MasterCard Applying to Become IRS Qualified Payment Card Agent

Tuesday 8 March 2005 00:01 CET | News

MasterCard International is applying to become an Internal Revenue Service (IRS) Qualified Payment Card Agent (QPCA).

As the number of business payments being made by credit cards continues to grow, this status will help MasterCards commercial customers and cardholders streamline the annual 1099 filing process. Once approved as a QPCA, MasterCard will be authorized by the IRS to gather relevant merchant information on behalf of participating financial institutions corporate card customers, validate the accuracy of key data elements with the IRS and report the results. Why is a QPCA needed? The IRS requires a corporate cardholder (i.e., a taxpayer) making payments of $600 or more in a calendar year to certain merchants (mainly unincorporated) for specific types of purchases (including services) to file a Form 1099 with the IRS and the merchant. The document must include the correct merchant name and Taxpayer Identification Number (TIN). If the information return is filed with a merchant name and TIN that do not match IRS records (or is missing), a penalty may be assessed to the cardholder and backup withholding may apply to merchant payments. With monitoring and imposition of penalties for inaccurate data recently increased by the IRS, MasterCards new QPCA service will alleviate the increased administrative and financial burden placed on corporations and will result in more streamlined annual 1099 tax filing processes. How can corporations access MasterCards new service? Corporations should contact their MasterCard corporate card issuer for more information on the service. In order to opt in, they will need to sign an authorization statement that seeks their permission to allow MasterCard to solicit merchant TIN information on their behalf. They would also be required to maintain the confidentiality of the merchant data provided to them through the QPCA program.

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Categories: Payments & Commerce | Payments General
Countries: World
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Payments & Commerce