Sen. Bill Hagerty, a Tennessee Republican, introduced the Stop the Nosy Obsession with Online Payments Act on Tuesday to eliminate a tax code provision in President Joe Biden’s American Rescue Plan that would mandate third-party payment processors report business transactions of users exceeding $600.
Prior to Biden’s American Rescue Plan, third-party payment platforms, including Venmo, PayPal, and Cash App, were only required to report the gross income of payees who had over 200 distinct transactions that exceeded $20,000 to the Internal Revenue Service.
Under the president’s new tax provision, which went into effect last month, thousands of small businesses will be forced to file 1099-Ks with personal information to the IRS.
This places a large number of people at risk given “the IRS’ poor history of safeguarding Americans’ personal data,” according to a press release shared exclusively with the Washington Examiner.
“The Biden Administration is relentless in their attempt to invade the privacy of Americans’ lives and finances,” Hagerty said.
“It is regrettable that this Administration insists on advancing their perilous and oppressive political agenda to the detriment of taxpayers’ privacy, heedless of their failed track record of protecting Americans’ confidential data. It is past time we stand up for our small business owners and say ‘no more snooping’ to this administration’s egregious and unwarranted overreach.”
The Tennessee Republican and member of the Senate Banking Committee is leading the push for the SNOOP Act with a group of GOP senators determined to stymie the Biden administration’s “intrusive” policymaking that they said hinders small businesses and makes life harder for taxpayers.
The president’s current tax code drives up the cost of business for small businesses and independent contractors, raising taxes on the very people Biden promised he would not burden, Sen. Rick Scott, a Florida Republican, said.
“Along with trillions in unnecessary and unrelated spending in their so-called ‘COVID’ spending package, Biden and the Democrats snuck in a tax increase on gig workers, like hardworking Americans that drive for Uber, Lyft or DoorDash,” Scott said. “Meanwhile, Democrats refuse to acknowledge the inflation and supply chain crisis. Let me be clear: reckless spending is causing inflation, and further increasing costs and regulations on already-struggling Americans only makes things worse. I want to thank Senator Hagerty for continuing our fight in protecting working-class families, and I urge my colleagues for their support of the SNOOP Act.“
Democrats have used measures such as the American Rescue Plan to grant the federal government the power to affect and interrupt the day-to-day activities of the public, according to Sen. Kevin Cramer, a North Dakota Republican.
“The federal government should not be able to snoop on taxpayers’ personal transactions,” he said. “Our bill will undo their plans to spy on Americans’ personal finances and violate their privacy.”
Sen. Marco Rubio, a Florida Republican, echoed Cramer’s sentiment.
“The Biden Administration’s total disregard for privacy has to be stopped. There is no reason that the IRS should be putting Americans’ confidential transactions under a microscope. I will continue to fight for taxpayer privacy and push back against this gross overreach of federal power,” Rubio said.
The new tax law affecting third-party payment platforms, the $600 rule, will apply to all payments received for service payments and goods.
The provision only gives Democrats in Washington, D.C., another tool to pry into law-abiding small businesses’ financial accounts, Sen. Joni Ernst, an Iowa Republican, argued.
“The Biden administration is working overtime to implement their radical far-left agenda and, in turn, to make life more difficult for Iowans and everyday Americans,” she said.
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“I’m proud to join my colleagues in standing up for taxpayer privacy and pushing back against this federal overreach.”