New Law Affecting Credit Cards May Hurt Lawyers
By accepting credit cards, your firm is considered a “merchant” under the Housing Assistance Tax Act of 2008. Guidelines from this Act coming into effect as of January 1, 2013, will require all merchants to have an EXACT match for their federal tax identification number (FTIN) and their legal name on file with the IRS.
You might have already been contacted by your credit card processing company to verify this information matches, and if you have ensured the names match you do not have to do anything further.
However, if you have not received this notice or have forgotten to ensure your names match EXACTLY, please do so by December 31, 2012, in order to avoid a withholding penalty of 28 percent for all credit card transactions where these names do not match.
Please note that the withholding penalty may come from credit card transactions that are to go into either your business account or trust account, and could potentially create a serious ethical concern for your practice. Please check your names today!