IRS TIN Mismatch

Stay Compliant with IRS Section 6050W Reporting through CynergyData Texas

In 2011, the IRS enacted Section 6050W under the Federal Housing Assistance Tax Act, requiring all merchant service providers to validate the legal name and Tax Identification Number (TIN) of every merchant and report their annual revenues to the IRS. As a merchant, it’s essential to stay compliant with this mandate to avoid penalties and tax withholdings on your earnings.

CynergyData Texas takes the burden of compliance off your shoulders by managing all aspects of this IRS reporting requirement. Our dedicated Regulatory Program ensures that your business remains compliant with minimal effort on your part, so you can focus on growing your business instead of worrying about tax issues.

What Does Section 6050W Require?
  • TIN Matching: We are required to submit your legal business name and tax ID number (TIN) to the IRS and ensure they match IRS records.
  • Annual Reporting: Every January, we must report all merchant payments processed through Visa, MasterCard, Discover, and third-party networks.
  • 1099-K Form: All merchants who accept electronic payments will receive a 1099-K form detailing their monthly and annual gross sales income for the prior year.
  • Tax Withholding: If a merchant’s TIN and legal name do not match IRS records, the IRS mandates that we withhold income tax (up to 31%) from their gross sales.
CynergyData Texas’s Comprehensive Regulatory Program

To help our merchants meet these requirements and avoid unnecessary penalties, we’ve created a streamlined Regulatory Program that ensures compliance with Section 6050W while minimizing disruptions to your operations.

Key Components of Our Regulatory Program:
  1. TIN Matching:
    • Every year, we submit your legal business name and tax ID number to the IRS for validation.
    • If there are unmatched records, you’ll receive a notification with clear instructions on how to correct the information. We give you a specific timeframe to update your details to avoid any fines or tax withholdings.
    • As soon as corrected TIN information is received, we will resubmit it to the IRS until the issue is resolved.
  2. IRS Reporting:
    • In January, CynergyData Texas will file an annual return with the IRS detailing all credit card and third-party network transactions processed on your behalf.
    • You’ll also receive a 1099-K form that reports your monthly and annual gross sales income for the previous calendar year.
  3. Penalty Avoidance:
    • Merchants with unmatched TINs are at risk of having taxes withheld (up to 31%) from their gross sales.
    • By ensuring your records match the IRS database, we help you avoid this withholding and maintain full access to your earnings.
Why Compliance Matters:

Staying compliant with IRS Section 6050W is critical for ensuring smooth tax reporting and avoiding hefty penalties. As a trusted partner, CynergyData Texas handles these complex reporting requirements for you, keeping your business in good standing with the IRS while allowing you to focus on day-to-day operations.

Have questions about IRS Section 6050W or need assistance with unmatched TINs?

Our CynergyData Texas Customer Care team is here to help. Contact us today to ensure your records are up to date and avoid unnecessary tax withholdings. We’ll walk you through the entire process and make sure you remain compliant.