Tax ID Validation Process
The Internal Revenue Service requires that “...a payment settlement entity (PSE) must file Form 1099-K, Payment Card and Third Party Network Transactions, for payments made in settlement of reportable payment transactions for each calendar year.”
Worldpay issues 1099-Ks to e-commerce merchants, Payment Facilitators, and sub-merchants who are enabled for sub-merchant funding. Prior to issuing 1099-Ks, it is the responsibility of the Payment Facilitator to provide and validate sub-merchant Tax ID information to ensure that the validation process performed by Worldpay through IRS.gov is successful.
Resolving Tax ID Validation Failures
If the Tax ID validation fails, the PayFac Portal indicates the status in the Legal Entity Background Check Results panel of the View Sub-Merchant page (see the figure in Viewing Sub-Merchants and Legal Entities). You can re-submit the sub-merchant request when certain Tax ID validation errors occur and depending upon the stage of approval. In some cases, depending upon which fields you edit, a new background check is initiated, as listed in the table below.
If you created the legal entity using the PayFac API, additional fields may require updating.
Click the Edit button (if present) at the top of the View Sub-Merchant page to edit, update the necessary fields, and re-submit (see Editing or Disabling a Sub-Merchant).
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Edit Sub-Merchant Panel |
Field |
|---|---|
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When the Tax ID is not yet validated, updates to these fields trigger a new background check: |
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Legal Entity |
Name |
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EIN/Tax ID |
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Type |
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Principal Owner |
First Name/Last Name |
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SSN |
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Date of Birth |
|
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Driver’s License |
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Driver’s License State |
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| When the Legal Entity is in Retry status, updates to these fields trigger a new background check: | |
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Legal Entity |
Doing Business As |
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Address |
|
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Contact Phone |
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Principal Owner |
Address |
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Contact Phone |
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PayFac Tax ID Validation Report
You can also view the PayFac Tax Id Validation Report, available through the Scheduled Secure Report (SSR) service, to determine if a Legal Entity Tax ID Validation has failed. This report only applies to legal entities that have a sub-merchant funded through the Worldpay, and is produced daily.