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Small‑business advocates tell committee that 1099‑K reporting thresholds create confusion and burden
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Summary
Accountants and small‑business representatives urged Congress to revisit recent changes to 1099‑K and 1099 reporting thresholds, saying the lower $600 threshold for some payment types and declining thresholds for marketplace reporting will create compliance burdens and unintended reporting for casual sellers. Witnesses asked for higher thresholds
Several witnesses told the House Ways and Means Committee that recent changes to third‑party payment reporting thresholds (commonly discussed as 1099‑K and 1099‑Ks) pose a compliance burden for small sellers and small businesses.
Lisonbee Couch testified that the $600 1099‑NEC threshold has not been adjusted for decades and urged a one‑time inflation adjustment and an annual indexing approach. She also cited marketplace reporting thresholds that moved from $20,000/200 transactions to much lower dollar thresholds in recent years and said the change risks creating unnecessary forms for casual sales and nonbusiness family transactions.
Members from both parties raised the issue: Republicans framed it as an undue burden on gig and small sellers; Democrats and some committee staff urged balancing fraud prevention and taxpayer simplicity. Several members said they would reintroduce or support bills to restore prior threshold levels or provide clearer guidance to IRS and payment platforms. The committee asked staff to prepare options that reduce compliance burden while preserving enforcement.
The hearing produced no votes on 1099‑related legislation; staff follow‑up was requested.
