IRS Signals Crackdown on Gig Workers

In a sign that the Internal Revenue Service may crack down on gig workers, the agency has received permission from a federal court to collect information on US taxpayers who receive compensation through the platform from JustAnswer LLC.

California federal District Court Judge Dolly Gee approved the agency’s request, known as a John Doe subpoena, seeking information about a group of individuals the government has not yet identified by name or other means. The challenge seeks information on people who were paid $5,000 or more to answer questions on the JustAnswer platform in any year from 2017 to 2020.

“As the gig economy has grown in recent years, so has the concern about tax compliance issues,” Deputy Assistant Attorney General David Hubbert said at the Justice Department. press release. “This John Doe subpoena shows that by working with the IRS, we will use every tool at our disposal to ensure that US taxpayers, regardless of how they earn their income, properly report it and pay their taxes.” Those who choose to be at the forefront of the gig economy should be aware of and comply with all tax obligations.”

JustAnswer did not immediately respond to a request for comment.

Given the decentralized and diverse nature of the work, accurate information about gig workers is difficult to obtain. But requests The number of workers showed that many participants in the gig economy earn less than the minimum wage in the state where they work.

While the DOJ and IRS did not say they were seeking John Doe subpoenas for other platforms, the press release name-checked several other gig platforms, including Airbnb, Uber, Lyft, DoorDash and Etsy.

In November, the IRS issued a new management To the job platforms, which instruct the agency to report information on taxpayers who earn more than $5,000 in 2024, $2,500 in 2025, and $600 in 2026 and thereafter.

Previously, gig platforms only had to report to the IRS for employees who earned more than $20,000 and completed at least 200 transactions. The new limits are designed to make it harder for gig workers to avoid paying tax on their income.

“Like their fellow Americans who earn income in traditional ways, U.S. taxpayers who earn income from the digital and other platforms that make up the big economy must pay their fair share of taxes,” said IRS Commissioner Danny Werfel. “The world is shrinking for tax fraud and we will work with our partners to strictly enforce the country’s tax laws.”