Congress writes the tax code….
A LOT of people ain’t gonna be happy with this rule for employers …..
The IRS under pressure will NOT require compliance for a year….
Lets see what a House Republican majority might say on the rule…..
Anyone getting paid for their goods and services through apps like Venmo, PayPal or CashApp, or platforms like Etsy and Airbnb, just got a reprieve from the IRS.
Following concerns expressed by the tax community, the electronic transactions industry and some lawmakers, the IRS said Friday it would delay by one year the implementation of a rule change that would have resulted in a virtual paper chase of tax forms going out by January 31, 2023, to anyone using such apps for their business transactions.
The rule change requires third-party payment platforms to issue a 1099-K to the IRS and the app user for business transaction payments if they add up to more than $600 over the course of the year. A business transaction that is taxable is defined as a payment for a good or service, including tips.
It used to be those platforms only had to issue you a 1099-K if you engaged in more than 200 business transactions for which you received total payments of more than $20,000 in a year.
“The IRS and Treasury heard a number of concerns regarding the timeline of implementation of these changes under the American Rescue Plan,” said Acting IRS Commissioner Doug O’Donnell. “To help smooth the transition and ensure clarity for taxpayers, tax professionals and industry, the IRS will delay implementation of the 1099-K changes. 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.”
Indeed, the increase in 1099-Ks issued early next year for people’s 2022 tax returns was expected to be, in a word, “ginormous,” according to Wendy Walker, who chairs the information reporting subgroup on the Internal Revenue Service Advisory Council….
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