The IRS launched a New Compliance Program targeting the underreporting of income by Merchant taxpayers who receive Form 1099-K information returns from credit card companies and third-party transaction networks. 
It is very important that you respond to the IRS!- Read the notice thoroughly and complete any worksheets.
- Gather your tax records including the 1099-Ks that you have received and determine if you agree with the notice about the underreporting of gross receipts.
- Consult your Tax Professional for Assistance.
- Consult your Tax Professional for Assistance.
- Consult your Tax Professional for Assistance.
The IRS uses the information reported from third parties to ensure individuals and businesses meet their tax obligations. The IRS is integrating the new information supplied on the Form 1099-K into a variety of areas, including its compliance efforts, to ensure fairness and address non-compliance.
All 1099-K activities respect taxpayer rights and provide opportunities for taxpayers and Tax Practitioners to offer explanations or corrections, if they receive a notice or audit related to this effort.
The program involves letters and notices going out to taxpayers who may have underreported their gross receipts.
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IRS Letter 5035: Notification of Possible Income Reporting
The letters then require different responses. One letter requests that the information be reviewed and IRS be notified if there are inaccuracies and/or a request to complete a Form 14420, Verification of Income.
If you have received one of these IRS Letters, contact the Tax Lawyers at Marini & Associates, P.A. for a FREE Tax Consultation at www.TaxAid.us or www.TaxLaw.ms or Toll Free at 888-8TaxAid (888 882-9243).
Read more at: Tax Times blog
