Answer:
Just as with a consumer account, tax reporting burdens may apply depending on how much you will pay and how much the person being paid can earn. At $600, a 1099-MISC will be required and you'll have to track the payments to know that you are or are not at that limit.
The common issue with these programs is privacy, and the necessity of some waiver on the part of the new customer. When you pay a person sending in the referral for an account that is opened, you are disclosing that a relationship now exists and that can violate Reg. P. A business is not protected as a consumer is, so you have avoided that limitation. (Please ensure your state laws don't prohibit this.)
First published on BankersOnline.com 9/06/10
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