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How will IRS charge receipt reporting impact my business?

By John Marshall

Buried in the Housing Assistance Tax Act of 2008 is a revenue provision requiring card processors to report credit card settlement amounts to the IRS. 

This could be a real breakthrough for the IRS in terms of automated auditing.  First any operator that should be filing an 8027 and isn't, now can be identified automatically.  Second, operators that have understated charged recipts are vulnerable.  Third, it doesn't take a rocket scientist to figure out what amount of charged tips should be reported on an 8027 once charged receipts are known!

Mr. Marshall is the owner of Main Street Gourmet Eatery and Bakery, Main Street Fine Catering, and Main Street Euro-American Bistro and Bar. He is president of GrataSoft Solutions, developer and publisher of Grata Restrateur and Grata Persona; patent pending solutions for implementing, tracking and managing tip policy, including IRS TRAC, TRDA and EmTRAC Tip Program compliance automation for businesses and individuals. For more information, please visit GrataSoft.com.

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