What This Bill Does
This bill changes the tax reporting rules for payments made through online payment networks. Specifically, it removes stricter reporting requirements that were created by the American Rescue Plan Act of 2021. The bill makes it so companies processing online payments report fewer transactions to the government.
Who It Affects
Third party settlement organizations (companies that process payments from one person or business to another through online platforms).
Key Provisions
• Third party settlement organizations only have to report payment information if the total amount of payments exceeds $20,000 in a calendar year (Sec. 2(a))
• Third party settlement organizations only have to report payment information if there are more than 200 separate transactions in a calendar year (Sec. 2(a))
• A conforming amendment removes reference to certain subsections in the tax code (Sec. 2(b))
What Changes
The threshold for when payment companies must report transaction information to the government goes back to requiring both a minimum dollar amount of $20,000 and a minimum of 200 transactions. Previously, stricter reporting rules applied to more transactions.
Important Definitions
Third party settlement organization: a company that processes payments between buyers and sellers or between individuals through online payment networks.
Effective Date
The main reporting change applies to tax returns for calendar years beginning after December 31, 2021 (Sec. 2(c)(1)). The second amendment applies to transactions after the American Rescue Plan Act of 2021 was enacted (Sec. 2(c)(2)).
II
118TH CONGRESS
1ST SESSION
S. 26
To amend the Internal Revenue Code of 1986 to repeal the amendments
made to reporting of third party network transactions by the American
Rescue Plan Act of 2021.
IN THE SENATE OF THE UNITED STATES
JANUARY 23 (legislative day, JANUARY 3), 2023
Mr. HAGERTY (for himself, Ms. LUMMIS, Mr. CRUZ, Mr. HOEVEN, Mr.
CRAMER, Mr. KENNEDY, Mr. BARRASSO, Mr. LANKFORD, and Mr.
BRAUN) introduced the following bill; which was read twice and referred
to the Committee on Finance
A BILL
To amend the Internal Revenue Code of 1986 to repeal
the amendments made to reporting of third party net-
work transactions by the American Rescue Plan Act
of 2021.
Be it enacted by the Senate and House of Representa-
1
tives of the United States of America in Congress assembled,
2
SECTION 1. SHORT TITLE.
3
This Act may be cited as the ‘‘Stop the Nosy Obses-
4
sion with Online Payments Act of 2023’’ or the ‘‘SNOOP
5
Act of 2023’’.
6
VerDate Sep 11 2014
04:29 Jan 26, 2023
Jkt 039200
PO 00000
Frm 00001
Fmt 6652
Sfmt 6201
E:\BILLS\S26.IS
S26
pbinns on DSKJLVW7X2PROD with $$_JOB
2
•S 26 IS
SEC. 2. REPEAL OF MODIFICATION OF EXCEPTIONS FOR
1
REPORTING
OF
THIRD
PARTY
NETWORK
2
TRANSACTIONS.
3
(a) IN GENERAL.—Section 6050W(e) of the Internal
4
Revenue Code of 1986 is amended to read as follows:
5
‘‘(e) EXCEPTION FOR DE MINIMIS PAYMENTS BY
6
THIRD PARTY SETTLEMENT ORGANIZATIONS.—A third
7
party settlement organization shall be required to report
8
any information under subsection (a) with respect to third
9
party network transactions of any participating payee only
10
if—
11
‘‘(1) the amount which would otherwise be re-
12
ported under subsection (a)(2) with respect to such
13
transactions exceeds $20,000, and
14
‘‘(2) the aggregate number of such transactions
15
exceeds 200.’’.
16
(b)
CONFORMING
AMENDMENT.—Section
17
6050W(c)(3) of the Internal Revenue Code of 1986 is
18
amended
by
striking
‘‘described
in
subsection
19
(d)(3)(A)(iii)’’.
20
(c) EFFECTIVE DATE.—
21
(1) IN
GENERAL.—The amendment made by
22
subsection (a) shall apply to returns for calendar
23
years beginning after December 31, 2021.
24
(2) CLARIFICATION.—The amendment made by
25
subsection (b) shall apply to transactions after the
26
VerDate Sep 11 2014
04:29 Jan 26, 2023
Jkt 039200
PO 00000
Frm 00002
Fmt 6652
Sfmt 6201
E:\BILLS\S26.IS
S26
pbinns on DSKJLVW7X2PROD with $$_JOB
3
•S 26 IS
date of the enactment of the American Rescue Plan
1
Act of 2021.
2
Æ
VerDate Sep 11 2014
04:29 Jan 26, 2023
Jkt 039200
PO 00000
Frm 00003
Fmt 6652
Sfmt 6301
E:\BILLS\S26.IS
S26
pbinns on DSKJLVW7X2PROD with $$_JOB