What is not trivial for small businesses? They do not have to do the reporting. They are liable for the same amount of taxes they were prior to the reporting requirement update.

I meant the overhead in accounting, paperwork etc. I would argue the "tax burden" goes beyond just the financial to also include the paperwork etc.

For a person on the cusp, making a $600 a year may help. Now, erode that with the additional costs of filing (both financial and time) can make it no longer worthwhile.

You do understand, that this doesn't increase the accounting and paperwork required for the Etsy seller?

The requirement is for Etsy to provide the 1099 to report income that the Etsy seller already should have been reporting on their income tax return (hopefully along with corresponding expenses to offset that income).

In fact, the whole point of this requirement is to make it easier for small sellers to properly report their income to the I.R.S., because now they don't have to dig through a year's worth of receipts to figure out how much they made from what source.

Thank you, I think I was thrown off by the whole “mom-and-pop” debate and your comment makes much more sense.

Do you have an alternative proposal to implementing income taxes then? Other than having the government have a record of every single transaction for everyone and automatically sending everyone with less than $x of incoming transactions a letter stating they do not owe income tax, I do not see a fair way of making sure people pay their taxes without having reporting and filing requirements.

The alternative is that the person that goes and gets a W-2 job for $600 has a mechanism which forces them to pay taxes, but the person that does odd jobs and gets paid here and there via an app has no mechanism to force them to pay taxes. How is that fair?

If you made $599 in 2021 via Venmo, you still owed taxes. The only difference now is that Venmo sends you a 1099k. The lack of that document didn't free you from the tax obligation on income, it just made it easier to avoid paying the tax.

Edit: after reading your other comment downthread I see you may have initially thought it was the small business doing the reporting, rather than the payment platform. Leaving comment for the benefit for others, since there seems to be a misconception that this creates a new tax obligation.