(NewsNation) — It was a summer of record-breaking ticket sales for live events. From Taylor Swift to Lionel Messi, fans shelled out thousands to see their favorite stars in person.
Scalpers made huge profits by selling their tickets for exorbitant prices, and now the IRS wants a piece of the pie.
A new tax regulation enacted under the American Rescue Plan Act says anyone who receives over $600 from a settlement organization like Venmo, CashApp, Ticketmaster or StubHub will now have to report those earnings to the IRS.
This change comes in the wake of big-name concerts in 2023, including Beyonce’s “Renaissance Tour” and Taylor Swift’s “The Eras Tour.”
The average ticket for Swift’s tour sold for just under $1,100 on StubHub and $1,600 on SeatGeek. The best seats sold for exponentially more.
In the past, ticket sellers only had to report earnings if they made more than $20,000 and at least 200 transactions a year.
Now, if anyone makes $600 or more, their earnings will be reported to the IRS, regardless of how many transactions.
Anyone who eclipses that $600 threshold can expect to receive a 1099-K tax form. This applies to everything from concert tickets to a side hustle on Etsy or Venmo. It is not meant to include reimbursements.
The Wall Street Journal reported the IRS is bracing for up to 44 million of these forms for the 2023 tax year, which will be roughly four times as many as the agency received in 2021.
The $600 threshold was supposed to take effect in time for spring 2023 tax returns, but the IRS delayed it in December amid confusion.
When the change was first approved, Treasury Secretary Janet Yellen said it was aimed at cracking down on tax cheats and the wealthy.
But Republicans blasted the new rules as government overreach.
Earlier this year, the House Ways and Means Committee approved a bill that would restore the old $20,000 threshold. Senators Sherrod Brown and Bill Cassidy also proposed a bipartisan effort to raise the threshold to $10,000, but those efforts have so far stalled in Congress.