Home » Economy » Despite IRS pause, Americans getting 1099-Ks from payment network providers
Despite IRS pause, Americans getting 1099-Ks from payment network providers
IRS to begin sending 1099-K forms for some payments
Sen. Mike Braun, R-Ind., explains the details regarding the IRS starting to send out 1099-K forms for some payments on ‘Fox Business Tonight.’
Some Americans are finding a surprise tax form in the mail. It is Form 1099-K, the document sent by third-party network providers including eBay, PayPal and Venmo to report transactions made with debit, credit, or stored-value cards.
The American Rescue Plan lowered the dollar threshold under which a payment network had to send a 1099-K to $600 from $20,000 and lowered the minimum number of transactions to one from 200.
The change was widely criticized. The IRS delayed the requirement until next year, but some taxpayers are still getting the form now.
More than two-thirds of 1099-Ks entered this year into one tax preparation website fell under the $20,000 / 200 transaction thresholds, according to an employee posting.
Venmo, eBay and PayPal all confirmed to FOX Business that they do not send Form 1099-Ks unless required by law. So why are some people below the IRS filing threshold getting a form?
Tax experts speculate some smaller companies may have been unwilling or unable to adjust their systems to comply with the IRS end of the year change and decided to send out forms since there is no penalty for sending a Form 1099-K when it is not required.
"I predicted such an occurrence in interviews I gave after the IRS provided the one-year delay on December 23, 2022," said Tom O'Saben, the National Association of Tax Professionals director of Tax Content & Government Relations. "In my opinion, third-party settlement agencies likely had the infrastructure in place to comply with the reduced threshold rules and decided to follow those guidelines as general business practice immediately, rather than wait until next year."
SMALL BUSINESSES FIND RISKY TAX LOOPHOLE TO DODGE NEW IRS RULES
EconomyComments Off on Despite IRS pause, Americans getting 1099-Ks from payment network providers