WASHINGTON (KABC) -- Anyone being paid for their goods and services through apps like Venmo or Etsy just got a reprieve from the IRS.
The revenue service announced it would delay the implementation of a rule change that would have resulted in a virtual paper chase of tax forms going out by Jan. 31, 2023 to anyone using such apps for their business transactions.
The IRS has postponed it by a year.
The move follows concerns from the tax preparation community, the electronic transactions industry and some lawmakers.
Third-party settlement organizations will not be required to report transactions on a Form 1099-K to the IRS or the payee for the lower, $600 threshold amount. A business transaction that is taxable is defined as a payment for a good or service, including tips.
It used to be those platforms only had to issue you a 1099-K if you engaged in more than 200 business transactions for which you received total payments of more than $20,000 in a year.
"The IRS and Treasury heard a number of concerns regarding the timeline of implementation of these changes under the American Rescue Plan," said Acting IRS Commissioner Doug O'Donnell in a statement published on the IRS website. "To help smooth the transition and ensure clarity for taxpayers, tax professionals and industry, the IRS will delay implementation of the 1099-K changes. The additional time will help reduce confusion during the upcoming 2023 tax filing season and provide more time for taxpayers to prepare and understand the new reporting requirements."
The IRS also noted that the existing 1099-K reporting threshold of $20,000 in payments from over 200 transactions will remain in effect.
CNN contributed to this report.