A provision that was slipped into the American Rescue Plan requires individuals to receive IRS tax forms for the sale of used goods, even when sales of those goods are nontaxable. With inflation rising and millions of us struggling to get by, Congress must fix this issue.

Section 9674 of the American Rescue Plan – added without hearing or debate – reduced the reporting threshold for online marketplaces such as eBay, Etsy and Facebook Marketplace from $20,000 in annual payments and 200 transactions, to $600 and no transaction count.

This means that individuals and families cleaning out their attics or selling outgrown baby clothes will now receive a 1099-K tax form. This will cause confusion and overreporting of nontaxable income for millions of Americans already struggling because of the pandemic. This change also threatens to limit the availability of lower-cost used goods for essential items American families need.

Let’s say you bought a computer several years ago for $1,800. You want to sell it for $600 because you need money to get your car fixed. You’ve searched high and low, but you can’t find the original purchase receipt. Under the new law, you’ll receive a 1099-K and you’ll need to prove to the IRS that you didn’t make a profit. Without the receipt, you can’t prove anything.

Legislation has been introduced by both Democrats and Republicans to raise the reporting threshold (HR 7079 in the House; S.3840 in the Senate). I urge Sens. Angus King and Susan Collins and Reps. Chellie Pingree and Jared Golden to cosponsor this legislation and support bipartisan efforts to raise the threshold.

Adrian Dowling
South Portland

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