The IRS issues a series of notices providing interim guidance regarding the implementation of information reporting obligations under Section 6050W

The Housing Assistance Tax Act of 2008 added Section 6050W to the Internal Revenue Code ("the Code") which requires annual information returns to be filed by merchant acquiring entities and third-party settlement organizations (referred to collectively as Payment Settlement Entities (PSEs)) to report payments made in settlement of payment card (i.e., credit, debit, etc.) transactions and third-party network transactions for calendar years beginning after December 31, 2010.

Although the Treasury Department and IRS had published final regulations in August of 2010 to assist PSEs in the reporting of such transactions, the IRS recently issued a series of separate Notices which respond to comments received on the final regulations and provide:

• Relaxation in the Documentation Requirements for U.S. Payors Making Payment Outside the United States to an Offshore Account
• Relief to Insurance Companies that Administer Certain Insurance Arrangements
• Postponement of Backup Withholding Requirement for Payment Card and Third Party Network Payments
• Transitional Penalty Relief for information returns and payee statements to be filed for payments made in calendar year 2011 on Payment Card and Third Party Network Transactions.

PSEs may rely on the interim guidance provided in the notice until the regulations are amended.