Online payment apps such as PayPal and CashApp will report how much money individual users receive each year to the IRS. To be more specific, these apps are required by law to report to the IRS if the user has received more than $600 in a year. The end-user will be sent a 1099-K form in the mail or electronically right around “tax time” which is during the first quarter of each year. There are a few reasons why this is happening, but the main reason is clearly to try and draw more money out from an already strained American middle class.
The IRS has plenty of documentation on citizens beyond what was just passed. They already have the ability to enter citizens’ bank accounts in a roundabout way. There are certain triggers that a person can activate that will require banking institutions to immediately port to the Federal Government. A prime example of that is when a person deposits more than $10,000 at once. That transaction is immediately flagged then sent to the IRS since they think that might be suspicious and/or worth taking a deeper look at. If a person has outstanding student loan debt or IRS tax debt, there are times where a person’s bank account can be garnished.
The legality of garnishing money on online payment apps that store money isn’t quite as clear. However, the Federal Government would like to have as much documentation as possible on a person before said person files taxes. They already have W2 forms with a ton of information on employees that employers send them yearly. This information includes residence, income, social security number, amount of dependants, and more. So if the IRS can also get a clearer picture of money that is received on payment apps through 1099-K forms that a company like PayPal sends them, that makes it that much easier. All the IRS has to do at that point is cross-reference what they already have on file with what citizens send them when they file taxes. If it doesn’t add up, that’s an easy way to send a bill for the past-due balance.
This appears like a method the Government is utilizing to fleece the American taxpayer. Wealthy individuals and companies like Elon Musk – Tesla are already taxed beyond normal comprehension. Musk says that he will pay the most taxes out of any person in the history of the United States, maybe even the world, at 11 billion. In one year. The Government can’t really get more from rich people until they begin to flee the country at an even higher rate than now. The next step is to fleece the middle-class and maybe even the poor for balance-due bills of $500 to $1,000. Maybe even less.
SOURCES:
Fact or fiction: The IRS is tracking payments over $600 on Paypal and Venmo in 2022 – CNET
Venmo, Cash App, PayPal to report transactions of $600 or more to IRS – Marketplace
General FAQs on New Payment Card Reporting Requirements | Internal Revenue Service
63% Of Americans Don’t Have Enough Savings To Cover A $500 Emergency
IRS: Report stolen property as income, unless you return it the same year | KXAN Austin
