If you haven’t heard, the IRS is looking to expand its reach into yet another aspect of Americans’ private lives. This time, they want to snoop on your private bank records and transactions. Contrary to President Biden’s claim, they aren’t just going after the wealthy, they are coming for you. This is unacceptable, and Congress must act to stop this outrageous overreach.
We all know the disappointment of having to miss a big concert or sporting event because life just got in the way. What do we do with those expensive tickets? Sell them to a friend, of course.
Thankfully, apps such as Venmo make this easy. Found some knickknacks in the attic and need some extra cash for rent? Easy, sell them on Etsy. Simple, right? Not if the IRS gets its way.
Now, if you are asking yourself why the IRS is all of a sudden going to start snooping on your private transactions, the answer is simple: Democrats inserted a hidden provision in the American Rescue Plan requiring third-party payment platforms to report to the IRS when a company or individual brings in revenues exceeding $600 or makes a single transaction. Historically, the IRS was only required to report this information for a company or individual if revenues exceeded $20,000 across 200 commercial transactions.
After much warranted public outcry and a lack of guidance on implementation, the IRS announced at the end of 2022 that it will delay implementation of this provision until the next tax season.
Had the IRS been able to implement their new burdensome reporting requirements, come tax season this April, individuals would have been responsible for reporting these simple transactions to the IRS, completing their complicated 1099K form, and adding another burden to the already onerous tax filing process.
That means the IRS would be empowered to snoop on the private finances of Americans who use a third-party payment platform on anything from the transfer of concert tickets to paying rent, setting up an online wedding registry fund, or even selling a couch to a neighbor or used textbooks to a fellow student. And with radically expanded IRS enforcement thanks to the partisan Inflation Reduction Act, innocent taxpayers could face new challenges with the army of new tax enforcers. To make matters worse, with the IRS’ bolstered data collection, our constituents will face new risks of having their sensitive personal information opened to unauthorized access and identity attacks.
That’s why we reintroduced our legislation, the Stop the Nosy Obsession with Online Payments Act. Our bill would strike the American Rescue Plan Act’s new reporting modification and return reporting requirements to their pre-2021 status.
Under the weight of inflation, many Americans have turned to microbusiness, gig work, or even selling their belongings to make ends meet. The imposition of this reporting requirement will punish them for doing so by subjecting them to an additional, confusing tax form that may cause them to overreport their income or force them to waste time documenting the value of an item they sold. In many cases, filing this form will be a complete waste of time, serving only to prove the taxpayer has no additional tax liability. The IRS exists to serve Americans, not to make the lives of taxpayers harder.
Additionally, the added paperwork burden will only cause further unacceptable delays for an IRS that is already unable or unwilling to prioritize the timely processing of filers’ tax returns. The agency needs accountability and reform — not more weapons to squeeze law-abiding taxpayers. Congress should be working together to simplify and reduce tax filings; our legislation does that.
Congress must act now to prevent an overbearing IRS from imposing this requirement on hardworking individuals. We urge all our colleagues in Congress, regardless of party, to support this legislation so we can undo this IRS reporting debacle and make the tax system work better for all Americans.
• Rep. Michelle Steel is an American politician serving as the U.S. representative for California’s 45th congressional district since 2023. Sen. Bill Hagerty is an American politician, businessman, and former diplomat serving as the junior United States senator from Tennessee since 2021.
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