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S1425-119

Introduced

To amend the Internal Revenue Code of 1986 to modify the exception for de minimis payments by third party settlement organizations.

119th Congress Introduced Apr 10, 2025

Analysis under review: This bill has generated analysis that may be too generic or incomplete. Clause-level evidence remains available below.

Summary

What This Bill Does

This bill raises the IRS reporting threshold for third-party payment platforms (PayPal, Venmo, eBay, Etsy, etc.) from $600 back to $10,000 or 50 transactions. The American Rescue Plan Act of 2021 had lowered the threshold to $600, meaning millions more small sellers and gig workers would receive 1099-K forms. This bill reverses that change, effective for transactions after December 31, 2024.

Who Benefits and How

Small online sellers, freelancers, and gig workers benefit by not having to deal with 1099-K forms for modest amounts of income. Third-party payment platforms like PayPal, Venmo, Stripe, and marketplace operators like eBay and Etsy benefit from reduced reporting compliance costs and fewer customer service issues. Casual sellers who occasionally sell personal items online will no longer receive confusing tax forms for non-taxable sales.

Who Bears the Burden and How

The IRS loses visibility into potentially taxable income below the $10,000 threshold, which may reduce tax compliance and revenue collection. Tax preparation services may see reduced demand from casual sellers who no longer receive 1099-K forms.

Key Provisions

  • Reinstates the $10,000 / 50-transaction threshold for 1099-K reporting by third-party settlement organizations
  • Applies the same de minimis threshold to backup withholding rules
  • Effective for transactions settled after December 31, 2024

Evidence Chain:

This summary is generated from the full bill text using AI analysis. Expand "Detailed Analysis" below for identified beneficiaries/burden bearers with clause-level evidence links.

At a Glance

What This Bill Does

Raises the IRS reporting threshold for third-party payment platforms (like PayPal, Venmo, eBay) back to the pre-2021 level of $10,000 or 50 transactions, reversing the lower thresholds enacted in the American Rescue Plan Act.

Key Policy Areas

Taxation, Financial Services, Small Business

Primary Purpose

Raises the IRS reporting threshold for third-party payment platforms (like PayPal, Venmo, eBay) back to the pre-2021 level of $10,000 or 50 transactions, reversing the lower thresholds enacted in the American Rescue Plan Act.

Policy Domains

Taxation Financial Services Small Business

Section 2 - Reinstatement of De Minimis Exception

Identified Gains
  • Third-party payment platforms (PayPal, Venmo, Stripe)
  • Online marketplace operators (eBay, Etsy, Amazon third-party sellers)
  • Small online sellers and gig workers
  • Casual sellers of personal items
Model: N/A | Version: bill_summary_v2 | Source: is
Casual sellers of personal items:
Small online sellers and gig workers:
Third-party payment platforms (PayPal, Venmo, Stripe):
Online marketplace operators (eBay, Etsy, Amazon third-party sellers):
Identified Costs
  • Internal Revenue Service
  • Federal government (potential revenue loss)
Model: N/A | Version: bill_summary_v2 | Source: is
Internal Revenue Service:
Federal government (potential revenue loss):

Section 3 - Application to Backup Withholding

Identified Gains
  • Third-party payment platforms
  • Participating payees (sellers/gig workers)
Model: N/A | Version: bill_summary_v2 | Source: is
Third-party payment platforms:
Participating payees (sellers/gig workers):
Identified Costs
  • Internal Revenue Service
Model: N/A | Version: bill_summary_v2 | Source: is
Internal Revenue Service:

Sponsors

Bill Cassidy

Bill Cassidy

R-LA | Primary Sponsor

1 cosponsor

Legislative Progress

Introduced
Introduced Committee Passed
Apr 10, 2025

Mr. Cassidy (for himself and Ms. Hassan) introduced the following …

Stakeholder Effects

cui bono?

How this legislation distributes effects. Mention counts reflect frequency, not effect magnitude.

Payment Processing Services
2 mentions across 2 clauses
+2 positive

Third-party payment settlement organizations (PayPal, Venmo, Stripe, Square)

Independent Artists, Writers, And Performers
2 mentions across 2 clauses
+2 positive

Small online sellers and gig workers (participating payees), Small online sellers and gig workers using payment platforms

Electronic Shopping
1 mention across 1 clause
+1 positive

Online marketplace operators (eBay, Etsy, Amazon Marketplace)

Government
1 mention across 1 clause
-1 negative

Internal Revenue Service

2/3
sections analyzed
Full impact breakdown

Bill Structure & Actor Mappings

Who is "The Secretary" in each section?

Domains
Taxation Financial Services
Actor Mappings
"third_party_settlement_organization"
→ Payment platforms like PayPal, Venmo, Stripe, eBay, Etsy that process transactions
Domains
Taxation
Actor Mappings
"payor"
→ Third party settlement organizations making payments to participating payees

Key Definitions

Terms defined in this bill

2 terms
"reportable payment for backup withholding" §3406(b)

Third party network transaction payments are reportable only if they exceed the de minimis thresholds

"third party settlement organization reporting exception" §6050W(e)

Required to report only if transactions exceed $10,000 OR aggregate number exceeds 50

We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.

Learn more about our methodology