Cash Back inflates Merchants' Revenue

Merchants might get upset that the IRS's computer program to track merchant revenue does not take into account cash back. So merchants that provide this service for their customers could be on the hook for a bigger tax bill. Let's say a merchant gives $5,000 a month in cash back to his customers. His processor must report the merchant's monthly processing volume. The IRS program does not account for cash back. It treats that as regular earned income that the merchant must pay taxes on. Imagine paying taxes on an additional $60,000 that was basically ...

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