The merchant acquiring entity that transfers funds to the participating payee is responsible for reporting the gross amount of reportable transactions. A merchant acquiring entity can outsource the processing of the transactions to a processor that may share the contractual obligation to pay the merchant. When both a merchant acquiring entity and a processor have a contractual obligation to pay the merchant, the entity that submits the instructions to transfer funds to the merchant's account is responsible for preparing and furnishing a payee statement to the participating payee and filing Form 1099-K, Payment Card and Third Party Network Transactions, with the IRS.
Sources:
§ 6050W. Returns relating to payments made in settlement of payment card and third party network transactions
Publication 1220 (9/2023)
Rev. Proc. 2009-51
FS-2023-6
IRM Part 21. Customer Account Services. Chapter 7. Business Tax Returns and Non-Master File Accounts. Section 4. Income Taxes/Information Returns