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IRS delaying $600 payment reporting rule for PayPal, Venmo and more — again
The IRS on Tuesday said it is again delaying the implementation of a 2021 law that requires payment platforms such as Venmo, Paypal or Cash App to send tax forms called 1099-Ks to anyone who received more than $600 in the current tax year.
It’s the second consecutive year the IRS has delayed enacting the new regulation, after the tax agency last year pushed off the new law until 2023. On Tuesday, the IRS said it will push the regulation back another year “to reduce taxpayer confusion” after hearing from taxpayers, tax professionals and payment processors.
Without that delay, an estimated 44 million 1099-K forms would have been sent to millions of taxpayers for the current tax year, even though they may not have owed taxes on the payments and wouldn’t have been expecting such a form, the IRS said.
Additionally, the IRS said that starting in tax year 2024, it will raise the basic reporting threshold from $600 to $5,000 as it phases in the new rule.
A provision in 2021 American Rescue Plan requires users to report transactions through payment apps including Venmo, Cash App and others for goods and services meeting or exceeding $600 in a calendar year. Before the ARP provision — and now for this year — the reporting requirement applied only to the sale of goods and services to taxpayers who receive over $20,000 and have over 200 transactions.
Pushback from online sellers
The rule had sparked significant pushback from online selling platforms such as eBay and Etsy, with some of the companies arguing that the reporting requirement would create confusion and difficulties for sellers who rely on these platforms to make a living.
At the same time, Republican lawmakers had decried the plan as government overreach and argued that it could hurt people who rely on payment apps to reimburse friends and family members.
IRS officials said one reason for the delay is taxpayer confusion over what sorts of transaction are reportable under the new law. For instance, transactions between friends and families, like selling a couch or car or repaying a friend for pizza, would not be reportable. Likewise, selling used items such as clothing or furniture for a loss through a service like eBay could also generate a 1099-K, even though those sales would create no tax liability.
Yet other sales could be taxable, such as a small business that is selling goods or services for a profit.
“Taking this phased-in approach is the right thing to do for the purposes of tax administration, and it prevents unnecessary confusion,” IRS Commissioner Danny Werfel said in a statement. “It’s clear that an additional delay for tax year 2023 will avoid problems for taxpayers, tax professionals and others in this area.”
—With reporting by the Associated Press.
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Sen. Mark Kelly says feds need to do a “better job” of letting Americans know “there’s a huge amount of misinformation” on election
Washington — Sen. Mark Kelly said Sunday that the federal government needs to do its part to inform Americans of the vast swath of election misinformation that’s being consumed on social media platforms like X, TikTok, Facebook and Instagram.
“It’s up to us, the people who serve in Congress and in the White House to get the information out there, that there is a tremendous amount of misinformation in this election, and it’s not going to stop on Nov. 5,” Kelly said on “Face the Nation with Margaret Brennan.”
Kelly, who sits on the Senate Intelligence Committee, said he’s seen these misinformation operations target not only his state of Arizona, but also other battleground states.
“There is a very reasonable chance I would put it in the 20 to 30% range, that the content you are seeing, the comments you are seeing, are coming from one of those three countries: Russia, Iran, China,” Kelly said.
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In a committee hearing last month on foreign threats to the 2024 election, Kelly presented screenshots of Russian-made web pages showing fabricated headlines designed to look like Fox News and The Washington Post, targeted at voters in battleground states.
“So my constituents in Arizona and others — they seek to influence the outcome of these elections, and that is absolutely beyond the pale,” Kelly said at the Sept. 18 hearing. “We’ve got to do something about it.”
Vice President Kamala Harris and former President Donald Trump each have the support of 49% of Arizona voters, according to CBS News’ battleground tracker as of Sept. 30.
In another battleground state, Pennsylvania, Trump returned Saturday to hold a rally in Butler three months after an attempted assassination on him. He was joined by members of his own party and billionaire Elon Musk, who said Trump was the only way to preserve democracy and warned of a last election if he does not win in November.
Speaking to CNN’s State of the Union on Sunday, Kelly called the social media mogul a hypocrite.
“He’s standing next to the guy that tried to overturn the 2020 election on Jan. 6, saying that this is somehow going to be the last election and they’re going to take away your vote,” Kelly said. “And you know, it just doesn’t pass the logic test.”
At the White House press briefing on Friday, President Biden – speaking from the podium for the first time since taking office – said he’s confident of a free and fair election but alluded to the 2021 insurrection at the Capitol in his concerns on whether it will be a peaceful transfer of power.
“The things that Trump has said and the things that he said last time out when he didn’t like the outcome of the election were very dangerous,” Mr. Biden said. “If you notice, I noticed that the vice-presidential Republican candidate did not say he’d accept the outcome of the election, and they haven’t even accepted the outcome of the last election.”
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