“The IRS on Tuesday shared tips for the upcoming tax season — including a reminder about the new $600 threshold for receiving Form 1099-K for third-party payments.

The change applies to payments from third-party networks, such as Venmo or PayPal, for transactions such as part-time work, side jobs or selling goods, according to the IRS.

Before 2022, the federal Form 1099-K reporting threshold was for taxpayers with more than 200 transactions worth an aggregate above $20,000. However, Congress slashed the limit as part of the American Rescue Plan Act of 2021, and a single transaction over $600 may now trigger the form.”

Analyst Comment: They’re not going after millionaires, they are targeting the middle and lower class. This is why politicians are doubling the size of the IRS; to go after small transactions like this.

The worst part about this change is the IRS has no idea what the transactions are for, and will likely assume if you have over $600 in transactions on one of these payment platforms, that it is income. But if you sold an old computer for $200 and a used firearm for $400, that isn’t taxable income as long as you sold those at a loss. The IRS has no way to know that and will simply assume a lot of people are just tax cheats. Additionally, if the IRS accuses you of tax fraud and demands unpaid taxes and penalties, it will cost you $20k to $30k to fight them in court. A lot of innocent people will end up paying taxes they do not owe under this scheme. And of course, it is entirely possible, if not likely, the IRS will politically target its enforcement efforts as it did with non-profit entities while Obama was President.