IRS is beginning to issue notices to small business taxpayers based on information reported on Form 1099-K

Private Company Services Tax Insight

The IRS is beginning to use information reported on Form 1099-K, Payment Card and Third-Party Network Transactions, received from credit card companies and certain third party network organizations (e.g., online payment companies), to identify under-reporting of gross receipts on previously filed tax returns. If the IRS believes a taxpayer has under-reported gross receipts, a notice may be issued requesting additional information. Taxpayers that receive a notice related to Form 1099-K should determine how best to respond by reviewing the information for accuracy and then consulting with their tax advisor. A prompt and appropriate response to the notice may help reduce future correspondence.

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