In what has to be the best news I have heard in a long time, it appears that the IRS is no longer going to pursue separate reporting of credit card gross receipts from “other” gross receipts.
As everyone in business should know by now, for 2011 the IRS was to begin mandating that all business entities separately report credit card gross receipts from other gross receipts. This created a huge administrative scare, particularly in the small business area, as this would require considerable additional administrative work in order to comply. The IRS backed away from this for 2011, but the issue was expected to reappear for 2012.
We read with confusion the most recent Kiplinger Tax Letter, which appeared to allude to the “repeal,” but the language could have been better. Well, we reached out to the wonderful Joy Taylor, tax editor at Kiplinger, and she was kind enough to forward the letter we are attaching. This letter, from Steven Miller, head of Large and Mid Size Business Division of the IRS, to Susan Eckerly of the National Federation of Independent Business, says it all.
In short, it appears that the tax forms will revert back to the 2010 style, and will no longer ask for separation of gross receipts from credit cards.
Now, is this a big “win?” Not really. They are not stopping the requirement that credit card companies issue 1099K’s, which report credit card gross receipts. So big brother still gets the information they need, when you think about it. But it’s nice to see that our friends at the IRS recognize from time to time the tremendous administrative burdens placed on businesses for proper tax compliance.
Thank you, Joy!!!!