Wire the zener diode between ground and the IPac input, just like on a 12v coin recognizer.

With 12v in, the toggle switch should output 12v in one position and ground in the other, right?
The zener diode regulates the 12v down to 5v = button not pressed as far as the IPac is concerned.
Flip the switch and now it's ground = button pressed as far as the IPac is concerned.
You can test the voltages with your multimeter before hooking it up to the IPac to be sure you won't fry anything.

Scott
EDIT: On second thought, I was thinking about a 4-tab switch -- not exactly sure how to wire a 3-tab switch for this application.

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