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EcommerceBytes-NewsFlash, Number 2514 - April 05, 2011 - ISSN 1539-5065    2 of 3

IRS 1099-K Reporting Requirements Will Affect Amazon Sellers

By Kenneth Corbin
EcommerceBytes.com
April 05, 2011




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Like many other payment-service providers, Amazon.com will be subject to rigorous new IRS reporting requirements for the 2011 tax year that will directly impact its network of merchants, the company has confirmed.

The ecommerce giant has updated its "help page for sellers to outline the changes, which will require payment providers to submit a new 1099-K form detailing monthly transaction information for merchants that meet a minimum volume and revenue threshold.

In order to trigger the reporting requirement, merchants must execute at least 200 transactions in a year that add up to at least $20,000. Amazon and other payment providers will only submit 1099-K forms for sellers that meet both thresholds.

However, any sellers that use Amazon's payment services, regardless of their volume or revenue, must submit a taxpayer information number (TIN) to the company.

"As a result of the new regulations, sellers will be required to provide taxpayer identification information to Amazon in 2011. If the required information is not provided to Amazon in 2011, your Amazon selling privileges will be suspended until you provide the information," the company said.

Amazon spells out the information it will require from sellers in its Frequently Asked Questions section here.

That Amazon is affected by the new reporting requirements is not altogether a surprise. The rules, drafted in an effort to capture tax revenue on income that often went unreported, were written broadly to apply to traditional credit card companies, gift card and other value-stored card providers, and electronic payment processors such as PayPal.

Google recently confirmed to AuctionBytes that it, too, is affected, and will soon begin notifying Checkout users of the new requirements.

Amazon has already begun alerting merchants of the changes. Seller Steve Weber has posted the email he received from the company detailing the new 1099-K on his blog.

The IRS has posted the form on its website here, with details on the reporting requirements here.

The complete and final rules were published in the Federal Register in August.

About the Author
Kenneth Corbin is a freelance writer based in Washington, D.C. He has written on politics, technology and other subjects for more than four years, most recently as the Washington correspondent for InternetNews.com, covering Congress, the White House, the FCC and other regulatory affairs. He can be found on LinkedIn here .

About the author:

Kenneth Corbin is a freelance writer based in Washington, D.C. He has written on politics, technology and other subjects since 2007, most recently as the Washington correspondent for InternetNews.com, covering Congress, the White House, the FCC and other regulatory affairs. He can be found on LinkedIn here.

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