This is the time of year that credit card processors notify merchants for whom they do not have correct Taxpayer Identification Numbers (TIN) on file. Should you receive such a notice it is vitally important to your business that you contact your processor immediately.
As I covered in this post last year, http://brswitzer.blogspot.com/2012/08/tax-identification-numbers-and-your.html, having an incorrect TIN on file with your processor results in backup withholding, whereby the processor withholds 28 percent of all your credit card volume by order of the IRS. Fixing the TIN after withholding starts doesn't help- it will not end until you file a tax return and the IRS determines you are eligible for a refund.
In September and October the IRS requires processors to send "B" notices to affected merchants listing the steps they need to take to update their account information. The "B" notice will include a Form W-9. The Processing company has just 30 days from when they are notified by the IRS to get a corrected W-9 back from the merchants, after which they are forced to start backup withholding.
You should always read any communication from your processing company, but it's especially important during these two months of the year. If you receive notice that your TIN is invalid or doesn't match what's on file with your processor, contact them and update your account immediately.
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