Sen. Sherrod Brown (D-Ohio) and Sen. Bill Cassidy (R-La.) introduced legislation today to raise the IRS’s 1099-K reporting threshold for Venmo and PayPal transactions to $10,000, only half of the original $20,000 required before Democrats dramatically lowered the threshold to $600 in 2021.
The legislation also increases the number of transactions required for filing a 1099-K to 50, only one-quarter of the previous requirement of 200 transactions eliminated completely by Democrats in the misnamed “American Rescue Plan” spending blowout.
Grover Norquist, President of Americans for Tax Reform, issued the following statement opposing this legislation:
“Sen. Brown is attempting to solve only half of the problem he created when he voted for the IRS to come after millions of Americans’ Venmo and PayPal transactions. Restoring only half of the original threshold and one quarter of the required transactions won’t cut it. Nothing less than a full restoration of the original reporting requirements of $20,000 AND 200 transactions is acceptable to taxpayers. Democrats alone voted for this to happen. Voters know Democrats alone changed the law. President Biden’s IRS illegally delayed implementing the lower thresholds to protect Democrats from the political consequences of their own actions. No Republican should lift a finger to bail out Democrats from the IRS nightmare they created unless the plan is a full restoration of the original 1099-K reporting thresholds.”
As part of their $1.9 trillion “stimulus” bill passed in 2021 on entirely partisan lines, Democrats lowered the 1099-K reporting threshold from $20,000 and at least 200 transactions, to $600 and zero required transactions. It is estimated that more than 20 million Americans could receive a 1099-K next year.
Without congressional action, anyone who was paid more than $600 for selling goods or services using a third-party app, such as Venmo or PayPal, will receive a 1099-K tax form from the IRS starting in January. For example, someone who sold tickets to a concert or sporting event they couldn’t attend – even at a loss – could now have that transaction treated as taxable income.
Americans for Tax Reform has endorsed The Saving Gig Economy Taxpayers Act reintroduced this Congress by Rep. Carol Miller (R – W. Va.) that repeals Democrats’ 1099-K threshold of $600 and restores the original thresholds of $20,000 AND 200 transactions. ATR encourages all lawmakers to support this legislation that would prevent millions of Americans from receiving a bill for taxes they don’t owe.