IRS POINT OF SALES SYSTEM CRACK
At the same time, the IRS decided to crack down on FSA/HRA providers that were not following prior IRS guidance on FSA debit cards. Though IIAS was first used in 2005, it was not officially approved by the Internal Revenue Service until July 2006, in IRS Notice 2006–69. For example, IIAS is described by the IRS as an "inventory control" system tied to SKUs but it's generally easier to understand as it was implemented by Walgreens and Wal-Mart, i.e., as a point-of-sale system tied to UPCs. This stems from the history of IIAS, as it was first developed by an online retailer () and only later adapted to brick-and-mortar retailing. The terminology used by the IRS in its descriptions of IIAS may seem unusual at first. This can be done contemporaneously with the transaction, or it may be provided later if the Internal Revenue Service ever audits the employer. Department of Agriculture can audit retailers directly for similar purposes: Beginning January 1, 2007, the merchant must make a record of each transaction available to the employer, or more commonly, to the employer's FSA or HRA provider. IIAS does have one additional requirement that is not normally found with food stamps, though the U.S. If there are other items in the order (or if the FSA debit card did not pay for all eligible items), the scanner or shopping cart then demands another form of payment, such as cash, check, credit card or debit card, to pay for the remaining items.If an FSA debit card is presented for payment, the scanner or shopping cart will charge the card, but for no more than the "FSA-eligible" total.At checkout, the scanner (for brick-and-mortar retailers) or shopping cart (for online retailers) keeps a separate total for those items that are "FSA-eligible".(In contrast, multiple departments of most grocery stores are categorically flagged as food-stamp eligible, including the meat, produce, and dry-grocery departments.)
Prescription drugs are usually not in the main scanner database (though they may be made scannable by tying the pharmacy system into the scanners), but they are almost always FSA-eligible therefore, the pharmacy department is often categorically flagged as FSA-eligible, the only department to be so treated.(This flag is separate from the one for food stamps, if there is one.) Every item in the store's scanner database is flagged "yes" or "no" for FSA eligibility.IIAS works in much the same way, but with medical FSAs, HRAs, or HSAs instead of food stamps: (Usually, the term "FSA" is used to cover all of them HRAs, HSAs, and non-medical FSAs are relatively rare, and HSAs can also have regular debit cards though many of them have FSA debit cards instead.) The remaining balance must be paid for by other means. In the beginning, the cashier pressed a special "food-stamp total" key, and the customer presented paper food stamps today, the customer swipes an Electronic Benefit Transfer (EBT) card and selects the "food stamp" account, and the register charges only the food-stamp total to the EBT card. Every item in the grocery store's database is flagged "yes" or "no" for food-stamp eligibility the scanner automatically keeps a separate total for food-stamp items. IIAS is similar to the system used by grocery stores ever since they introduced the first barcode scanners in the 1970s to separate items eligible for purchase under the Food Stamp Program from those that are not eligible.