Americans warned of impending IRS audits of Venmo payments: ‘They’re targeting you’

Critics are sounding the alarm Internal Revenue Service significantly lowering the threshold for reporting transactions through payment apps, a change that signals a new level of government targeting of small businesses and middle-class Americans.

The IRS issued a reminder last week to taxpayers who use third-party payment processors such as Venmo and PayPal about changes to their income reporting. updated explainer on their website. These changes, created by the American Rescue Act, now require platforms to report any transaction over $600.

“Joe Biden has said that no one making less than $400,000 will be targeted by his tax plan. It will hit millions of people who will not benefit at all,” Fox News’ Raymond Arroyo said Tuesday. . “That’s wrong.”

Following the passage of the American Rescue Act in March 2021, changes to the US tax code and Internal Revenue Service regulations added a new threshold for third-party payment processors. Starting this tax year, Americans must be prepared to file a Form 1099-K for any $600 transaction using online platforms.

The IRS has warned Americans about $600 for reporting VENMO, the cash app’s fees.

IRS headquarters in Washington, DC
(AP Photo/J. David Ake)

Previously, payment apps were required to send users a 1099-K if their gross revenue exceeded $20,000 or had 200 separate transactions in a calendar year.

Some called out Democrats for resisting their original message on the American Rescue Act, in which leaders said the changes would only target wealthy taxpayers.

“This time we were promised that the tax bill would only go after the super rich,” Americans for Tax Reform spokesman Grover Norquist said on “Fox & Friends” on Tuesday. “$600, they’re targeting you, me and anyone online.”

New changes to the report also raise concerns about additional scrutiny of taxpayers.


“It affects this year’s taxes, 2022 taxes,” Norquist said. “If those forms are flying to the IRS and you’re not prepared to defend yourself, if you don’t have all the back-up evidence that you know what you paid and how you did it, you’re done. You’re going to die from an audit because you don’t have documentation.” you don’t.”

“One report by Ticketmaster or Venmo, you get an audit. It’s a honeypot for an audit,” Arroyo said.

The new rule applies only to payments received for goods and services transactions, not for personal expenses such as sending gifts from Venmo or PayPal, paying rent, or repaying a friend. Also, people who sell a personal item at a loss are exempt from this rule.

Megan Henney of FOX Business contributed to this report.

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