Over the past year, I have fielded a number of questions on the 1099-K, Merchant Card and Third-Party Payments, introduced in 2011. This reporting form requires companies that handle merchant card transactions or third-party settlement transactions to report gross receipts of certain payees. A payee is essentially someone who accepts credit/debit cards through a merchant account (swipes cards at point of sale, inputs card information online, etc.) or accepts payment through a third party settlement company (think Paypal).
The 1099-K serves multiple ends, but one goal was curb the abuse of numerous individuals who made their living buying and selling things through Ebay and sites like it, but never reported income.
It has been a few months since I have visited the subject, but I was reviewing some of the material on the IRS website and came across an FAQ page for the 1099-K. The information was updated in the past few months and a good reference for those that still have questions about the 1099-K and what will and will not be reported on future 1099-K’s. The link is below. Enjoy.