This GIG related story is taken from a Bloomberg News report.
Posted May 23, 2016, 10:57 A.M. ET
The IRS has been so slow to adapt to the rapidly emerging peer-to-peer economy that billions of dollars in taxable income a year are probably going unreported every year, according to a study being delivered to Congress this week.
More than 2.5 million Americans earned income via on-demand platforms like Airbnb Inc., Etsy Inc. and Lyft Inc. in 2014, and the companies generated an estimated $15 billion in revenues. But the companies don’t withhold taxes on what they pay to people who provide services or sell items through their platforms. The companies are required to notify the IRS of that income, and send service providers a 1099-K form to file with their tax returns, if they earn at least $20,000 and have 200 or more transactions in a year.
Because much of the income earned in the platform economy is never reported to the IRS by the companies, it’s likely adding to the $194 billion per year that the IRS estimates the Treasury loses each year due to misreported individual business income. Caroline Bruckner, managing director of the Kogod Tax Policy Center at American University and author of the report, is scheduled to testify at a House Small Business Committee hearing tomorrow.