SECTION 6. APPLICATION AND

REQUIREMENTS FOR QPCA DETERMINATION

.01 Where to apply for QPCA determi- nation . A person authorized to act on behalf of a payment card organization may submit a written request for a QPCA determination to the following address:

Internal Revenue Service 1601 Market Street 20 ^th Floor ATTN: TIN Matching Coordinator SE:S:CCS:CRC:PC&T Philadelphia, PA 19107

.02 Content of QPCA application . A payment card organization requesting a QPCA determination must include the following in its application:

(1) The name, address, and employer identification number of the payment card organization and a description of its business.

(2) The name of the department or office of the payment card organization that will serve as the information contact.

(3) The name of the department or the names and titles of the officers or employees that will be responsible for the performance of the TIN solicitation activities described in section 7.

(4) A list of the systems, business lines, or card product lines or levels that will be covered by the TIN solicitation activities described in section 7 and that will be covered by a QPCA determination.

(5) An explanation of the account opening procedures and documents the payment card organization uses, or requires its members, affiliates, or licensees to use, to establish merchant account relationships

to the payee. The regulations further provide that the IRS will inform the payor or the payor’s authorized agent whether or not the name/TIN combination furnished by the payee matches a name/TIN combination maintained for the TIN matching program. Revenue Procedure 2003–9, 2003–1 C.B. 516, describes the procedures for participation in the IRS TIN Matching Program.

Section 31.3406(g)–1(f) of the Employment Tax Regulations provides that the backup withholding requirements of section 3406 do not apply to payments made through a QPCA if the payments are made to a qualified payee or during a grace period. Section 31.3406(g)–1(f)(3) requires a QPCA to notify the cardholder/payor when payments are made to a merchant/payee who is not a qualified payee. Proposed amendments to these regulations would require a QPCA to notify the cardholder/payor when payments are made to a merchant/payee that does not participate in the QPCA program.

.04 Information reporting penalties and waivers for reasonable cause . Section 6721 of the Code provides that a payor may be subject to a penalty for failure to file a complete and correct information return. Section 6722 of the Code provides that a payor may be subject to a penalty for failure to furnish a complete and correct information statement to a payee. A failure subject to the section 6721 and section 6722 penalties includes a failure to include correct payee TINs.

Section 6724 provides that the penalties under section 6721 and section 6722 may be waived if the filer shows that the failure was due to reasonable cause and was not due to willful neglect. Under section 301.6724–1(e)(1)(vi)(H) and (f)(5)(vii) of the Regulations on Procedure and Administration, a cardholder/payor in a payment card transaction may establish reasonable cause based on its reliance on a QPCA.