The rise of the gig economy has resulted in more people who work for companies like Uber Technologies Inc., Lyft Inc., and Etsy Inc. not paying taxes on that income, a government watchdog said.
- In a review of nine well-known gig economy businesses, Treasury Inspector General for Tax Administration identified 264,346 cases with potentially underreported payments on IRS Form 1099-K in tax years 2012 through 2015
- The number of discrepancies between information on gig workers’ income tax returns and payments reported to the Internal Revenue Service by companies like Uber and Lyft increased 237 percent in those years, TIGTA said in the report, released Feb. 19
- Certain gig economy businesses don’t have to issue Form 1099-K unless workers earn at least $20,000 and engage in at least 200 transactions annually—workers thus don’t get the form and their income isn’t reported
- TIGTA recommended steps to remedy the problem, including changing the third-party reporting thresholds, but Treasury said that change would require congressional action