IRS delays tax-reporting rule on Venmo, PayPal payments over $600

[highfigh]

Venmo eBay and other sellers sent out an email I remember receiving it about this specific matter asking us to contact our Congress representative to not allow the IRS to do this

Why would they do that if this wasn't affecting them? It's not hard to figure out why

1 It costs them more to implement both in time and money

2 And these companies only make money if they use our money and transactions when we do business

If more people will just go to private sale both sellers and buyers that's less money for them. That's exactly what I did after PayPal started trying this. Why would I sell my SVS PB 2000 pro (at a very generous loss mind you) only to be hit with a form that I would need to then dig up my receipt for and then bring in to my tax assesor on every single item I sold to make sure I don't get taxed on stuff I've already been taxed on that I'm selling for a loss?

The answer is I'm not going to I'm only going to take cash. The less I'm using their business to sell or purchase the less customers on the site for vendors to sell to.

So it costs them more to implement plus it costs them foot traffic on their site

I'm not surprised the IRS are holding off on it. I guarantee you behind the scenes these companies are lobbying and pushing back on this

Someone mentioned companies that received grants during the pandemic and then had major underreporting on their returns.

Your not going to catch them doing 1099s for 600 dollars. Theyre not hiding the profit on EBay or Venmo. Their are better ways to go after cheats like that then penalizing and coomplicatimg things for the rest of us with that ridiculous trigger $600 threshold.

I do agree $20,000 is a bit much which is why I think $5000 is better and I hope they stick with it. $5000 allows the little guy and the little sellers who aren't cheating anybody to do what they do. And anything above that limit that looks suspicious the IRS can target it's resources and go after

It's just a case of overregulation in an area not needed that will cause less profit and less business as people react to it. Underregulation is damaging but so is overregulation

I think if the IRS goes and stays with the $5000 limit it's the right call. Not under regulating nor over regulating. Just right in the middle where it should be. I think it's the right call. I'm just a regular Joe what do I know? But in my opinion I think it's the right call

And now that you have gone public with your plan to only take cash, they can use that against you.

They need to create a separate category for sales like these, not lump it into the rest of the tax code, IMO.

 

[Danzilla31]

And now that you have gone public with your plan to only take cash, they can use that against you.

They need to create a separate category for sales like these, not lump it into the rest of the tax code, IMO.

 

[mtrot]

The thing is, I'm suspicious of the intention behind changing the reporting threshold from $20,000 to $600 for third party sellers(PayPal, etc.) because it seemed to coincide with the push to hire 87,000 new IRS staff. They are not going to get that much more dollars out of the wealthy, no matter how many more staff they have, so what are all these employees going to be doing?

And they know full well that most people who engage in casual sales do not have receipts for items they may have bought years ago. Yes, you could include the sale of such items on your return and list the price for which you bought it and the price for which you sold the item, but then you'd be relying on the IRS to take your word for it. I recently sold some Legacy Audio speakers that I bought in the 1990's and I could only guesstimate what I paid for them. I do know that I sold them for less than what I originally paid, so there would be no tax liability, anyway.

 

[highfigh]

He could always plead the fifth and say or say that's hearsay.

Ever seen the Honey Badger videos? IRS don't give a shyte.

 

[highfigh]

They IRS already got a lean on everything and a hold on your bank accounts before you get that Infamous white envelope in the mail from them.

"Advance notice? You don't need no stinkin' advance notice!".

 

[Danzilla31]

The thing is, I'm suspicious of the intention behind changing the reporting threshold from $20,000 to $600 for third party sellers(PayPal, etc.) because it seemed to coincide with the push to hire 87,000 new IRS staff. They are not going to get that much more dollars out of the wealthy, no matter how many more staff they have, so what are all these employees going to be doing?

And they know full well that most people who engage in casual sales do not have recipts for items they may have bought years ago. Yes, you could include the sale of such items on your return and list the price for which you bought it and the price for which you sold the item, but then you'd be relying on the IRS to take your word for it. I recently sold some Legacy Audio speakers that I bought in the 1990's and I could only guesstimate what I paid for them. I do know that I sold them for less than what I originally paid, so there would be no tax liability, anyway.

Well for now we get not only a reprieve but a chance to prepare if the IRS moves forward with this

Like @highfigh said just document everything bombard them with forms save you some money and work the sh$t out of them.

I do agree with a lot of your concerns tho. And I think people have already been reacting to and changing their spending patterns because of this. Which is part of the reason why these companies such as PayPal Venmo eBay are pushing back against it. If it didn't affect their bottom line they wouldn't care.

 

[Danzilla31]

The thing is, I'm suspicious of the intention behind changing the reporting threshold from $20,000 to $600 for third party sellers(PayPal, etc.) because it seemed to coincide with the push to hire 87,000 new IRS staff. They are not going to get that much more dollars out of the wealthy, no matter how many more staff they have, so what are all these employees going to be doing?

And they know full well that most people who engage in casual sales do not have receipts for items they may have bought years ago. Yes, you could include the sale of such items on your return and list the price for which you bought it and the price for which you sold the item, but then you'd be relying on the IRS to take your word for it. I recently sold some Legacy Audio speakers that I bought in the 1990's and I could only guesstimate what I paid for them. I do know that I sold them for less than what I originally paid, so there would be no tax liability, anyway.

Nice speakers you sold by the way! Do you ever miss them?

 

[mtrot]

Nice speakers you sold by the way! Do you ever miss them?

Well, not really. They were just so big and the driver technology so old, 1990's era. Polypropylene woofers and mid-range drivers, and they were sealed speakers, so the bass was not as powerful in my room as you might think. Also, the tweeters were so high above my seated ear level. I just wanted to try some more modern speakers.