S. 123 – BAD IRS Activities Act

AI-Generated Summary

Updated January 20, 2026 at 2:34 AM UTC

The bill aims to ease reporting requirements for small businesses, gig workers, and freelancers by changing the transaction‑reporting threshold set under the American Rescue Plan Act of 2021. It raises the amount and transaction count that trigger reporting for third‑party settlement organizations, and it also cancels certain unspent IRS funding provided by recent legislation. The changes affect taxpayers who use payment platforms and the IRS’s enforcement and operations budget.

Key Provisions

Amends the reporting rule for third‑party settlement organizations so they must report only if a payee’s transactions exceed $20,000 and more than 200 transactions, effective for tax years after 2021.
Cancels the unobligated balances of IRS enforcement and operations support funds allocated under section 10301 of Public Law 117‑169, effective immediately upon enactment.

Legislative Activity

Stay on top of the latest movement without scrolling through every action

2 earlier actions

SenateCalendars Latest Action

Read the second time. Placed on Senate Legislative Calendar under General Orders. Calendar No. 8.

January 30, 2023

View full timeline

SenateIntro Referral

Introduced in Senate

January 26, 2023

SenateCalendars

Introduced in the Senate. Read the first time. Placed on Senate Legislative Calendar under Read the First Time.

January 26, 2023

SenateCalendars

Read the second time. Placed on Senate Legislative Calendar under General Orders. Calendar No. 8.

January 30, 2023

Floor Debate

2 members

What members said about S. 123 on the floor

2 Democrats

Sen. Brian SchatzD-HI · Jan 26, 2023

Mr. President, I understand there is a bill at the desk, and I ask for its first reading. I now ask for a second reading, and in order to place the bill on the calendar under the provisions of rule…

Sen. Charles E. SchumerD-NY · Jan 30, 2023

Madam President, I understand there is a bill at the desk due a second reading. In order to place the bill on the calendar under the provisions of rule XIV, I would object to further proceedings.

Bill Text

Latest available legislative text

Reading Mode

Raw Text PDF XML

Placed on Calendar SenateIssued January 30, 2023

II

Calendar No. 8

118th CONGRESS

1st Session

S. 123

IN THE SENATE OF THE UNITED STATES

January 26, 2023

Mr. Scott of Florida (for himself, Mr. Budd, Mr. Braun, and Mr. Johnson) introduced the following bill; which was read the first time

January 30, 2023

Read the second time and placed on the calendar

A BILL

To protect American small businesses, gig workers, and freelancers by repealing the burdensome American Rescue Plan Act of 2021 transactions reporting threshold, and to rescind certain funding provided to the Internal Revenue Service under section 10301 of Public Law 117–169.

1.

Short title

This Act may be cited as the Blocking the Adverse and Dramatic Increased Reliance on Surveillance Activities Act or the BAD IRS Activities Act.

2.

Repeal of modifications of exceptions for reporting of third party network transactions

(a)

In general

Section 6050W(e) of the Internal Revenue Code of 1986 is amended to read as follows:

(e)

Exception for de minimis payments by third party settlement organizations

A third party settlement organization shall be required to report any information under subsection (a) with respect to third party network transactions of any participating payee only if—

(1)

the amount which would otherwise be reported under subsection (a)(2) with respect to such transactions exceeds $20,000, and

(2)

the aggregate number of such transactions exceeds 200.

.

(b)

Effective date

The amendment made by this section shall apply to returns for calendar years beginning after December 31, 2021.

3.

Rescission of certain funds for enhanced Internal Revenue Service resources

Effective on the date of enactment of this Act, the unobligated balances of the amounts made available under the following provisions of Public Law 117–169 are rescinded:

(1)

Internal Revenue Service enforcement funds

Section 10301(1)(A)(ii).

(2)

Internal Revenue Service operations support

Section 10301(1)(A)(iii).

January 30, 2023

Read the second time and placed on the calendar