Swifties and members of the Beyhive who resold tickets for more than $600 this year are in luck — the Internal Revenue Services is now postponing its ticket resale reporting requirements to 2024.
Earlier this year, the IRS announced that ticket companies would have to report if customers sold more than $600 in resale tickets in 2023. Previously, ticketing sites only had to send a 1099-K form to sellers who made more than $20,000 through 200 or more transactions.
However, the IRS announced this week that they would delay the new $600 reporting threshold requirement for the tax year of 2023 following feedback from taxpayers, tax professionals, and payment processors. To “reduce taxpayer confusion,” the IRS plans to “phase in” the new law with a significantly higher threshold of $5,000 in 2024. Fans and resellers can still expect to see a change in the future, however, as the IRS still plans on inching closer to the $600 threshold limit in due time.
“The agency is making 2023 another transition year to implement the new requirements under the American Rescue Plan that changed the Form 1099-K reporting threshold for payments taxpayers get selling goods or providing a service over $600,” the IRS said. “The previous reporting thresholds will remain in place for 2023.”
When news first broke of the $600 threshold, many fans were sent into a frenzy. The updated law followed highly sought-after tours this year including Taylor Swift and Beyonce — which saw a huge increase in fan ticket resellers. For the first time, StubHub found that fans, rather than brokers, accounted for about 70% of ticket orders on The Eras Tour — double the proportion of what the company normally sees, per the Wall Street Journal.
Fans were listing tickets for thousands of dollars, along with tickets to see global sensation Lionel Messi take the field with Inter Miami CF, amid Ticketmaster’s ongoing dynamic and platinum pricing policies. Many fans gathered up more tickets than necessary — after spending hours waiting in online queues amid the Swift Ticketmaster fiasco — knowing that they’d probably never get the chance to score tickets again. This led to a massive amount of recirculating tickets.
TickPick told the WSJ that they expected to give out at least 10 times as many 1099-K forms than previous years, and the IRS estimated it would receive 44 million of these forms in 2024.
While the IRS did not offer an explanation for the increase in threshold requirements, many opposed the $600 rule; the House Ways and Means Committee approved a bill earlier this year that would see the law restore its original threshold of only reporting if resellers sold more than $20,000. A bipartisan bill was also introduced in the Senate that fell between both options, with a threshold of $10,000 and 50 transactions.
Florida CFO Jimmy Patronis called-out the IRS, writing that the new law is “targeting Taylor Swift fans.” He called the regulation an “overreach from the government,” noting that “the deep state has found yet another way to screw over the honest, hard-working taxpayers by digging deeper into your wallets.” Treasury Secretary Janet Yellen said the change was intendedx to crack down on the wealthy and those who cheat on their taxes, but Patronis and other legislators said the regulation targeted individuals and small businesses.
“Taylor Swift is her own economic development engine and has done more good for the economy than Biden ever will,” Patronis said. “In this economy, people do everything they can to afford record-high inflation. If for some unforeseen circumstance occurs and you have to resell your concert tickets, you should be able to do so without any repercussions.”
Find out more about the IRS’ requirements for the 2023 tax year here.
