• Wed. Nov 29th, 2023

Senator Manchin Reacts to IRS’s Postponement of Small Business Reporting Obligation


Nov 22, 2023

On November 21, 2023, U.S. Senator Joe Manchin (D-WV) released a statement regarding the decision made by the Internal Revenue Service (IRS) to delay the new $600 Form 1099-K reporting threshold requirement for third-party payment organizations for tax year 2023. The IRS will instead use a phased-in approach, allowing them to review their operational processes and address taxpayer and stakeholder concerns. Senator Manchin introduced an amendment to require this delay, which was ultimately successful. This decision is good news for small business owners and individuals who sell goods online as it will give them more time to adjust to the new requirements. Senator Manchin emphasized the need for Congress to enact permanent relief and stated that he will work with his colleagues to ensure taxation policies keep up with new online landscapes while protecting American taxpayers and small businesses.

The decision by the IRS to delay the implementation of the 1099-K tax reporting requirement is a relief for many taxpayers, tax professionals, and payment processors. For tax year 2023 and prior years, payment apps and online marketplaces are only required to send out Forms 1099-K to taxpayers who receive over $20,000 and have over 200 transactions. This means that many people will not be subjected to this new reporting requirement until next year.

The phased-in approach taken by the IRS aims to address concerns expressed by various stakeholders. By taking this approach, they hope to streamline the reporting process while still addressing any issues that may arise from implementing this new requirement too quickly.

More information about the decision and its implications will be available in due time. However, it is clear that this delay is a positive step towards ensuring that American taxpayers are protected from unfair burdens while still allowing businesses operating in the digital space to continue growing without unnecessary interference from government regulations.

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