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@PATAX wrote:

@Just-Lisa-Now- Lisa, I think Rick is talking about Virginia 1099-k forms? I didn't know the different states had their own 1099-k forms and/or rules?

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Correct!  I think how the VA law reads is that if the issuer is issuing a 1099-K to an address in VA the threshold is $600.  Does everybody know that?  I doubt it.  But ebay, paypal, and airbnb seem to know it.  One of my clients sold some of the hockey tickets from his season pass on one of the online "Stubhub" type sites and got a 1099-K in the $600-$1,000 range.

I have to give the folks in Richmond some credit for this.  VATax doesn't have a huge budget for state tax audits (for the most part VA individual tax returns start at federal AGI).  But there is a checkbox on the VA return for you to indicate that your federal return has been audited or amended and if you check that box it wakes up somebody in Richmond so they can go looking for an amended VA return.  They still audit state credits and such, but they rely heavily on the IRS to audit income and deductions.  I think there's also some sort of communication system that notifies VA when the IRS makes changes to a return as a result of an audit.

Anyway, all this to say, with VA lowering the threshold that means the ebay, venmo, etc. folks are filing more 1099-K forms WITH THE IRS who then does document matching on them and notifies VA of anyone they catch (usually meaning more revenues for VATax while shifting the audit costs to the IRS, pretty clever).

Rick