When Congress passed the American Rescue Plan Act in March, it made a little-noticed change in the tax reporting rules that will make it almost impossible for independent contractors and other businesses to hide their income from the IRS by receiving electronic payments.
The big change takes effect in 2022, but there’s much to know now.
Third-Party Information Reporting
The government knows this universal truth: taxpayers are much less likely to report all their income on their tax returns when the IRS has no way of independently verifying their income. That’s where third-party information reporting (such as 1099s) comes in.
The IRS has a series ... Log in to view full article.