WASHINGTON, D.C. – Today, all Ways and Means Republicans sent a letter, led by Committee Chairman Jason Smith (MO-08) and Congresswoman Carol Miller (WV-01), to Internal Revenue Service (IRS) Commissioner Daniel Werfel calling on him to testify before the Ways and Means Committee on the Biden Administration’s failure to follow a law passed by Congress and signed by President Biden. In November, the IRS announced its decision to delay implementation of the Democrat-mandated lower 1099-K reporting threshold that was included in the American Rescue Plan Act. In its flawed guidance, the IRS also made the legally dubious decision to change the law without any authority to do so from Congress.
“The IRS should not be shielding Democrats from the consequences of their own bad lawmaking – the clear intent of which was to maximize tax revenues, even if that meant placing 90 percent of the tax burden on middle-class families and gig workers,” said Chairman Smith. “Congress alone can repeal the unpopular, unworkable 1099K reporting requirement that Democrats and President Biden rammed through on a purely partisan basis. Republicans stand ready to do just that if the President and Senate Democrats would agree to join us. In the meantime, the IRS cannot sidestep the Constitution and simply rewrite laws.
“This Administration is hellbent on picking winners and losers in how they interpret the law. Unfortunately, the loser is always the American taxpayer,” said Congresswoman Miller. “The change of the reporting 1099-K threshold from $20,000 and over 200 transactions to only $600 would have hurt over 44 million American taxpayers and the IRS’s refusal to implement the change has created more uncertainty going forward. For this reason, the reporting threshold should remain at $20,000 which protects Americans from paying redundant taxes. My bill, the Saving Gig Economy Taxpayers Act will return the threshold to the time-tested standard and save Americans from unnecessary headaches for the foreseeable future. I am looking forward to the Commissioner’s testimony before the Committee, he will have many tough questions to answer.”
Click HERE for the full letter.
On the IRS delaying the implementation of the new 1099-K reporting threshold signed into law:
On November 21, 2023, shortly before the Thanksgiving holiday, the Internal Revenue Service (IRS) committed a lawless act by delaying the implementation of a new IRS Form 1099-K reporting threshold that congressional Democrats and President Biden enacted into law. Additionally, the IRS went a step further by even rewriting the law itself, changing important provisions as it sees fit. This comes after the agency announced a similar action last year on December 23, 2022, right before the Christmas holiday. The timing of these announcements makes it clear that the agency hopes Congress will not notice its refusal to implement a law passed by Congress and signed by the President. Well, we noticed.
On testifying before the Ways and Means Committee on why the IRS believes it can choose to not implement laws passed by Congress and signed by the President:
We write to ask you to provide the Committee with dates you are available between January 29 and February 7, 2024, to testify before the Committee on Ways and Means regarding why the agency believes it does not have to implement laws passed by Congress and signed by the President. The role of the Executive Branch is to execute the laws, not make them or delay them. Your announcement’s blatant disregard for the separation of powers and our nation’s constitutional order is alarming. We look forward to your appearance to answer questions about this decision.
To be clear, we did not vote for, nor do we support, the lowering of the Form 1099-K threshold. However, we have serious concerns with the IRS’s actions that have continually ignored the clear letter of the law, and now your agency appears to be writing an entirely new policy without the authority to do so. The legislation that our Democrat colleagues passed on a party line vote very clearly states that the Form 1099-K threshold was set at $600 for tax year 2022 and onward. The enacted law did not give the IRS room to delay or change this threshold.
On the Saving Gig Economy Taxpayers Act and congressional oversight of the IRS:
We agree with you that the IRS is not prepared to implement the law. That is why we passed H.R. 190, the Saving Gig Economy Taxpayers Act, through the Committee on Ways and Means earlier this year as part of the Small Business Jobs Act, which would return the threshold to the time-tested standard of $20,000 and 200 transactions. Congress has the power to legislate. The IRS does not. We do not like the law congressional Democrats passed and that President Biden signed, but we cannot ignore the rule of law violations involved in the agency’s decision. We cannot imagine how frustrated and upset our Democratic colleagues must be by your decision not to implement one of their signature pieces of legislation that would send 44 million new tax forms to Americans.