The IRS announced Tuesday it is delaying a controversial new requirement that will require people to report income in excess of $600 paid through apps such as Venmo.

The IRS said in a news release that the delay followed an outpouring of feedback from taxpayers and tax professionals. The agency said that as a result of the delay, taxpayers won’t have to file such a report unless they receive over $20,000 and had more than 200 transactions this year.

EXISTING HOME SALES FALL TO LOWEST LEVEL SINCE 2010 THANKS TO HIGH MORTGAGE RATES

“As the IRS continues to work to implement the new law, the agency will treat 2023 as an additional transition year,” the IRS said in a statement. “This will reduce the potential confusion caused by the distribution of an estimated 44 million Forms 1099-K sent to many taxpayers who wouldn’t expect one and may not have a tax obligation.”

The requirement was passed by Congress in 2021 and attracted a torrent of criticism from Republicans, who contended the $600 rule was unduly onerous for taxpayers. The push is part of a broader effort from Democrats to empower the IRS to collect more revenue through greater funding and resources.

The IRS had already delayed the provision's implementation once before, speaking to the complexity of implementing such a sweeping new rule.

The IRS said on Tuesday that, given the complexity of implementing the requirement, it was planning to peg the threshold at $5,000 for tax year 2024 as part of a gradual phase-in to implement the $600 reporting threshold.

The agency said it is also looking into updating certain tax forms and schedules to make the reporting process easier for taxpayers.

CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER

IRS Commissioner Danny Werfel said that after months of feedback, it has become clear that additional time is needed in order to implement the new reporting rule correctly. He said the phased-in approach would prevent unnecessary confusion.

“The IRS will use this additional time to continue carefully crafting a way forward to minimize burden,” Werfel said in a statement. “We want to make this as easy as possible for taxpayers. We will work to make the new reporting requirements easier for them, and we’ll work closely with third-party groups, tax professionals, and others to find the smoothest path to ensure compliance with the law.”