Part 4/8:
The IRS’s decision to delay the enforcement of the lowered threshold is unusual and reflects a strategic concern about the overwhelmed processing system. According to the IRS statement, the delay is intended to “reduce confusion during the upcoming 2023 tax filing season” and to give taxpayers more time to understand the new reporting requirements. An overload of nearly 12 million forms could have posed operational challenges, and the agency appears to prefer a phased approach to implementation.
By postponing the full enforcement for a year, the IRS aims to prevent chaos and ensure taxpayers have sufficient guidance, thus avoiding potential penalties or misreporting due to confusion over the new threshold rules.