Miller, Capito sponsor bills to protect Americans from tax audits

U.S. Rep. Carol Miller (R-WV) and U.S. Sen. Shelley Moore Capito (R-WV) have introduced legislation that would protect Americans from a new tax liability by delaying the implementation of the 1099-K tax change that was included in the American Rescue Plan 

Prior to the American Rescue Plan, 1099-K forms were issued by the Internal Revenue Service (IRS) to taxpayers who exceeded 200 transactions totaling $20,000 in a tax year, Sen. Capito’s office said. Next year, under the American Rescue Plan, any electronic payments and transactions from online platforms, apps, or payment card processors equal to $600 will qualify for the 1099-K requirement.

Sen. Capito last week sponsored the Emergency Taxpayer Paperwork and Audit Relief Act, S. 5291, to delay the implementation of exceptions for reporting of third-party network transactions. Rep. Miller introduced the companion legislation in the U.S. House on Dec. 16, H.R. 9611.

“The Democrats’ so-called ‘American Rescue Plan,’ which contributed largely to our high inflation economy, also included a new tax liability for tens of millions of Americans starting this upcoming filing season,” Sen. Capito said. “If Democrats who voted for the American Rescue Plan get their way, you may now be facing additional taxes because you received money from friends or family through payment apps like Venmo and Paypal or sold tickets to a concert or sporting event. It would also give the government access to any information regarding transactions exceeding $600, regardless of intent,” she added.

On Dec. 21, Sen. Capito also introduced an amendment to the Fiscal Year 2023 omnibus package to delay the implementation of the tax plan in the American Rescue Plan that lowers the threshold for Americans to receive a 1099-K form from the IRS for one year.

Rep. Miller said the Emergency Taxpayer Paperwork and Audit Relief Act would “delay the implementation of the Democrats’ onerous reporting requirements for one year, giving a Republican-controlled House of Representatives time to fix the issue that Democrats refuse to address and saving West Virginia taxpayers from the pain of inept Democrat governance.”

The legislation is supported by Americans for Tax Reform, the National Federation of Independent Businesses, and the National Taxpayers Union (NTU).

“The $600 threshold for 1099-K information reporting is bound to confuse scores of taxpayers next year who participate in the digital economy, even for non-taxable transactions such as selling used items online at a loss,” Andrew Lautz, director of Federal Policy at the National Taxpayers Union, said. “Neither taxpayers nor the IRS are prepared for the deluge of paperwork, which is why NTU is glad to support Rep. Miller’s and Sen. Capito’s efforts to delay these reporting requirements for a year.”