IRS, Delay

IRS to Delay Required Issuance of 1099-K for Payment Platforms

Many were dreading the requirement for payment service entities (PSE) like PayPal, Venmo, and Cash App to issue a 1099-K for taxpayers receiving $600 or more for goods and services.  The legislation requiring this was part of the American Rescue Plan Act of 2021. Congress was poised the delay this measure but Congressional Action failed. Instead, the IRS announced a reprieve on Friday for these forms for one year.

While reporting the income is not anything new, it would have been an administrative headache. There have already been mounting issues with the IRS during the past few years where COVID has impacted the IRS’s ability to attend to taxpayer questions and concerns. Many tax professionals were already bracing for more confusion this tax season by taxpayers who are not familiar with the requirement.

The measure would have impacted many small businesses and even those who have been doing marginal selling online but have never received this form. There was also the possibility of numerous additional CP2000 notices for taxpayers because of the power threshold and who may not have known to retrieve the 1099-k form online or if they moved, didn’t get the notice. 

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Disclaimer: This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult a tax, legal and accounting advisors before engaging in any transaction or submitting any IRS form.
Ramin Mohammad

Ramin Mohammad

Ramin Mohammad is a lawyer and CPA with over 15 years of experience including working in audits, teaching, and in big law. Ramin helps clients on both personal and business related tax issues ranging from a multitude of practice areas including tax structuring, planning and cross jurisdictional taxes. His client-base expands throughout the US and overseas offering tax consulting, tax planning and tax preparation.

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