The study suggested that the IRS release clearer guidelines for companies below the $20,000 threshold for filing 1099Ks to ease confusion and encourage a uniform response by the platform-based companies. Etsy, Airbnb and Lyft all inform service providers that they only report income if the $20,000 and 200 transaction threshold is reached, the study noted, but Uber sends every one of its drivers a 1099K and reports their income to the IRS, regardless of income earned.
The study said the current system ill-serves the millions of people who earn income from the platforms, by exposing them to possible audit and penalties for misreporting their income.
“At best, these small business owners are shortchanged when filing their taxes,” the study said. “at worst, they fail to file altogether.”