SECTION 5. DEFINITIONS — Internal Revenue Bulletin 2007-30

RELATED RULES

The following definitions and related rules apply solely for purposes of this revenue procedure:

.01 Cardholder . A cardholder (or cardholder/payor) is the person that agrees to make the payment through the payment card organization. Thus, in the case of a payment card issued to an employee of a person that agrees to make payments through the payment card organization, the employer rather than the employee is the cardholder/payor.

.02 Merchant . A merchant (or merchant/payee) is a person that has agreed to accept the payment card issued by the payment card organization as payment for goods and services.

.03 Merchant/payee data . Merchant/payee data includes the merchant/payee’s name, corporate status, and TIN, and whether the TIN has been validated through the IRS TIN Matching Program.

.04 Participating payee . A payee is a participating payee with respect to a reportable payment if—

(1) The written notice described in section 6.03(1)(c) of this revenue procedure was provided to the payee before the date on which the QPCA makes the payment; and

(2) At the time the QPCA makes the payment, the payee has not declined the QPCA’s services in the manner prescribed in the written notice.

.05 Payment card . A payment card is a card (or an account) issued by a payment card organization to a cardholder/payor which, upon presentation to a merchant/payee, represents an agreement of the cardholder to pay the merchant through the payment card organization.

.06 Payment card organization . A payment card organization is an entity that sets the standards and provides the mechanism for effectuating payment between a purchaser and a merchant in a payment card transaction. A payment card organization generally provides this payment mechanism by issuing payment cards, enrolling merchants as authorized acceptors of payment cards for payment for goods or services, and ensuring the system conducts the transactions in accordance with prescribed standards. In any case in which a

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electronically. You will receive the merchant data by U.S. mail for merchants that have authorized [insert name of payment card organization] to provide their data but do not consent to the data being provided electronically.

Your consent to receive the merchant data electronically will remain in effect until [insert duration of consent]. You may withdraw your consent by contacting [insert name of payment card organization] at [insert address and phone number]. A withdrawal of consent will be effective [insert date, such as date received or subsequent date]. After consenting to receive the merchant data electronically, you may request a paper copy of the data by contacting [insert name of payment card organization] at

[insert address and phone number]. A request for a paper copy [insert will or will not] be considered a withdrawal of your consent to receive the merchant data electronically.

In order to receive the merchant data electronically, you will need [insert description of hardware and software to access, print, and retain merchant data]. You will be notified of any change in hardware or software requirements prior to any change that would create a risk that you would not be able to access the merchant data electronically.

[If applicable insert the following:

[Insert name of payment card organization] may stop providing the merchant data to you electronically if [insert conditions].

You must inform [insert name of payment card organization] of any changes in your circumstances affecting your ability to receive merchant data electronically.

For more information, contact [insert contact name and phone number]. The notice may be included in the annual (or periodic) agreement, or amendments thereto, between the payment card organization and the cardholder or in a separate document. The notice may be furnished by U.S. mail or electronically. If furnished by U.S. mail, the outside of the envelope in which the written notice is mailed must contain, in bold and conspicuous type, the legend: “Important Tax and Privacy Materials Enclosed.” If furnished electronically, the subject line of the electronic communication through which the

related to the payment card organization’s activities as a QPCA.

(6) The approximate number and the type of merchants (individuals, corporations, etc.) enrolled by the payment card organization.

(7) An explanation of the payment card organization’s systems and controls related to the payment card organization’s activities as a QPCA for—

(a) Obtaining merchant/payee data (including merchant/payee data provided by reputable third-party sources);

(b) Validating the accuracy of the merchant/payee data;

(d) Maintaining the merchant/payee data; and

(e) Supplying the merchant/payee data to the cardholder/payor.

.03 Requirements for QPCA determina- tion . A payment card organization must meet the following requirements to obtain a QPCA determination:

(1) Authorization to act on behalf of cardholder/payors and on behalf of mer- chant/payees .

(a) The payment card organization must establish that cardholder/payors have authorized it or its members, affiliates, or licensees to act on their behalf in soliciting, collecting, and validating merchants’ names and TINs and to assist the cardholders in meeting their information reporting obligations under section 6041 and section 6041A. The payment card organization must also establish that merchant/payees have authorized it or its members, affiliates, or licensees to act on their behalf in furnishing their names, TINs, and corporate status to cardholders and to assist the merchants in meeting their obligations under section 6109(a)(2). To satisfy these requirements, the payment card organization must provide the written notice described in section 6.03(1)(b) to each cardholder/payor and must provide the written notice described in section 6.03(1)(c) to each merchant/payee.

(b) The text of the written notice provided to cardholder/payors must be in bold and conspicuous type, and the notice must include the legend: “Important Tax and Privacy Materials.” The notice must state:

As a cardholder, you may engage in transactions with merchants for which you may be required to file an infor

mation return with the Internal Revenue Service. If you are required to file an information return with the Internal Revenue Service reporting a transaction, you must include the amount of the payment, the merchant’s name, and the merchant’s taxpayer identification number. To assist you in fulfilling these potential information reporting requirements, [insert name of payment card organization] has received

[is seeking] approval from the Internal Revenue Service to provide a merchant data service to cardholders. If you accept the merchant data service,

[insert name of payment card organization] will act on your behalf, and on behalf of merchants, to solicit, furnish, and validate the merchants’ taxpayer identification numbers. A merchant’s taxpayer identification number and other merchant data may be provided to you through [insert name of issuer].

If you accept the merchant data service, please be advised that you must maintain the confidentiality of the merchant data provided to you and that you may use it only for purposes of backup withholding and filing information returns with the Internal Revenue Service.

You may decline the merchant data service. If you do not want [insert name of card organization] to provide this service to you, you must complete the enclosed (or attached) form and return it (or a copy) to [insert, as applicable, mailing, facsimile (fax) transmission, and/or e-mail directions].

If [insert name of payment card organization] does not receive your reply by [insert 60 days after date of notice], you will be deemed to have agreed to accept the merchant data service.

If you accept the merchant data service, you will receive the merchant data by U.S. mail unless you complete and return the enclosed (or attached) consent form indicating that you want to receive the merchant data electronically. If you complete the consent form and return it in the enclosed envelope, you will be required to confirm your consent electronically.

You will receive merchant data electronically only for merchants that have consented to their data being provided

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tion] at [insert address and phone number]. A withdrawal of consent will be effective [insert date, such as date received or subsequent date].

For more information, contact [insert contact name and phone number]. The notice may be included in the annual (or periodic) agreement, or amendments thereto, between the payment card organization and the merchant or in a separate document. The notice may be furnished by U.S. mail or electronically. If furnished by U.S. mail, the outside of the envelope in which the written notice is mailed must contain, in bold and conspicuous type, the legend: “Important Tax and Privacy Materials Enclosed.” If furnished electronically, the subject line of the electronic communication through which the notice is furnished must contain, in bold and conspicuous type, the legend: “Important Tax and Privacy Materials Enclosed.”

(2) TIN solicitation activities . The payment card organization must establish that it has undertaken, or demonstrate that it will undertake, the TIN solicitation activities described in section 7.

(3) Reliability of merchant/payee data . After obtaining the authorizations required by section 6.03(1), the payment card organization must participate in the IRS TIN Matching Program and must demonstrate, based on the TIN matching results, that its merchant/payee data is sufficiently reliable.