The Philadelphia Eagles will play the Kansas City Chiefs on Sunday in the 57th Super Bowl . Football fans across the country will be traveling to the game, calculating fantasy football payouts, or betting on the outcome. But because of a little-known yet devastating tax provision in the American Rescue Plan, this year’s Super Bowl will be the last before football fans, and tens of millions of Americans will be taxed on money they don’t owe.
Moving forward, any e-commerce transaction platform will be forced to send tax forms to anyone who has received $600 in one year. If, for example, someone Venmo’s you $1,000 to buy their Super Bowl ticket or you’re a fantasy football commissioner collecting over $600 in buy-in money and then sending it to the winner, Venmo will be required to send you an extremely complicated tax form. The IRS will claim you owe taxes that you don’t, opening you up to the possibility of an audit from the 87,000 new IRS agents President Joe Biden hired last year.
Another example: If you and your friends go out for a post-Super Bowl party — because win or lose, there’s a lot to celebrate by being in Phoenix in February — and you put the bill on one card, and it adds up to $601, you’ll receive a 1099-K form next spring that will require you to report your ‘earnings’ — when the reality is you just went out with your friends. You didn’t earn $601 from a business deal; you were getting paid back the money you had already spent.
Before the American Rescue Plan passed, the reporting threshold for e-commerce platforms was $20,000 earned and more than 200 transactions in one year. That was a reasonable rule that didn’t force regular Americans to pay taxes on small transactions. With this new law, the government is effectively treating every American like a small business, even though that’s obviously not the case.
This changed provision is purely a budget gimmick to fund an outrageous spending package that led to record-high inflation. That’s why when the American Rescue Plan Act was introduced two years ago, I immediately introduced the Saving Gig Economy Taxpayers Act to protect millions of sports fans, fantasy football commissioners, and average Americans from paying taxes they don’t owe.
This rule should not apply to regular Americans who use apps like Venmo or PayPal for convenience.
As a member of the Ways and Means Committee, which deals directly with tax policy, I can promise this bill would stop Biden’s ridiculous tax provision. Even the IRS inadvertently admitted the law is a terrible idea by extending the deadline for the change until next year. You know it’s a bad rule when the IRS doesn’t want to add more taxes.
The Super Bowl is just one example of how this new law would impact our everyday lives. The examples are endless. But there is an easy solution to this tax provision. Congress must pass H.R. 190, or the Saving Gig Economy Taxpayers Act, to protect regular Americans from becoming taxed like small businesses.CLICK HERE TO READ MORE FROM RESTORING AMERICA
Call your representative today and demand they co-sponsor the bill.
Carol Miller is a U.S. representative for West Virginia and a member of the Committee on Ways and Means.