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Peer-to-peer payment apps now required to report transactions greater than $600 to IRS

January 6, 2022 | | Print Article

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Republicans tried to warn the American people last year that though Democrats vow to only go after the rich and wealthy, their actions always betray them.

The American people chose to vote Democrats into power anyway, and now it appears they’re about to pay the price …

The COVID relief bill signed into law by Democrat President Joe Biden last March contained a Democrat-written provision forcing peer-to-peer payment apps to report any and all transactions over $600 starting on Jan. 1st, 2022.

These types of apps — think Cash App, PayPal, Square, etc. — allow people and businesses to move money around without the hassle of having to deal with a bank or an ATM.

Suppose somebody posts an ad to Craigslist for a mattress that he’s selling for $1000. Because the individual doesn’t want to deal with having to cash a check or deposit cash, he might stipulate that he only accepts peer-to-peer payments via apps like Cash App or PayPal.

Similarly, many online businesses use these same apps to accept payments when they sell their products. Otherwise, without access to these apps, said businesses would have to invest in a payment processor, which is an expensive endeavor.

While the invention of these apps has made life much easier for Americans, it appears Democrats are seeking to make life harder again.

“Beginning this year, third-party payment processors will be required to report a user’s business transactions to the IRS if they exceed $600 for the year. The payment apps were previously required to send users Form 1099-K if their gross income exceeded $20,000 or they had 200 separate transactions within a calendar year,” according to Fox Business Network.

“Democrats made the change in March 2021, when they passed the American Rescue Plan without any Republican votes.”

To be clear, businesses have always been required to self-report transactions over $600. What the new Democrat-created rule does is make it easier for the government to track businesses’ financial transactions for themselves.

Also, the rule is ostensibly designed to only apply “to payments received for goods and services transactions, meaning that using Venmo or PayPal to send a loved one a gift, pay your roommate rent, or reimburse a friend for dinner will be excluded,” according to Fox Business Network.

“Also excluded is anyone who receives money from selling a personal item at a loss; for example, if you purchased a couch for $300 and sold it for $250, the amount is not taxable,” the network notes.

However, knowing the government’s notorious incompetence and Democrats’ relentless desire to take more money from people, some are skeptical.

And still, even with the alleged exemptions, many in the public remain ticked off because the rule is clearly aimed at reining in micro-businesses that deal with small transactions, not at reining in corporations that deal with large ones.

In other words, it seems like the Democrats have discovered yet another way to tax poor and working-class Americans, according to critics.

Observe:

The new rule is nevertheless just one tiny segment of the Democrats’ larger plan to completely revitalize the IRS.

President Biden’s Build Back Better Act that congressional Democrats are desperately seeking to move through Congress would grant the agency extraordinary additional power by, as one example, reversing Internal Revenue Code section 6751.

Guinevere Moore, a tax attorney, notes in Forbes that this rule “provides that before the IRS can assess penalties against a taxpayer, the initial determination of that penalty must be approved in writing by the immediate supervisor of the agent who determined imposing the penalties is justified.”

This is important because it gives “taxpayers a more level playing field with the IRS.”

But Democrats, the same people who chant incessantly about so-called “equity,” now seek to eliminate this leveled playing field.

The Build Back Better Act also calls for adding 87,000 additional IRS agents so that the agency can pursue far more audits — including of middle-class Americans.

“Democrats’ tax and spending spree will more than double Americans’ chances of being audited as it targets lower and middle-income earners,” according to the GOP members of the House Ways & Means Committee.

“The proposal will lead to an additional 1.2 million IRS audits each year, nearly half of which will hit middle-class families making less than $75,000. All this so Democrats can wring an extra $200 billion out of the American people, particularly from middle-class families and small businesses.”

So much for targeting the rich and wealthy …

Vivek Saxena
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