March Newsletter Regulatory Accounting Assistance Program (RAAP)

In response to government regulations and the needs of our merchants, in 2012, our company developed and released the RAAP program.  Since implementation, this program has provided a seamless reporting tool for our merchants.

RAAP is an online, web-based portal  integrated with NPC’s existing web

reporting (www.MyNPCData.net) that provides merchants with tax reconciliation and reporting services.  Our merchants have the ability to view, print and download existing payment accounting data and compare that against gross payments – now required to be reported to the IRS.  RAAP has saved both time and money doing quarterly tax estimates and annual returns.

With these new IRS rules in effect, I have seen other processors charge as much as $9.99 per month for “Regulatory Compliance” or “Government Administrative Reporting” without providing any enhanced reporting or products to assist their merchants with the accounting of Gross to Net Sales.  Our program is competitively priced with the annual fee due in March.  NPC is not charging any merchant for the 1099-K statement.   

Here is an overview of the new rules.  Be aware the IRS keeps changing what needs to be reported so that is the other reason RAAP is so helpful.  It evolves to give you what you need.   

Enhanced RAAP Reporting

Regardless of a merchant’s income tax filing form (i.e. Form 1120S for S Corporations, 1120 for Corporations, 1065 for Partnerships or Limited Liability Companies, or 1040 Schedule C for Sole Proprietorships), the information that will be contained in the merchant’s 1099-K is critical. © Copyright 2012 NPC, a Vantiv Company. All rights reserved.

Box 1 of the 1099-K will contain the

Gross Sales Amount of the merchant’s card/third party network payments for the entire calendar year and for each month separately.  If a merchant accepts American Express (“Amex”) cards, then Amex will send the merchant a separate 1099-K. If the merchant’s business is typical of most businesses, the merchant will issue credits or returns to their customers’ cards occasionally, and in many instances, may experience chargebacks. This will cause theGross Amount reported to the merchant on the 1099-K to be different than the Net Amount of card transactions settled to the merchant.

Determining the Gross vs. Net Amount can be an accounting challenge for many merchants and their tax preparers, both for filing of quarterly tax estimates and Year End tax returns. Accounting for and reconciling the Gross card transactions to Net amounts will be more important than ever.  

NPC cannot and is not providing tax, legal or other professional advice, and NPC is encouraging all merchants to consult their tax or legal advisors about the IRS regulations and their filing obligations. However, the RAAP tool and reporting services will provide the merchant and its tax preparer with easy access to information that is critical to helping the merchant comply.