First announced as part of the Biden administration’s 2021 American Rescue Plan, the regulation previously scheduled for the 2023 tax season substantially reduced the Form 1099-K benchmark for third party commerce service providers. Previously, those forms were only issued to people with more than 200 transactions or $20,000 in total profits. The new rules would drop the requirement down to just $600 in profit. The majority of such commerce is facilitated by services like the aforementioned Venmo and PayPal, as well as Square and Zelle. Ensuing backlash from lawmakers, tax filing companies, and the public eventually caused the IRS to issue its first delay in December 2022.
On Tuesday, the IRS conceded the estimated 44 million pending Form 1099-K’s could result in unnecessary “potential confusion” this year for “many taxpayers who wouldn