Posted in Business & Corporate Law,Tax Law & IRS Defense

You have probably used payment apps like Venmo or Zelle to transfer money to a friend or make a payment to a business. Think of these payment apps as a faster way to transfer money when compared to prior formats such as PayPal or Stripe. Recently, there was a provision in the American Rescue Plan Act of 2021 that reduced the threshold for these type of transactions from $20,000 or 200 transactions to $600 without regard to the number of transactions, resulting in businesses receiving Form 1099-K’s (and the IRS also receiving the tax form). This new law allows for increased potential for businesses to be audited if they do not correctly report their earnings.