TPSO

Today, in Notice 2023-10, the IRS announced a delay in the new reduced reporting threshold for section 6050W applicable to third-party settlement organizations (TPSOs).  Section 9674(a) of the American Rescue Plan Act of 2021 amended section 6050W(e) to provide that, for returns for calendar years beginning after December 31, 2021, a TPSO is required to report payments in settlement of third party network transactions with respect to any participating payee that exceed a minimum threshold of $600 in aggregate payments, regardless of the aggregate number of such transactions.  Prior to the change, the threshold was $20,000 and 200 transactions. Continue Reading IRS Publishes Last Minute Reprieve for Implementation of New Form 1099-K Reporting Threshold

On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (the “ARPA”) into law.  The ARPA includes clarifying language regarding the scope of Form 1099-K (Payment Card and Third Party Network Transactions) reporting for third party payment networks and a change to the de minimis reporting standard applicable to third party settlement organizations (“TPSOs”) effective for returns required to be filed for 2022.
Continue Reading American Rescue Plan Act Clarifies Scope of Form 1099-K Reporting and Reduces De Minimis Threshold

For the second time in the past year, the IRS Office of Chief Counsel issued a ruling addressing how transactions are counted for purposes of applying the de minimis threshold applicable to third party settlement organizations (“TPSOs”) under section 6050W.  In recently released PLR 201907006, the IRS considered the facts related to a payment processing service provided by a taxpayer to online sellers.  After considering the facts, the IRS ruled that the taxpayer was a TPSO.  The IRS then turned to the second ruling request, namely, whether the number of transactions for purposes of the de minimis rules are determined based upon the number of payments processed on behalf of payers rather than the number of times the customer receives payments from the TPSO through the taxpayer’s platform.  The IRS again determined that the number of transactions is determined by reference to the number of buy-sell transactions between buyers and sellers processed by the TPSO.
Continue Reading IRS Again Addresses De Minimis Standard for Third Party Network Transactions