Rubey said eBay was conveying its views to congressional leaders so that the legislation doesn't overreach and negatively affect individual Internet users and the growth of small businesses.

Neither Amazon nor Google responded to requests for comment.

Sen. John Kerry (D-Mass.), chairman of the Senate Committee on Small Business and Entrepreneurship, is also taking a close look at the electronic payment reporting provision.

In an e-mail sent by his office, the senator said he wants to make sure the proposed credit card reporting requirements are implemented in a way that will not burden small businesses. "Our country's 27 million small businesses account for over half of our economy. There's a way to improve the tax reporting system without hurting small business growth," Kerry said.

In addition to the privacy issues, small-business groups are worried about its potential financial implications.

"Privacy issues are important, certainly, but we're concerned about the tax compliance side," said Bill Rhys, tax counsel for the National Federation of Independent Business.

Rhys said the electronic payment processing companies will have to put new systems into place to store the additional information, and whenever new systems are implemented, there is a greater potential for error. He said if these companies fail to collect the necessary information from a merchant because of a problem with their new systems, they will be required to withhold 28 percent of that merchant's money. Rhys said companies could pass on the costs of these new systems to the merchants in the form of increased fees.

Earlier this month, the House Small Business Committee held a hearing on a similar provision.

At that hearing, Committee Chairwoman Nydia Velazquez (D-N.Y.) said the measure, while developed with the best intentions, would threaten both the privacy and livelihoods of many businesspeople.

"At first glance, this measure seems like a reasonable means of tracking financial records and a sensible way to plug the nation's tax gap. Upon further review, however, it becomes clear it could have some potentially disastrous effects on small businesses," she said. "Rather than driving new revenue, the measure would saddle small firms with a myriad of privacy concerns and undue financial burdens."

At that hearing, Kim Stubna, director of public policy at First Data Corp., which processes electronic payment transactions for 5.4 million merchant locations and more than 2,000 card issuers and their customers, said that First Data was opposed to the provision because the company would be required to withhold 28 percent of a small business's cash flow until the accuracy of its taxpayer identification number (TIN) was verified.