SECTION 2. SIGNIFICANT CHANGES

The requirements a payment card organization must meet to obtain and retain a QPCA determination are modified as follows:

.01 The written notices that the payment card organization must provide to cardholder/payors and merchant/payees may be mailed (the only option described in Rev. Proc. 2004–42) or furnished electronically. If a notice is furnished electronically, a notification that important tax and privacy information is being provided must be included on the subject line of the

electronic communication through which the notice is furnished.

.02 The written notices provided to merchant/payees will no longer be required to inform merchant/payees that they will be treated as participants in the QPCA program if they continue to accept the organization’s payment card. Instead, the notice must inform merchant/payees that they may opt out of the QPCA program by completing and returning a written statement to the payment card organization and that they may continue to accept the organization’s payment card even if they opt out of the QPCA program.

.03 The reporting requirements are modified to reflect the fact that a QPCA’s payment card may be accepted by merchant/payees that have opted out of the QPCA program (nonparticipating merchant/payees). Although QPCAs do not act on behalf of nonparticipating payees in furnishing payee data to cardholders, the QPCA is required to furnish certain information to cardholders that use the QPCA’s card to make reportable payments to nonparticipating payees. Specifically, the QPCA is required to inform the cardholder that the payee is not a participant in the QPCA program and is not a qualified payee. In addition, the QPCA must advise the cardholder/payor of the cardholder/payor’s obligation to solicit the name and TIN of a nonparticipating merchant/payee to which it makes a reportable payment.

.04 The reporting requirements are also modified to provide specific authority for furnishing the merchant/payee data report electronically, including by posting on a secure website. Electronic reporting is permitted only if both the cardholder/payor and merchant/payee consent by returning the consent form included with the written notice provided by the QPCA.

SECTION 3 . BACKGROUND

.01 Payment card transactions . A payment card transaction is a transaction in which a cardholder/payor uses a payment card (as defined in section 5.05 of this revenue procedure) to purchase goods or services and a merchant agrees to accept the payment card as a means of obtaining payment. A payment card organization (as defined in section 5.06 of this revenue proce

2007–30 I.R.B. 136 July 23, 2007

payment card organization acts through a member, affiliate, or licensee, the action is treated for purposes of this revenue procedure (including this definition) as an action by a payment card organization.

.07 Qualified Payment Card Agent (QPCA) . A QPCA is a payment card organization that has a current QPCA determination from the IRS. A person acting in its capacity as a QPCA does not act as an agent of the IRS, nor does it have the authority to hold itself out as an agent of the IRS.