Today, in Notice 2023-10, the IRS announced a delay in the new reduced reporting threshold for section 6050W applicable to third-party settlement organizations (TPSOs). Section 9674(a) of the American Rescue Plan Act of 2021 amended section 6050W(e) to provide that, for returns for calendar years beginning after December 31, 2021, a TPSO is required to report payments in settlement of third party network transactions with respect to any participating payee that exceed a minimum threshold of $600 in aggregate payments, regardless of the aggregate number of such transactions. Prior to the change, the threshold was $20,000 and 200 transactions.
On March 11, 2021, President Biden signed the American Rescue Plan Act of 2021 (the “ARPA”) into law. The ARPA includes clarifying language regarding the scope of Form 1099-K (Payment Card and Third Party Network Transactions) reporting for third party payment networks and a change to the de minimis reporting standard applicable to third party settlement organizations (“TPSOs”) effective for returns required to be filed for 2022.
Continue Reading American Rescue Plan Act Clarifies Scope of Form 1099-K Reporting and Reduces De Minimis Threshold
The IRS released a modified private letter ruling superseding a ruling issued in late 2015 under Section 6050W. That ruling had determined that the party requesting the ruling was a third-party settlement organization. The new ruling does not change the conclusion, but removes one rationale upon which the earlier ruling had based its determination.