WASHINGTON, D.C. – Conceding widespread confusion over Democrats’ law requiring payment platforms to report to the IRS on all transaction totaling more than just $600, the Biden Administration announced it would delay implementation for a second year in a row. The delay comes one week after the Government Accountability Office announced that the law would result in at least 30 million new 1099-K tax forms arriving in Americans’ mailboxes come January, even though the IRS has no plan on what to do with the new information – and it is unlikely most Americans will understand how to use them. The IRS further announced it would “transition” towards a $5,000 reporting threshold in the interim for the year 2024, despite absolutely no basis in the statute for doing so. This is nothing but politics. President Biden wants all transactions reported to the IRS but knows that 30 million surprise tax forms hitting American mailboxes in an election year would be bad politics.
Make no mistake – if reelected, President Biden and Democrats in Congress want the IRS to have data on every American transaction. They just hope you won’t notice. House Committee on Ways and Means Chairman Jason Smith (MO-08) issued the following statement:
“This flawed policy targets working-class Americans, and the Biden Administration knows steaming forward during an election year would be a disaster. By delaying implementation of this arbitrary and harmful new reporting threshold that goes after Americans for selling concert tickets and used furniture, President Biden is dodging accountability for Democrats’ partisan law that places over 90 percent of the tax burden on middle-class families and gig workers, according to the Joint Committee on Taxation. It’s unlikely this move is even constitutional given the clear text of the legislation Democrats enacted, when it’s up to Congress, not the White House, to amend or repeal bad laws. Republicans have tried to repeal this terrible law, but Democrats have refused. Given that even Democrats now admit that this law is unworkable and are trying to rewrite a key provision, it’s time to scrap it and start over.”
Prior to Democrats’ so-called American Rescue Plan Act, platforms like Venmo, Paypal, and others were required to report a person’s transactions to the IRS if, over the course of the year, the user had more than 200 commercial transactions and made more than $20,000 in payments. Now, if a user’s payments total more than just $600 it will trigger the issuance of a 1099-K report filing with the IRS — a form used by the agency to track business or trade payments and dealings.
Earlier this year, the Ways and Means Committee passed the American Families and Jobs Act, which included legislation by Congresswoman Carol Miller (WV-01) – the Saving Gig Economy Taxpayers Act – to repeal the new reporting threshold.