November 24, 2020

Amex statement issued by CITA

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american-express-cardFor CITA members who accept American Express

Dear CITA members,

I have more information for you on being an American Express merchant. Please read below what I have received from American Express.

From American Express:

As a merchant acquirer, American Express must adhere to new U.S. Federal regulation that requires American Express to collect a valid Taxpayer Identification Number or the appropriate documentation that shows that a merchant is not a U.S. entity.  American Express must collect this information from any merchant conducting business outside the U.S. that transacts in U.S. dollars, requests payment to a U.S. bank account, or maintains a U.S. address.  Beginning January 1, 2013, if a non-U.S. merchant has not provided American Express with the necessary documentation, the regulation requires American Express to withhold and remit to the IRS 28% of the merchant’s gross dollar payment of card transactions.

We want to work with any of our merchants who may be impacted by this regulation.  If you have not provided us with the necessary information required by the IRS, we encourage you to visit www.americanexpress.com/confirm where you can provide documentation of your non-U.S. status by selecting “Electronically submit tax certification” and answering a few simple questions about your business.  You can also call us at 1-800-297-2639, option 1 to provide the information or ask any questions you might have or you can send us an email to [email protected] with your name and phone number in order to be contacted back

Once we have received the appropriate documentation on non-U.S. status, merchants will be able to receive a refund of U.S. Federal Back-up Withholding withheld from their account directly from American Express, as well as claim exemption from future 1099-K reporting.

Why are some merchants who filed before January 1 still being withheld 28%?

There could be a number of reasons why a merchant who filed before January 1st is having back-up withholding.  For example, the information we received could be incomplete or inaccurate.  We urge any merchant that has questions to call us at 1-800-297-2639, option 1 or to send us an email to [email protected] with name and phone number in order to be contacted back. We will work with each merchant to resolve their issue, as each situation may be different.

In addition, once we receive the appropriate documentation on non-U.S. status, merchants will be able to receive a refund of U.S. Federal Back-up Withholding withheld from their account directly from American Express, as well as claim exemption from future 1099-K reporting.

Why is it taking 10-20 days for merchants to receive a response to their filing?   

It may take 10 to 15 business days to process non-US 6050W documentation and update the account status.  There is data that must be checked and verified, which takes time.  Merchants can call 1-800-297-2639, option 1 or they can send us an email to [email protected] with name and phone number in order to be contacted back and to answer any questions, including finding out the status of their Certification.

If a form is not complete or accurate, what process is in place to notify them so they can quickly move to correct it?  

American Express is contacting merchants that have not provided complete or accurate documentation.  However, we also strongly recommend merchants follow up on the status of their Certification and withholdings by calling 1-800-297-2639, option 1 or send us an email to [email protected] with their name and phone number in order to be contacted back

At what point does revenue from a transaction where the 28% must be withheld leave American Express and go to the IRS?  

American Express adheres to the regulation’s requirements in regards to payment of the withheld funds to the IRS, which is daily remittance.

Why can’t American Express work with the IRS to help expedite processing of the form?

American Express is working with the IRS.  If a merchant has any questions about their Certification, they should call American Express at 1-800-297-2639, option 1 or send us an email to [email protected] with their name and phone number in order to be contacted back and we will help them.

Based upon your experiences to date, what additional recommendations can you provide to merchants to avoid problems that may be occurring? 

We encourage merchants to call 1-800-297-2639, option 1 or send us an email to [email protected] with name and phone number in order to be contacted back if they have any questions or concerns.  In addition, they can visit www.americanexpress.com/confirm to certify their U.S. status.

US Federal Backup Withholding Tax Refund FAQs:

Q1.  If I am a non-US merchant, how can I get a refund for the US Federal backup withholding tax American Express withheld?

A1.  In order to receive a refund of the amount withheld you must document your non-US status.

By providing this documentation of non-US status you will be able to both receive a refund of US Federal Back-up Withholding withheld from your account, as well as claim exemption from future 1099-K reporting.

What we need from you:

•           Provide documentation of your status by visiting americanexpress.com/confirm, selecting “Electronically submit tax certification,” and answering a few simple questions about your business.

Q2.  How long does it take for my merchant account to be certified once I submit my documents?

A2.  It takes American Express 10 to 15 business days to process your non-US 6050W documentation and update the account status.  A customer care professional will be able to help you with the status of your account.

Q3.  How long does it take for the refund to process to take effect? 

A3.  Once your account status is certified American Express will process the refund. The same lead day for your bank to pay any regular submission also applies for the refund process.

From

Jane van der Bol l Executive Director l Cayman Islands Tourism Association (CITA)

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