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GAO: IRS Expected to Receive 30 Million More 1099-Ks in 2024

S.J. Steinhardt
Published Date:
Nov 17, 2023

The IRS expects to receive roughly 44 million Form 1099-Ks in 2024—about 30 million more than in 2023—but does not have a plan to analyze the data "to inform enforcement and outreach priorities," the U.S. Government Accountability Office (GAO) found. The forms are used to report income from payment card and third-party settlement organizations—intermediaries between buyers and sellers of goods or services (e.g., Uber, Venmo, and eBay).

The American Rescue Plan of 2021 lowered the threshold from more than $20,000 in payments from more than 200 transactions to $600 in total annual payments, Accounting Today reported. The change was supposed to take place for tax year 2022, but the IRS delayed by one year the implementation date in the face of opposition from business groups, lawmakers and others who feared the prospect of surprise tax bills or audits. With the implementation now set to take place for this tax year, the IRS’s lack of a data analysis plan “to inform enforcement and outreach priorities … limits its understanding of changes in taxpayer burden," the GAO report states.

"Many taxpayers will receive Form 1099-Ks who did not in the past, which may help some taxpayers comply," the report states. "But, despite IRS communication efforts, it also may exacerbate confusion among some taxpayers, such as gig workers, who may not understand the taxability of their payments and taxes owed. For example, some of these taxpayers may not know how to calculate profit or loss and may not understand the information reported on the form. This puts them at risk of inaccurately reporting their incomes to [the] IRS or not meeting their tax obligations."

The GAO also said that the estimated number of 1099-Ks filed may change as the tax agency receives more information from large filers and states.

The report prompted criticism from the chair of the House of Representatives’ Committee on Ways and Means.

“Thirty million more tax forms flowing into mailboxes across the country will be a new years [sic] nightmare for millions of Americans and a mess for the IRS,” said Rep. Jason Smith (D-Mo.), in a statement. “Adding insult to injury, GAO’s report shows the IRS is ill-equipped to handle the implementation of this new policy while at the same time it does not even know if it will help the agency carry out its responsibilities.”

The GAO report stated that it is important that the IRS implement these previous recommendations: develop a collaborative mechanism to coordinate among the internal information return stakeholders, as well as to improve outreach to external stakeholders; research and develop potential recommendations to expand third-party information reporting on sole proprietor income and expenses; develop a plan to systematically evaluate information returns to improve compliance, and reduce fraud and reporting burden; work to determine the most appropriate thresholds for payment information reporting , including Form 1099-K; and analyze existing and forthcoming 1099-K data to better understand and gain insights into noncompliance and taxpayer burden to make enforcement and outreach decisions.


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