TEFRA Reporting Obligations

In the United States, Barter Exchanges are defined as third-party record keepers under the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA) and as such are subject to Internal Revenue Service (IRS) Form 1099-B reporting for the annual gross barter sales of the barter exchange’s members.  As a result, barter exchanges are also subject to IRS imposed Civil Penalties for non-matching Tax Identification Numbers (TINS) and therefore must comply with Publication 1281 B-Notice solicitation requirements where non-matching Tax Identification Numbers (TINS) have occurred. 

HELPFUL IRS LINKS:

Barter Exchanges

http://www.irs.gov/businesses/small/article/0,,id=113437,00.html

Topic 420 - Bartering Income

http://www.irs.gov/taxtopics/tc420.html

Tax Requirements for Barter Exchanges

http://www.irs.gov/businesses/small/article/0,,id=188094,00.html

Backup Withholding "B" Processes

http://www.irs.gov/businesses/small/article/0,,id=98151,00.html

Taxpayer Identification Number (TIN) Matching Program

http://www.irs.gov/govt/tribes/article/0,,id=131207,00.html

Publication 1281: Backup Withholding For Missing And Incorrect Name/TIN(S)

http://www.irs.gov/pub/irs-pdf/p1281.pdf