Section 6050W of the IRS Code requires reporting of payment card and third party network transactions to the IRS for all merchants. All reporting entities such as TransFund are required to file an annual information return with the IRS and provide each merchant with a Form 1099-K, reporting monthly and annual gross sales.
Merchants must provide their payment processor with the full legal name of their businesses, their addresses, and their taxpayer identification numbers so financial institutions can report credit card and debit card receipts. For most businesses, the taxpayer identification number would be their employer identification number or EIN. Payment processors might ask businesses to provide them with Forms W-9 so they can obtain this information.
Section 6050W also requires card payment service providers to begin backup withholding at a rate of 28 percent if (a) the merchant fails to provide their Tax Identification Number (TIN) to the reporting entity, or (b) the IRS notifies the reporting entity that the TIN (when matched with the name) is incorrect.