H.R.1882 - Saving Gig Economy Taxpayers Act (119th Congress)
Summary
H.R.1882, the "Saving Gig Economy Taxpayers Act," aims to amend the Internal Revenue Code of 1986 to reinstate the de minimis exception for payments made by third-party settlement organizations. This exception pertains to returns related to payments made via payment cards and third-party networks. The bill seeks to revert the reporting requirements to those in effect before the enactment of the American Rescue Plan Act.
Expected Effects
The bill's passage would raise the threshold for reporting third-party network transactions to over $20,000 and more than 200 transactions. This change would reduce the reporting burden on individuals and businesses involved in the gig economy and other similar ventures. It also adjusts backup withholding rules to align with the reinstated de minimis exception.
Potential Benefits
- Reduced Reporting Burden: Fewer individuals and businesses, particularly those in the gig economy, will be required to report income from third-party payment networks.
- Simplified Tax Compliance: Lowering the reporting threshold simplifies tax compliance for affected taxpayers.
- Economic Activity: Reduced compliance costs could stimulate economic activity within the gig economy.
- Fairness: Reinstating the de minimis exception may be viewed as fairer to those with relatively low transaction volumes.
Most Benefited Areas:
Potential Disadvantages
- Potential for Tax Evasion: A higher reporting threshold could create opportunities for underreporting income and tax evasion.
- Reduced Tax Revenue: The government may collect less tax revenue due to decreased reporting.
- Complexity: The interaction of the new rules with existing tax laws could create complexity.
Most Disadvantaged Areas:
Constitutional Alignment
The bill primarily concerns taxation, which falls under the purview of Congress as outlined in Article I, Section 8, Clause 1 of the Constitution (the power to lay and collect taxes). The bill does not appear to infringe upon any specific constitutional rights or protections. The power to set the rules for taxation is explicitly granted to Congress.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).