CHARLESTON, W.Va. — Today, U.S. Senator Shelley Moore Capito (R-W.Va.) released the below statement on the Internal Revenue Service’s (IRS) decision to once again 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. Last year, Senator Capito introduced an amendment to the Fiscal Year (FY) 2023 omnibus package that would delay the reporting requirement for one year.
“This very provision was included in the American Rescue Plan that was passed with only Democrat support. Republican efforts to repeal these new requirements have been ignored by my Democrat colleagues until they realized the massive complications that would ensue during tax filing season. However, this is now the second time they have delayed implementation, which only leads to uncertainty for taxpayers. While I was glad to push for a Congressionally mandated one-year delay, I remain concerned about what authority the IRS has to enforce their delay and will continue working to find a lasting solution. My Democrat colleagues need to take responsibility for their mistake and take real action to fix it.” Senator Capito said.
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 year, 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 would have provided the IRS the Congressional authority to delay implementation of this poorly thought out change. Also last year, 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. Additionally, a reversal of the threshold changes similar to the SNOOP Act was included as a provision in the Small Business Jobs Act (H.R. 3937), which was passed out of the House Ways and Means Committee in June of this year.
Senator Capito also cosponsored a bill (S. 4817) in the 117th Congress, 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.