No. The gross amount is the total unadjusted dollar amount of the payment transactions for a participating payee. It is not adjusted to account for any fees, refunds, chargebacks, or any other amounts.
Legal Reasoning and Rationale:
- Statutory Requirement:
- According to IRC 6050W(a)(2), payment settlement entities are required to report the gross amount of reportable payment transactions. This gross amount is defined as the total dollar amount of the payment transactions without any adjustments for fees, refunds, chargebacks, or other costs.
- Definition of Gross Amount:
- The term "gross amount" is explicitly defined to mean the total unadjusted dollar amount of the payment transactions for each participating payee. This definition excludes any adjustments for credits, cash equivalents, discount amounts, fees, refunded amounts, or any other amounts.
- Reporting Requirements:
- Payment settlement entities must report the gross amount of reportable payment transactions by month and the calendar year for each participating payee. This includes the name, address, and taxpayer identification number of each participating payee.
- IRS Guidance:
- The IRS FAQs and other guidance documents reiterate that the gross amount reported on Form 1099-K is not adjusted for any fees, refunds, chargebacks, or other costs. This ensures that the reported amount reflects the total unadjusted dollar amount of the transactions.
By adhering to these statutory and regulatory requirements, payment settlement entities ensure compliance with the reporting obligations under IRC 6050W.
Sources:
§ 6050W. Returns relating to payments made in settlement of payment card and third party network transactions
Publication 1220 (9/2023)
FS-2023-6
