Do merchant processors/iso's/etc notify irs of your deposits?

[teebo]

I was wondering if anyone knows if your credit card merchant providers and or the issuing bank notify the irs of your statements or issue any official forms year end with your total deposits and transaction amounts?

[piatkow]

Well as the relevant authority in my case would be HMR&C I should hope not.

[LifeinAsia]

Currently, if any daily transaction is more than $10,000 (e.g., if you charged more than that in one day), I think the bank has to report it when it hits your bank just like any other deposit of $10,000 or more.

However, the Housing Assistance Tax Act of 2008 (H.R. 3221) contains a provision that will require banks and merchant accounts to report all amounts to the IRS starting in 2011 (which I presume means that starting with tax year 2010, they will start issuing forms like 1099s).

So if you're not reporting your credit card processing receipts, you only have a few months left before you'll start getting caught. :)

[teebo]

yes i know about H.R. 3221, however the 10k reporting is only if you withdraw from a bank, not deposit.

[LifeinAsia]

however the 10k reporting is only if you withdraw from a bank, not deposit.

Wrong- "FinCEN Form 104 Currency Transaction Report (CTR): A CTR must be filed for each deposit, withdrawal, exchange of currency, or other payment or transfer, by, through or to a financial institution, which involves a transaction in currency of more than $10,000." (Bold added by me.)

[teebo]

That refers to cash transactions.

[LizaJane]

Your merchant account deposits your transactions into a bank account - correct? So, if audited by the IRS with a question towards validity of income ( or lack of income), they will likely want to see your bank accounts. By request, or by bank summons if need be. Personally I would never roll the IRS audit dice.

They say:
Two things in life are certain, death and taxes.
I say:
What is uncertain is which I fear most!

[bwnbwn]

Tied to one or 2 social security number or federal id number they don't need to see your bank account unless your gonna get an in audit. All income is reported to one or the other so the IRS knows what was deposited and my guess can get the records for verification from the bank if needed without your knowledge.

[MrHard]

It gets reported in one way or another. If not directly, then on their IRS returns, which of course needs to have your info. backing it up. Not difficult to cross match info. when everything is computerized.

[teebo]

I doubt they would put it on their return, your talking about millions of customers. The more I think about it I highly doubt the merchant/banks do this.

[rachel123]

If you are thinking of scamming the IRS then you are a fool.

BUT, I don't know if that is the reason for your question, so, NO, I don't think they report your deposits directly to the IRS as such. However, I am under the impression that they will be doing just that starting in 2010/11. Regardless of the millions of customers...it's just a db dump, I would think. There aren't that many merchant banks.

If you were to severely under-report now... when the IRS gets the deposit info for 2011...hmm. 2008 $0. 2009 $0. 2010 $0. 2011 - $542,000. If that doesn't scream, audit me! I don't know what does. They can audit several years back, and they aren't going to buy any 'calculation error' or 'honest mistake'.

[teebo]

No I asked the question because I wanted to double check the figures if they did report i want to make sure the #'s are accurate from the bank against mine as well as what they will send them.

[MrHard]

All you need to worry about is your end. If a bank makes an error it's on them, not you. If somethings not matching you can't cook your books and just enter the same numbers. That's gets into fraud which is worse then making an error and can lead to criminal penalties.