June 15, 2009
I need to know about the IRS and merchant accounts?
Kinct1012 asked:
I have a merchant account in my name for a family member who for reasons to long to explain cannot get one in her name under her SS#. I have the business license, merchant account, and bank account in my name but I do not see a dime from the business (which does well over $350,000 a year). Will I someday get a knock on my door from the IRS if this family member does not pay the taxes? Am I responsible? Is this even legal?
I have a merchant account in my name for a family member who for reasons to long to explain cannot get one in her name under her SS#. I have the business license, merchant account, and bank account in my name but I do not see a dime from the business (which does well over $350,000 a year). Will I someday get a knock on my door from the IRS if this family member does not pay the taxes? Am I responsible? Is this even legal?
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Comments on I need to know about the IRS and merchant accounts?
Funny that you should ask.
One of the sections of the Housing rescue bill that Bush is expected to sign this week has a provision that the banks will start issuing the holder of record (you) a 109X form if transactions exceed $20,000.
Once these start being issued, you can get bet you will get mail asking why the money isn’t reported on any tax return that you sign off on.
As far as the IRS is concerned, this is YOUR account and YOUR money. You may be able to explain it away IF your family member properly reports ALL of the income, but why take the risk? (And as the business license is in your name, guess who will be sued if anything goes wrong with the business. Hint, it won’t be her!)
It’s time for her to sort out her banking issues herself and at that income level she should be able to afford whatever professional assistance that she needs to do so.