Federal

BAD IRS Activities Act

Source: Congress.gov · 572 words in original text

What This Bill Does

This bill repeals a reporting requirement from the American Rescue Plan Act of 2021 that affects small businesses, gig workers, and freelancers. It also cancels unspent money that was given to the Internal Revenue Service for enforcement activities and operational support.

Who It Affects

Small businesses, gig workers (people who do short-term jobs for multiple employers), freelancers (self-employed workers), and the Internal Revenue Service (the federal agency that collects taxes).

Key Provisions

- Third party settlement organizations (companies that process payments for multiple businesses) will only have to report payment information to the IRS if the total amount of transactions exceeds $20,000 AND there are more than 200 transactions in a year (Sec. 2) - The unspent money given to the IRS for enforcement activities is cancelled and will not be available to spend (Sec. 3) - The unspent money given to the IRS for operational support is cancelled and will not be available to spend (Sec. 3)

What Changes

Payment processors will no longer have to report transactions below the $20,000 threshold or with fewer than 200 transactions. Money previously allocated to the IRS for enforcement and operational support will no longer be available.

Important Definitions

Third party settlement organization: a company that processes payments between businesses and their customers or contractors.

Effective Date

The reporting threshold change applies to tax returns for calendar years beginning after December 31, 2021 (Sec. 2). The IRS funding cancellation takes effect on the date the bill becomes law (Sec. 3).

II Calendar No. 8 118TH CONGRESS 1ST SESSION S. 123 To protect American small businesses, gig workers, and freelancers by repeal- ing the burdensome American Rescue Plan Act of 2021 transactions reporting threshold, and to rescind certain funding provided to the Inter- nal Revenue Service under section 10301 of Public Law 117–169. IN THE SENATE OF THE UNITED STATES JANUARY 26, 2023 Mr. SCOTT of Florida (for himself, Mr. BUDD, Mr. BRAUN, and Mr. JOHNSON) introduced the following bill; which was read the first time JANUARY 30, 2023 Read the second time and placed on the calendar A BILL To protect American small businesses, gig workers, and free- lancers by repealing the burdensome American Rescue Plan Act of 2021 transactions reporting threshold, and to rescind certain funding provided to the Internal Rev- enue Service under section 10301 of Public Law 117– 169. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 22:48 Jan 30, 2023 Jkt 039200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S123.PCS S123 kjohnson on DSK79L0C42PROD with BILLS 2 •S 123 PCS SECTION 1. SHORT TITLE. 1 This Act may be cited as the ‘‘Blocking the Adverse 2 and Dramatic Increased Reliance on Surveillance Activi- 3 ties Act’’ or the ‘‘BAD IRS Activities Act’’. 4 SEC. 2. REPEAL OF MODIFICATIONS OF EXCEPTIONS FOR 5 REPORTING OF THIRD PARTY NETWORK 6 TRANSACTIONS. 7 (a) IN GENERAL.—Section 6050W(e) of the Internal 8 Revenue Code of 1986 is amended to read as follows: 9 ‘‘(e) EXCEPTION FOR DE MINIMIS PAYMENTS BY 10 THIRD PARTY SETTLEMENT ORGANIZATIONS.—A third 11 party settlement organization shall be required to report 12 any information under subsection (a) with respect to third 13 party network transactions of any participating payee only 14 if— 15 ‘‘(1) the amount which would otherwise be re- 16 ported under subsection (a)(2) with respect to such 17 transactions exceeds $20,000, and 18 ‘‘(2) the aggregate number of such transactions 19 exceeds 200.’’. 20 (b) EFFECTIVE DATE.—The amendment made by 21 this section shall apply to returns for calendar years begin- 22 ning after December 31, 2021. 23 VerDate Sep 11 2014 22:48 Jan 30, 2023 Jkt 039200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S123.PCS S123 kjohnson on DSK79L0C42PROD with BILLS 3 •S 123 PCS SEC. 3. RESCISSION OF CERTAIN FUNDS FOR ENHANCED 1 INTERNAL REVENUE SERVICE RESOURCES. 2 Effective on the date of enactment of this Act, the 3 unobligated balances of the amounts made available under 4 the following provisions of Public Law 117–169 are re- 5 scinded: 6 (1) INTERNAL REVENUE SERVICE ENFORCE- 7 MENT FUNDS.—Section 10301(1)(A)(ii). 8 (2) INTERNAL REVENUE SERVICE OPERATIONS 9 SUPPORT.—Section 10301(1)(A)(iii). 10 VerDate Sep 11 2014 22:48 Jan 30, 2023 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S123.PCS S123 kjohnson on DSK79L0C42PROD with BILLS Calendar No. 8 118TH CONGRESS 1ST SESSION S. 123 A BILL To protect American small businesses, gig workers, and freelancers by repealing the burdensome American Rescue Plan Act of 2021 transactions reporting threshold, and to rescind certain fund- ing provided to the Internal Revenue Service under section 10301 of Public Law 117–169. JANUARY 30, 2023 Read the second time and placed on the calendar VerDate Sep 11 2014 22:48 Jan 30, 2023 Jkt 039200 PO 00000 Frm 00004 Fmt 6651 Sfmt 6651 E:\BILLS\S123.PCS S123 kjohnson on DSK79L0C42PROD with BILLS

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