Recently the Internal Revenue Service (IRS) under Joe Biden has begun cracking down on small transactions over $600, which is hurting the little guy — small business owners.
What’s Happening: Starting this January, users of Venmo, Etsy, Airbnb, and other sites will get tax forms if they receive a payment of more than $600.
“Until this year, the threshold was much higher ($20,000 and 200 transactions) so it didn’t affect nearly as many people,” Venmo told users in its messages about the change. “This requirement only pertains to payments received for sales of goods and services and does not apply to friends and family payments.”
What People Are Saying: “Maybe it’s a boon to the IRS, but it’s not coming from the billionaires — it’s coming from the smaller businesses,” Sandra O’Neill, a tax attorney and partner at Bowditch & Dewey, said in an interview. “It’s much harder to go after the billionaires. It’s much harder to go after Amazon. If you have someone who makes a mistake — a small business — it’s very easy to go after them.”
“This adds insult to injury, knowing how long they were shut down for and how much income they lost,” said Rector, whose group says it includes 10 million hairdressers around the world. “These people went out on their own, they started to do house calls, they started to rent chairs — that’s why Venmo became such a big deal.”
“The IRS is in crisis,” Erin M. Collins, the national taxpayer advocate, said in the report. “As the IRS is preparing to begin the 2022 filing season, it is poised to carry over millions of unprocessed returns and millions of pieces of taxpayer correspondence, resulting in even longer delays for taxpayers who have been patiently waiting for far too long.”
