IRS delays controversial $600 reporting requirement for digital commerce sites like Venmo, PayPal
The Internal Revenue Service decided to delay implementation of the plan amid bipartisan opposition.
The IRS announced Friday that it will delay the implementation of a plan to require e-commerce platforms such as PayPal and Cash App to send tax forms to customers who have transactions of more than $600.
"The additional time will help reduce confusion during the upcoming 2023 tax filing season and provide more time for taxpayers to prepare and understand the new reporting requirements," acting IRS Commissioner Douglas O’Donnell told The New York Times.
This rule doesn't change what income is taxable, just what payment information the IRS will receive. Gig workers, sellers, small businesses and others who rely on online platforms for work are required under the law to report and monitor their income.
Though congressional Democrats and Republicans expressed concerns about the requirement, they failed to get a rule to stop it inserted into the omnibus fiscal 2023 funding bill they passed this week.
"I am pleased the Treasury Department and the IRS listened to my request to delay the 1099-K reporting requirement that will harm small businesses and individuals who sell goods online across America," West Virginia Democrat Sen. Joe Manchin said. "This will allow Congress more time to correct this regulation that puts undue burden on our small businesses."