ETA Raises Concern Over IRS Reporting Provision - Electronic Transactions Association

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ETA Raises Concern Over IRS Reporting Provision

The Electronic Transactions Association has expressed concern over a provision in the White House fiscal 2008 budget that would require merchant acquiring banks to report aggregate credit and debit card reimbursements made to merchants.

In a letter to the House Ways and Means Subcommittee on Oversight, which recently held hearings on the budget proposal, ETA urged committee members to carefully "consider the effect the new reporting requirement would have on merchant acquiring banks, small businesses, and individual consumers.
ETA expressed support for efforts to increase tax compliance, but noted that the reporting requirement for merchant acquirers was vague and might prevent the IRS from getting accurate information. ETA also suggested that estimates of the increase in revenue from the proposal may be significantly overstated.

ETA also warned the subcommittee that even if the proposal were made more specific, the cost of generating the huge amounts of data sought by the IRS would be a burden on payments industry that would get passed down to merchants and ultimately to consumers. This in turn might decrease the number of merchants willing to accept credit and debit cards.

To read the full letter to the House Ways and Means Subcommittee on Oversight, click here.

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