CHARLESTON, W.Va. – Today, U.S. Senator Shelley Moore Capito (R-W.Va.) and Congresswoman Carol Miller (R-W.Va.-03) today released statements on the Internal Revenue Service’s (IRS) decision to delay the implementation of the tax scheme in the Democrats’ American Rescue Plan that lowers the threshold for Americans to receive a 1099-K form for one year. Earlier this week, Senator Capito introduced an amendment to the Fiscal Year (FY) 2023 omnibus package that would delay the reporting requirement for one year, which is exactly what the IRS decision today does.

“This very provision was included in the American Rescue Plan that was passed with only Democrat support two years ago. Republican efforts to repeal these new requirements have been ignored by my Democrat colleagues until the past week when they realized the massive complications that would ensue this tax filing season. I am glad that the IRS moved to issue the exact one-year delay I have been pushing for by offering an amendment this week to delay for a year, but I am concerned about what authority they have to enforce their delay and will continue working to find a lasting solution,” Senator Capito said.

“After nearly 2 years of relentless efforts to fix this issue and absolute failure by Congressional Democrats to address the problem they created, the Biden administration is taking the legally dubious step to delay implementation of the 1099-K reporting requirements for one year,” Congresswoman Miller said. “This is a great relief for taxpayers, small businesses, payment platforms, online marketplaces, and the Internal Revenue Service, who will all be saved from an avalanche of tax forms that were expected to hit in just a number of days. Now, tens of millions of taxpayers are left in limbo as the courts will need to decide the legality of this action from the Biden administration. Congress must act immediately to enshrine the former $20,000 and 200 transaction threshold into law permanently.”

BACKGROUND:

Prior to the American Rescue Plan, 1099-K forms were issued by the IRS to taxpayers who exceeded 200 transactions totaling $20,000 in a tax year. The American Rescue Plan drastically changed the reporting requirements, and now any electronic payments and transactions from online platforms, apps, or payment card processors equal to $600 will qualify for the 1099-K requirement.

Last week, Senator Capito and Congresswoman Carol Miller (R-W.Va.-03) introduced the Emergency Taxpayer Paperwork and Audit Relief Act, legislation that would delay the implementation of the Democrat budget gimmick in the Democrats’ American Rescue Plan that lowers the threshold for Americans to receive a 1099-K form from the IRS. The legislation will provide the Republican-led House of Representatives with more time to raise this threshold and prevent 30 to 50 million new forms from being sent out next month. Additionally, earlier this week, Senator Capito introduced an amendment to the Fiscal Year (FY) 2023 omnibus package that would accomplish the same goal as the legislation.

Senator Capito is a cosponsor of the Stop the Nosy Obsession with Online Payments, or SNOOP Act, legislation to strike the tax code provision inserted by in the American Rescue Plan that requires third-party payment platforms to report businesses’ gross transaction volumes totaling more than $600 to the IRS. Senator Capito is also a cosponsor cosponsored S. 4817, which would prevent the IRS from using any of the $80 billion included in the Inflation Reduction Act funding to conduct audits of taxpayers making less than $400,000. Recently, Senator Capito supported an amendment which would have repealed the reporting threshold.

Congresswoman Miller previously introduced H.R. 3425, The Saving Gig Economy Taxpayers Act, which will return this threshold to the time tested standard. It has the support of every Republican on the House Ways and Means Committee. Democrats in Congress have refused to acknowledge the problem they created or negotiate a solution. 

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