SNOOP Act of 2025

This bill amends the Internal Revenue Code to reinstate the pre-American Rescue Plan Act reporting threshold for third party settlement organizations, requiring them to report payments to a payee only if the total amount exceeds $20,000 and the number of transactions exceeds 200 in a calendar year. It also applies this de minimis rule to backup withholding for third party network transactions.

Sec. 2, Reinstatement of exception for de minimis payments: This section changes the reporting requirement for third party settlement organizations under tax code section 6050W(e) so that they must report third party network transactions for a payee only if the total payments exceed $20,000 and the number of transactions exceeds 200. The change takes effect as if it were included in the American Rescue Plan Act.

Sec. 3, Application of de minimis rule for third party network transactions to backup withholding: This section adds a new rule to backup withholding rules under tax code section 3406(b). Payments from third party network transactions are treated as reportable payments for backup withholding only if the aggregate number of transactions exceeds 200 and the aggregate amount exceeds $20,000 for the calendar year. However, this exception does not apply if the payee had reportable payments from such transactions in the prior year. This applies to calendar years starting after December 31, 2024.