Venmo customers have expressed dissatisfaction with the app as a result of a new legal clause requiring the company to report commercial transactions worth more than $600 per year to the Internal Revenue Service.
In an interview with Fox News, one Venmo user stated, “Honestly, I’m using Venmo because there aren’t any taxes.” If the service “begins to charge taxes,” the user stated that he would no longer use it.
Third-party payment processors will be obliged to report a user’s business transactions to the Internal Revenue Service starting on January 1 if the total value of the transactions exceeds $600 for the year.
Previously, payment applications such as PayPal, Zelle, and Cash App were only required to send consumers Form 1099-K if their gross income surpassed $20,000, and they processed over 200 transactions in a calendar year.
Following the announcement of the move, Stuart Lopez, a busker, told Fox News: “Wow, that sucks.” He explained that he will continue to utilize cash since he “truly needs that money.”
“The Internal Revenue Service manages to find its way into everything,” the musician concluded. “They’re going to start telling me that I’m going to have to pay part of my money out of my cash sometime.”
Several people believe that the new regulation has altered the very purpose of apps such as Venmo.
Among the many advantages of using Venmo, according to another user interviewed by Fox News, is the fact that it is really convenient and that you do not have to worry about recording or keeping track of things for tax purposes. Using it becomes significantly less convenient as a result of this.”
Another woman agreed, saying, “That’s a little far-fetched, really… That wasn’t the objective; it just makes things a whole lot less handy in the meantime.”
According to a resident of Philadelphia, “it’s rather simple to accrue up to $600, and figuring out how to pay tax on that amount appears to be complicated and time-consuming.”
It was the American Rescue Plan Act, which was passed by Democrats in March, that included the modification to tax regulations. Some people believe the law, which applies only to charges for commercial goods or services, was a good idea. Others disagree.
“It’s unavoidable,” a man told Fox News in an interview. “The government is required to maintain track of all money, and they are phasing out the use of paper money.” Venmo is “replacing” PayPal as a payment method.
Therefore, “it’s excellent for the government, but horrible for everyone else,” the man explained further.
Another Philadelphian expressed a similar sentiment.
According to him, “it makes sense to maintain watch on the economy.”