Well, no problem, you can just tell the IRS that Venmo is wrong, right?
Oh, no. That would be too easy. According to the IRS: “Those who receive a 1099-K reflecting income they didn’t earn should call the issuer. The IRS cannot correct it.”
So if Venmo or PayPal mischaracterizes your nontaxable gifts as taxable income, you have to try to get Venmo or PayPal to change things. Good luck with that. You may wind up having to pay an accountant hundreds or thousands of dollars to straighten out the mess or face an IRS audit.
The threshold used to be $20,000 but was lowered to $600 as part of the Democrats’ American Rescue Plan Act. (No Republicans voted for this monstrosity.) The legislation tightened the screws on the little guy, and that was no accident.
As The Post editorialized in June, “Think about this the next time Elizabeth Warren and AOC whine about the wealthy not paying their share. Yet the legislation they passed goes after hobbyists and little folks trying to earn a few bucks in various side hustles. It’s only going to punish the US economy a bit more: Some will have to charge more to make the work worthwhile; others will quit now that it means more paperwork and taxes.”