Maintain Foreign Payment and U.S. Tax Reporting Compliance with Tipalti Automated Mass Payment Platform
AGOURA HILLS, Calif., Nov. 1, 2012 /PRNewswire/ — Ad and affiliate networks, crowdsourcing/crowd-funding networks, game and application monetization networks, and online/social marketplace operators that do business on a global basis face a mountain of regulations and paperwork just to pay their vendors.
Between the Office of Foreign Asset Control (OFAC) rules that govern to whom and to what countries U.S. businesses can send payments and the Internal Revenue Service (IRS) forms required for proper, legal tax reporting, dealing with the rules and paperwork can be a time-consuming, full-time job. Not to mention the fact that an error can cost thousands of dollars in fines, massive legal trouble and have a major impact on business survival.
Tipalti, the automated online mass payment solution that makes it fast, easy and inexpensive to send payments in local currency around the world, minimizes OFAC and IRS challenges with built-in automatic OFAC compliance scanning and electronic 1099/1042 form generation. With Tipalti, any size business can pay service providers–both businesses and individuals–quickly and easily while maintaining full compliance with the law.
Built-in OFAC Compliance
In the wake of 9/11, the U.S. Department of the Treasury tightened rules on foreign payments, creating a blacklist of countries, businesses and individuals to whom U.S. payments are strictly prohibited in an effort to minimize the funding of illegal activities, such as money laundering, drug trafficking and terrorism. Companies doing business internationally are required to verify payees do not appear on the OFAC blacklist, or risk severe penalties, fines and a termination of services from banking institutions.
Tipalti’s built-in OFAC compliance system automatically screens payees against the blacklist before issuing any form of payment to eliminate the risk of OFAC violations. The system provides valuable peace of mind to companies who depend on international vendors for their business.
“For companies that conduct a lot of international business, keeping up with changes to the OFAC blacklist is very challenging and expensive,” said Tipalti founder and CEO Chen Amit. “Tipalti handles all of that for you, eliminating the headache, the cost and the risk.”
Automatically Issue 1099 and 1042 Forms
To comply with IRS regulations, companies that pay more than $600 a year to an independent contractor are required to keep on file IRS Form W-9 (Request for Taxpayer Identification Number and Certification) for U.S. payees, or IRS Form W-8 (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding) for non-U.S. payees. In addition, payers must issue and file annual 1099 forms for U.S. payees, and 1042 forms for non-U.S. payees, stating all payments made to the vendor during the calendar year.
“Producing and verifying the paperwork can be time-consuming and costly, sometimes requiring days of dedicated effort to complete the filings in the required timeframe,” Amit says.
Tipalti turns this labor-intensive manual exercise into an instant, automated process, automatically pulling payment data from the Tipalti payee database to fill-in, print and mail the properly completed, required forms to the payee and federal and state authorities.
“By implementing Tipalti’s solution, we were able to completely automate the collection of W-8/W-9 forms from 100 percent of our publishers, with no time invested by us,” said Yariv Davidovich, president of ad network Infolinks. “We also achieved complete compliance with OFAC regulations, again without having to invest any of our time or resources.”
Tipalti’s automated online mass payment solutions make it fast, easy and free to send payments in local currency, in the supplier’s preferred payment method, to more than 190 countries in the world. With Tipalti, payers simply integrate a single line of code into their payee registration workflow using a white-labeled iframe. Vendors enter their preferred local currency and payment method, and when it’s time to disburse payments, the payer uploads a single payment file to Tipalti via a web dashboard or an API. Tipalti automatically disburses the funds based on the input preferences in the minimum amount of time and cost. Processing payments takes just minutes, and there’s no limit on how much or how little money can be sent.
Tipalti takes just minutes to integrate and configure with existing web portals. To get started sending payments around the world today, visit www.tipalti.com.
Tipalti’s Software as a Service (SaaS) allows crowdsourcing, crowd-funding and advertising networks to streamline payments to developers, contributors, publishers and affiliates. Tipalti supports a large number of payment methods per country, disburses payments in local currencies, handles tax-reporting requirements and fulfills the required screening of payees. For more information, visit www.tipalti.com.