Bill · S. 1425· Senate(119-S-1425)
Red Tape Reduction Act of 2025
- Introduced
- 4/10/2025
- Last activity
- 4/10/2025 — Read twice and referred to the Committee on Finance.
- Sponsored by
- Bill Cassidy
- Cosponsors
- - 0 - 1
- Introduced
- In Committee
What this bill would do
This bill is called the Red Tape Reduction Act of 2025. It was introduced in the Senate by Mr. Cassidy and Ms. Hassan on April 10, 2025. The bill amends the Internal Revenue Code of 1986. It changes the rules for reporting payments made by third-party settlement organizations. Specifically, it reinstates the exception for small payments as it was before the American Rescue Plan Act. The changes apply to transactions settled and calendar years beginning after December 31, 2024.
Yes
Would business owners be better off under this?+3
Reduces regulatory and reporting burdens for settlement organizations.
Does this make it easier to run a small business?+3
Reduces administrative and reporting burdens for third party settlement organizations.
The opposite
No question was scored the opposite.
Who it would affect, and how
Potential Positive Impacts for People
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Section 2: This section reinstates the exception for small payments by third-party settlement organizations. It means reporting is only required if the amount exceeds $10,000 or if the number of transactions exceeds 50. This is positive because it reduces reporting burdens for everyday people engaging in occasional online transactions.
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Section 3: This section applies the small payment rule to backup withholding for third-party network transactions. Payments are only treated as reportable for backup withholding if both the transaction count exceeds 50 and the dollar amount exceeds $10,000. This is positive as it protects everyday individuals from unnecessary tax withholding on small transactions unless specific thresholds are met.
Potential Negative Impacts for People
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Section 2: Under this section, third-party settlement organizations are not required to report information unless transactions exceed $10,000 or the number of transactions exceeds 50. This might be considered negative by those who believe all small earnings should be tracked closely by the government.
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Section 3: This section states that backup withholding rules do not apply to third-party network transactions unless the aggregate amount exceeds $10,000 and the transaction count exceeds 50, or if payments were reportable in the preceding year. This could be viewed negatively if it creates confusion regarding which small transactions are ultimately subject to tax withholding rules.
Groups and Interests Ranking
Every group the model scored this bill for, from -10 to +10. Hover a score for the reason it gave.
- Demographic And Interest Groups
- Good For Business Owners+3
- Economy And Finance
- Improves Small Business Support+3
- 4/10/2025
- Read twice and referred to the Committee on Finance.
- 1 Cosponsor added.
- Introduced in Senate
2 bills Congress.gov lists as related to this one — companions in the other chamber, earlier versions, and bills this one absorbed or was folded into.
Maggie HassanDemocrat · New Hampshire