Rollout of New IRS Rule Pertaining to Tax Reporting Requirement for Venmo, Cash App Users to Be Delayed
Edited by: TJVNews.com
The IRS announced on Friday that it will delay the rollout of a new rule that was set to lower the tax reporting threshold for transactions businesses make through third-party payment platforms like Venmo and Cash App, as was reported by TheHill.com on Saturday.
The IRS said in a press release that it chose to delay the lowering of the threshold to $600 following concerns that the agency and the Treasury Department received about the timeline, TheHil.com report indicated.
The Hill.com also reported that the American Rescue Plan, the $1.9 trillion COVID-19 stimulus package that Congress passed last year, includes a provision to require sellers to report if their transactions over these third-party networks exceed $600 in aggregate in a year, a significant drop from the previous threshold of more than 200 transactions exceeding $20,000 in a year.
The IRS said it will delay the implementation and that calendar year 2022 will be a “transition period” for the change, TheHill.com reported. The provision was set to go into effect on Jan. 1, 2023.
Acting IRS Commissioner Doug O’Donnell said, “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.”
The release states that implementation of the new threshold will be delayed to transactions that occur after 2022, as was reported by TheHill.com. The delay is intended to facilitate an “orderly transition” for compliance from the third-party organizations and individuals, the agency noted.
The IRS also said that the law does not affect personal transactions for individuals sharing the cost of a ride, a meal, a gift or a household bill, the report indicated.
It said the agency recognizes it must manage the policy carefully to ensure 1099-Ks, the form used to report the business transactions, are only sent to taxpayers who should receive them, according to TheHill.com report. It said additional details on the delay and information to help taxpayers will be available in the near future.