The SNOOP Act would raise the threshold for reporting payment transactions to the IRS from the current standard down to only those exceeding $20,000 in annual payments and 200 transactions. This bill targets third-party payment settlement organizations like PayPal, Venmo, and Cash App, which currently must report smaller payment volumes to tax authorities under rules implemented by the American Rescue Plan Act. The legislation would primarily affect small businesses, freelancers, and gig workers who use these platforms, as well as the payment processing companies themselves, by reducing their compliance burden. The bill would take effect retroactively as if it were part of the original American Rescue Plan legislation, with the backup withholding provision applying to calendar years beginning after December 31, 2024. No specific funding is allocated in the bill, as it modifies existing IRS reporting requirements rather than creating new programs.
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