Possible Backup Withholding Issues

Merchants who fail to provide their taxpayer identification number could become subject to backup withholding at a rate of 28% on their payments. To prevent backup withholding, merchants should provide their card payment services provider with the name, address, and EIN for the business.
Another concern is that credit card transactions could become subject to backup withholding or garnishment if a business becomes delinquent on their tax payments. Since the withholding or garnishment would occur on gross card payments, this could leave a business in severe financial difficulties. Business owners who are struggling with tax debts should work with their tax professional to develop a repayment strategy that prevents any withholding on their card payments.