The IRS Grants a Harassment Reprieve

With one hand Democrats doled out bountiful transfer payments, and with the other they pursued unsuspecting taxpayers. The low $600 mandate was intended to target Americans who use the platforms on occasion to, say, rent out their homes or sell homemade wares. But it also could ensnare countless Americans who use peer-to-peer payment services to reimburse friends for a night out or send a birthday gift in lieu of cash.

While the IRS claimed its goal wasn’t to track personal transactions, good luck to payment platforms trying to distinguish these from actual payments that constitute income. The mandate threatened to create a morass for taxpayers, accountants, platforms and the IRS, which would have been drowned with questions during filing season.

Members of both parties in Congress have argued for increasing the threshold or abolishing the mandate, but too many Democrats support it because they want the IRS to have more information and power to harass taxpayers. That’s part of their plan to close the supposed $1 trillion gap between what they say Americans pay and owe in taxes.

The IRS defends the mandate as “hugely important” to ensure tax compliance but said on Friday that to “ensure clarity for taxpayers, tax professionals and industry, the I.R.S. will delay implementation of the 1099-K changes” for a year. The mandate was passed nearly two years ago, and the IRS has been warning taxpayers about it for months.

The Biden Administration is trying to calm a public uproar we’ve been happy to encourage, and the White House doesn’t want to be blamed by Americans who get caught in the IRS dragnet. This is reminiscent of what happened with ObamaCare, another law Democrats jammed through without giving a second thought to its consequences.

The IRS in 2013 delayed enforcement of the ObamaCare employer mandate by a year amid an outcry from business, and it lightly enforced the requirement that individuals carry health insurance or pay a fine. But the threat of IRS enforcement continued to hang over Americans until the GOP zeroed out the penalty. The $600 reporting mandate will do the same unless Congress can muster the will to repeal it.