IRS announces delay of $600 tax reporting rule for Venmo and PayPal payments
by Zachary Halaschak, Economics Reporter
November 21, 2023 01:34 PM
The IRS announced Tuesday it is delaying a controversial new requirement that will require people to report income in excess of $600 paid through apps such as Venmo.
The IRS said in a news release that the delay followed an outpouring of feedback from taxpayers and tax professionals. The agency said that as a result of the delay, taxpayers won’t have to file such a report unless they receive over $20,000 and had more than 200 transactions this year.
“As the IRS continues to work to implement the new law, the agency will treat 2023 as an additional transition year,” the IRS said in a statement. “This will reduce the potential confusion caused by the distribution of an estimated 44 million Forms 1099-K sent to many taxpayers who wouldn’t expect one and may not have a tax obligation.”
The requirement was passed by Congress in 2021 and attracted a torrent of criticism from Republicans, who contended the $600 rule was unduly onerous for taxpayers. The push is part of a broader effort from Democrats to empower the IRS to collect more revenue through greater funding and resources.
The IRS had already delayed the provision's implementation once before, speaking to the complexity of implementing such a sweeping new rule.
The IRS said on Tuesday that, given the complexity of implementing the requirement, it was planning to peg the threshold at $5,000 for tax year 2024 as part of a gradual phase-in to implement the $600 reporting threshold.
The agency said it is also looking into updating certain tax forms and schedules to make the reporting process easier for taxpayers.
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https://www.washingtonexaminer.com/policy/economy/irs-delay-600-tax-reporting-rule-online-payments-venmo
