H.R. 190, Saving Gig Economy Taxpayers Act

H.R. 190 would restore the thresholds for third-party settlement organizations to report certain payments to the Internal Revenue Service (IRS) to amounts in effect before the 2021 enactment of the American Rescue Plan Act (ARPA). Under the bill, reporting would be required for payees receiving $20,000 or more for 200 or more transactions in a year.

Third-party settlement organizations, including payment applications and online marketplaces, can arrange payments between buyers and sellers in commercial transactions. Those organizations report information, including payment totals and payees’ tax identification numbers, to the IRS using Form 1099-K, “Payment Card and Third-Party Network Transactions,” when payees’ total transactions for a year exceed certain thresholds. From 2012 to 2021, reporting was required for payees that received more than $20,000 from 200 or more transactions. In 2021, ARPA reduced the threshold to $600 with no requirement for the number of transactions. In calendar years 2022 and 2023, the IRS permitted third-party settlement organizations to delay implementation of that provision, keeping the $20,000 and 200-transaction threshold.

The Congressional Budget Act of 1974, as amended, stipulates that revenue estimates provided by the staff of the Joint Committee on Taxation (JCT) will be the official estimates for all tax legislation considered by the Congress. As such, CBO incorporates those estimates into its cost estimates of the effects of legislation. The estimates for the revenue provisions of H.R. 190 were provided by JCT.[1]

The estimated budgetary effect of H.R. 190 is shown in Table 1. The costs of the legislation fall within budget function 800 (general government).

For this estimate, CBO and JCT assume that the bill will be treated as if its provisions were included in ARPA. H.R. 190 would apply to tax returns for calendar years beginning after December 31, 2021. JCT estimates that enacting the bill would reduce revenues by $10 billion over the 2025‑2034 period because taxpayers would report less taxable income to the IRS.

CBO estimates that implementing the bill would increase costs for the Department of the Treasury by less than $500,000 over the 2025-2029 period. Any related spending would be subject to the availability of appropriated funds.

The CBO staff contact for this estimate is Ellen Steele. The estimate was reviewed by
John McClelland, Director of Tax Analysis.

Phillip L. Swagel

Director, Congressional Budget Office