Form 1099-K

[4] In the Housing and Economic Recovery Act of 2008, a new requirement was laid out for banks and credit card merchants to report payments to the IRS.

[9][10] Payment settlement entities must send Form 1099-K to the IRS by the last day of February of the year following the relevant transactions, or if filing electronically, by April 1.

[11] If a payment settlement entity has more than 250 individual information returns to file in any calendar year, they all must be submitted electronically.

In this case Form 1099-MISC needs to be issued only when the total amount paid during the tax year is at least $600.

However, with this provision, a party getting paid through payment card and/or third-party payment network transactions, seeking to avoid paying taxes, can simply opt to avoid meeting either the 200 transaction or $20,000 minimum threshold needed to file Form 1099-K.[5] Even if a party doesn't seek to avoid paying taxes, if they don't meet either threshold criteria for filing Form 1099-K, they simply may receive neither a Form 1099-K from the payment settlement entity nor a Form 1099-MISC from the payer.