Sponsors (2)
The bill eases reporting and withholding burdens for many small-value transactions—reducing costs for sellers, gig workers, and platforms—but increases the risk of unreported income and shifts enforcement and implementation costs onto audits and platform systems.
Small sellers, gig workers, and payment processors will report and remit fewer low-value or low-frequency transactions because of the dual de minimis thresholds ( $10,000 or 50 transactions), reducing administrative burden, compliance costs, and likelihood of backup withholding for low-activity payees.
The bill gives payees and platforms a clear, predictable reporting standard (the dual thresholds), making it easier for businesses and payment processors to determine when 6050W reporting and backup withholding apply.
The IRS will have fewer low-value filings to process, allowing it to focus enforcement and examination resources on larger, higher-risk cases.
Many low-value transactions will no longer be reported, creating a risk that unreported income increases and tax noncompliance rises because small transactions can escape automated reporting.
Reduced upfront reporting shifts enforcement to post-filing audits and investigations, which can increase audit activity and potential costs for taxpayers who are later flagged.
Payment platforms and businesses must implement per-payee transaction counting and running annual dollar totals to apply the dual thresholds, introducing system complexity, compliance costs, and creating sharp ‘cliffs’ for payees whose volume sits near the thresholds.
Based on analysis of 3 sections of legislative text.
Introduced April 10, 2025 by Bill Cassidy · Last progress April 10, 2025
Restores a "de minimis" reporting exception for third‑party settlement organizations (payment processors/platforms) so they only file information returns for a participating payee’s third‑party network transactions when the payee’s transactions exceed $10,000 in value or 50 transactions. It also applies the same two-part de minimis rule to determine when payments through these networks are treated as reportable for backup withholding purposes, with a one‑year carryover exception. The changes take effect for transactions or calendar years beginning after December 31, 2024.