Fact Check: Forcing All Earners to Report Payments Is Part of Biden’s IRS Surveillance Agenda
To pay for Democrats’ partisan $2 trillion so-called “stimulus” that fueled inflation and pushed our economy towards a recession, the Biden Administration is requiring regular Americans to report when they sell concert tickets at cost, a used couch, or pay their neighbor’s kid to mow the lawn. (READ: Receive $600 on Venmo? Your IRS Forms Are Coming in January)
This is a far cry from their empty promises of using $80 billion in new funding to go after wealthy tax cheats and improving customer service at the IRS.
As the Wall Street Journal editorial board writes:
“The IRS is reminding Americans that the reporting rules have changed for payment-card and third-party payment network transactions. This means that if you received a payment of more than $600 via such networks as Venmo, PayPal, Amazon or Square, you will probably receive a Form 1099-K this year. The reporting limit for receiving a Form 1099-K used to be $20,000 a year.”
Prior to Democrats making this change, platforms like Venmo, Paypal, and others would only report 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 payments totaling more than $600 can trigger a 1099-K, creating a digital trail for IRS agents.
Fact: The IRS wants you to keep your receipts, no matter how old the item is, in case you sell it. This change means more paperwork–even if you sold personal items at a loss, like selling a used couch.
If you’ve sold a couch you purchased eight years ago, you may be required to show documentation of the original purchase to prove that you sold the item at a loss. Who hangs on to receipts for that long?
Fact: While Democrats claim this is only for commercial transactions, it’s unclear how they will distinguish splitting a check with friends from selling something on Facebook Marketplace or Craigslist.
Some third-party platforms ask buyers to check a box to distinguish personal transactions from commercial – but even this process can be confusing and prone to errors that will force many to have to spend hours fixing wrongly classified transactions with the services they’ve used.
Fact: This is part of Democrats’ unjustified IRS surveillance scheme to create a dragnet that monitors all taxpayers financial transactions.
Democrats and the Biden Treasury have repeatedly called for an IRS surveillance scheme that would turn local banks into a chapter of the IRS. As Reuters reported, “The Biden Administration first proposed a bank surveillance plan in 2021, but congressional Democrats were forced to drop the proposal due to public opposition.” But even Treasury Secretary Janet Yellen has insisted they will still pursue it, according to the New York Times.
(READ: Brady, Ferguson Request IRS Clarify Whether it Plans to Use $80 Billion Budget to Expand Surveillance Regime)
Fact: The $600 reporting requirement has never been explained or justified by Democrats – it’s even unclear how the provision was included in the bill.
Democrats didn’t hold a single hearing or produce any justification for the new $600 reporting requirement – in fact, thanks to its last-minute introduction, little was known about the provision prior to the bill passing into law.
Fact: Democrats claimed at the time the so-called “American Rescue Plan”–which included the new reporting requirement–was about fighting COVID and stimulating the economy. But this has nothing to do with either.
While only a dime of every dollar in Democrats’ so-called “stimulus” went to vaccines and fighting the virus, this new way for the IRS to monitor your financial transactions does nothing for the economy.
Fact: Republicans have bills to protect Americans from IRS audits and more monitoring.
Rep. Carol Miller (R-WV) offered legislation repealing the threshold on companies to send 1099-K forms to working class gig and sharing economy independent contractors earning at least $600 a year on any number of transactions, back to the standard requirement of $20,000 a year on at least 200 transactions.
As the Wall Street Journal editorial board notes:
“If nothing else, this gives the lie to the Democratic claim that the purpose of the $80 billion in the Inflation Reduction Act to hire all of those new taxmen is to target the rich. They’re coming for you, and the neighbor kid who mows your lawn.”