If we do not have a valid TIN/EIN by December 31, 2012, then we will be required to perform backup withholding from our merchant's funding by deducting and withholding income tax from reportable transactions. The original requirement dictated that processors perform this function as of December 31, 2011, but the IRS has extended the timeframe until December 31, 2012. To avoid potential back withholding, we encourage you to update your information at your earliest convenience.
This is already known. In fact, on an old merchant account I had that I ended up closing, they were going to do backup withholding regardless, unless I signed into a special portal and certified that I was not subject to backup withholding.
Bottom line? Companies don't want to be blamed for their user's tax mishaps. These rules will be enforced vigorously when the time comes; make no mistake about it!
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