The claim: Borrowed funds exceeding $600, deposited via smartphone apps, would be taxed under a new bill
A proposal from the Department of the Treasury aimed at decreasing tax avoidance has become the subject of misinformation online.
One Facebook post claims the “new tax bill” would tax transactions exceeding $600 on smartphone apps like PayPal and Venmo.
“That means if you borrow money using any of those things over $600 that money will be taxed again,” reads the Sept. 20 post, which was shared more than 1,300 times in four days. “You know who deposits $600 or more into their bank account from outside sources to help them survive? The poor and middle class.”
The Treasury proposal would change reporting requirements to account for transactions made on smartphone apps. But the claim that it would levy new taxes is wrong.
“It looks like (the proposal) is just extending to more entities the obligation to report transactions exceeding $600,” Karen Brown, a tax law professor at George Washington University, told USA TODAY in an email. “It places these bank surrogates in the same position as others. It is clearly an anti-tax avoidance measure.”
Proposal doesn’t suggest new tax
The Facebook post misconstrues a Treasury proposal that suggests broadening financial reporting to “improve tax compliance.”
In May, the Treasury proposed requiring financial institutions to report to the Internal…