“The Biden administration has also changed the IRS standards to start tracking every financial transaction by Americans over $600, including CashApp, Venmo and PayPal,” Mr Scott said. “This is a shameless invasion of American privacy. This is what we saw in Communist China.”
Democrats are also on the defensive about the law, with some, including Sen. Maggie Hassan of New Hampshire, calling for changes to the law. her legislation, Cut Red Tape in Online Selling Laws, will change the law so that online sellers will not receive tax forms showing their sales until those transactions exceed $5,000. She warned that “unnecessary confusion created by unnecessary tax forms could burden Granite Staters with undue taxation.”
Lobbyists representing online sales and payments platforms have engaged in a last-minute pressure campaign to persuade lawmakers to include such changes in a year-end spending plan lawmakers are expected to pass this week. But it was unclear whether there was enough political support to roll back the measure.
Arshi Siddiqui, a partner at law firm Akin Gump, representing a coalition of businesses trying to change the new tax requirements, said she expected as many as 50 million taxpayers to get new tax returns for the first time because of the measures in the U.S. rescue package.
“If Congress doesn’t act, we’re going to see a tsunami of 1099s hitting people who are going to be confused,” Ms Siddiqui said, adding that she thought the Treasury Department might change or delay its own.
The Treasury Department declined to comment for this story.
Sen. Ron Wyden of Oregon, the Democratic chairman of the Senate Finance Committee, spoke with Treasury Secretary Janet Yellen this week, telling her the IRS must improve its communications with taxpayers about the new requirements and explain more clearly which transactions will be taxable.
“There is a great deal of confusion about this rule, and the IRS needs to provide taxpayers with more clarity as soon as possible,” Mr. Wyden said in a statement, in which he recounted a conversation with Ms. Yellen.