Family & Clubs Using Credit Cards How - To Handle a 1099-K that was sent to the IRS.

[arthurshurn]

How To Handle a 1099-K that was sent to the IRS.

I have four 1099-K Third Party Network payments that are in my personal name and I was required by Square to use my social security number to activate the accounts.

My understanding of the 1099-K rules was if the number of transactions exceeded 200 or the aggregate value exceeded $20,000, I would not be required to file the 1099-K. None of the four accounts met either of these thresholds in any of the accounts.

The Accounts are funds I manage as our Family Reunion treasurer. My family has a Family reunion account and a family scholarship account. The general reunion account is used to collect reunion dues from family members. The Scholarship Account is used to collect and disburse scholarship funds. We use Square as one vehicle to allow family members to pay. They have the option to pay using cash check or credit card. Those that choose to pay with a credit card is processed through the Square payment gateway from our web site. These funds in no way represent income to me personally.

I received a letter from the IRS taxing my personal taxes for the funds that were process via these accounts.

I live in the state of Massachusetts and just saw a article that states Massachusetts “REQUIRES” all 1099-k funds to be reported to the IRS.

How can I set up a Square account without using my personal social security number for these accounts?

[Anthem]

What a well organized family, sounds like mine could stand to learn some lessons from how yours plans ahead, in order to work together. 

Some time back, I looked into using square as a payment gateway to a non-profit fundraising effort I was involved in. In the end, a different solution was used which won't provide me any implementation experience to pass on. But, I do recall the accountant we were working with saying we'd be best to establish an official entity allowing us to use the IRS tax identification number associated with that entity rather than an individuals. 

I's suggested asking an accountant or CPA in your community as they will better understand your state laws as well.