us because the IRS has informed us that in your case the TIN and/or the legal name associated with your merchant account does not match IRS records. You may be subject to this withholding by the IRS until the information is corrected. Although we are not obligated to intervene, you are a valued XCharge® customer and we want to do all we can to help you avoid this withholding.
- Q: Why did I receive communications from a company called Convey? Who are they?
- A: Convey is a company we contracted with to assist in communicating with you about this matter and getting it resolved. Convey is a company with over 25 years of tax information reporting experience. You can find out more about them at www.convey.com.
- Q: How much will the IRS withhold?
- A: The current Federal withholding rate is 28% of your gross credit card sales, in addition to any applicable state withholding requirements. Any withholding will appear on your 1099-K form and any withheld amounts can only be refunded by the IRS after you file your Federal tax returns.
- Q: When will they start to withhold this percentage of my credit card sales?
- A: The IRS recently decided to delay the withholding one year - until at least August, 2014. Merchants are still urged to address the issue as soon as possible as those with unverified or incomplete information will continue to receive communications until their issue is resolved.
- Q: What information requires verification?
- A: Often, the error is as simple as a misplaced digit on a SSN or EIN or a misspelling on the Legal Name.
- Q: What do I need to do to correct this and avoid the withholding?
- A: Fill out the W-9 Request for Information form that accompanied your notice and fax it to us at (855) 204-8108. It is important to use the form that accompanied your notice as it includes your preprinted merchant ID number (MID).
- Q: What if I’ve sold my business or closed it?
- A: If there has been a change of ownership or you have closed your business and you have not notified us, you will not be able to use the form attached to your notice to provide us the necessary information. If you have sold or closed your business, please call (855) 256-7180 and your call will be appropriately routed.
- Where can I get additional information?
- A: If you have any questions about this communication or what you need to do to resolve the unverified information, you can call (855) 256-7180. Please note this call will be answered by Convey, who is prepared to answer your questions related to this initiative on our behalf. If you would like more information on the recent IRS decision delaying withholding, please visit http://www.electran.org/irs-rules-in-favor-of-eta-on-merchant-transaction-reporting/.