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IRS Issues New Guidance on Transition Relief for Third-Party Settlement Organizations

Mobile payment with wallet app and wireless nfc technology. Man paying and shopping with smartphone application and credit card information. Digital money transfer, banking and e commerce concept.

On November 26, 2024, IR-2024-299 was issued by IRS – this notice provides guidance on transition relief for third-party settlement organizations (also known as payment apps and online marketplaces) regarding transactions during calendar years 2024 and 2025. Click here to view Notice 2024-85.

  • 2024 reporting: transactions more than $5,000
  • 2025 reporting: transactions more than $2,500
  • 2026 reporting: transactions more than $600

Additionally, the announcement provided that for calendar year 2024, the IRS will not assert penalties under section 6651 or 6656 for a TPSO’s failure to withhold and pay backup withholding tax during the calendar year.

If you have any questions about this IRS notice and the tax changes it details, contact us today.

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