When Congress passed the Inflation Reduction Act last year Republicans were up in arms about two things: the name of the legislation seemed like a misnomer since it would add immensely to the federal deficit and the fact that the bill approved $80 billion for the Internal Revenue Service to hire an additional 87,000 employees.
As part of the rollout of the bill the Biden Administration's media push made it clear that the extra manpower would be used to go after the highest earners, not everyday people.
Related: Tax cheats need to beware of a new IRS enforcement tool
“I direct that any additional resources – including any new personnel or auditors that are hired – shall not be used to increase the share of small business or households below the $400,000 threshold that are audited relative to historical levels,” Treasury Secretary Janet Yellen said in 2022.
But now, a new law kicking in that requires ticketing platforms like Ticketmaster and Live Nation (LYV) -) provide the IRS with information on users who sold more than $600 worth of tickets this year makes what Yellen said moot.
Previously, those platforms were required to send 1099-K forms if one of their users received more than $20,000 in revenue and had more than 200 transactions on the platform. But that rule was changed as part of the American Rescue Plan Act crafted by Democrats and passed in 2021.
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The law was scheduled to take effect for tax year 2022, but the IRS paused implementation until this year. The IRS commissioner has no plans to delay implementation any further, the Wall Street Journal reported, and the forms covering the current tax year are expected to be sent in early 2024.
The crackdown comes at a time when people are making a lot of money reselling concert tickets, driving up the price of those tickets in the process.
Fan sellers accounted for about 70% of U.S. ticket orders for Taylor Swift's "Eras Tour," double the proportion StubHub normally sees, according to the Journal. Those seats were going for $1,095 on average on StubHub.
IRS Commissioner Danny Werfel has been speaking at tax forums across the country, preparing Americans for the change. “One of my main messages was: The threshold has changed from $20,000 to $600 and it goes live this year,” he told reporters.
Sellers will only owe the government if they made a profit on the sale.
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