Congress quietly rolls back IRS income reporting for payment processors
S. 1375 — SNOOP Act of 2025 · Filed by Bill Hagerty (R-TN) · 8 cosponsors · Introduced Apr 9, 2025 · Referred to committee
Your members of Congress
Enter a ZIP to see where your representative and both senators stood on this bill.
Looked up on this device — your ZIP is never stored on our servers.
What it does
This bill raises the threshold for when payment processors must report third-party transactions to the IRS. Currently, processors must report all transactions over $600; this bill reinstates a pre-2021 rule requiring reporting only when a payee receives more than $20,000 AND more than 200 transactions in a year. The effect is to reduce IRS visibility into small-business and gig-worker income, making it easier for some income to go unreported.
Why we flagged it
The bill's operative mechanism is a straightforward increase in the dollar and transaction thresholds for third-party payment reporting under IRC §6050W. It is not hidden, but the title 'SNOOP Act' is a political framing device that misdirects from the actual effect: reducing IRS reporting requirements, not protecting privacy from government surveillance.
What the text implies
- The $20,000/$200-transaction threshold creates a structural incentive for high-income earners and businesses to fragment transactions or use multiple payment processors to stay below reporting thresholds, effectively legalizing income-hiding strategies.
- Gig workers, freelancers, and small-business owners with income between $600 and $20,000 will face reduced IRS oversight but also reduced ability to prove legitimate income for loans, mortgages, and other credit applications — a hidden cost to the working poor.
- The backup withholding amendment (Section 3) creates a carve-out: if a payee was reportable in the prior year, they remain reportable in the current year even if they fall below the threshold. This creates a 'sticky' reporting status that may disproportionately affect workers whose income fluctuates.
- Payment processors (the named beneficiaries of reduced reporting burden) will face lower compliance costs and reduced regulatory scrutiny, but the IRS loses real-time visibility into a major source of unreported income — a structural shift in tax enforcement capacity.
Section numbers refer to the bill text the analysis read — linked under Primary records below.
Who it affects
Ordinary citizens and small businesses benefit from reduced IRS scrutiny, but the public as a whole loses tax revenue and enforcement capacity. The bill primarily serves payment processors and high-income earners who can structure transactions to stay below reporting thresholds, while shifting the tax compliance burden to lower-income workers and small businesses that cannot easily hide income. The net effect is regressive: it reduces the IRS's ability to audit and collect taxes owed, widening t
Who stands to gain
- payment processors and third-party settlement organizations
- high-income earners and businesses able to structure transactions below thresholds
- insurance and financial services companies (mapped stocks: AIG, FBK, FMAO, PFG, PRU)
Named in the bill
Internal Revenue Service (IRS), Third-party settlement organizations, Payment processors, AIG, FBK, FMAO, PFG, PRU, American Rescue Plan Act, IRC Section 6050W, IRC Section 3406
Where it stands
8 cosponsors: 8 Republicans.
- Apr 9, 2025 — Introduced · Congress.gov: “Introduced in Senate”
- Apr 9, 2025 — Referred to Senate Committee on Finance · Congress.gov: “Read twice and referred to the Committee on Finance”
Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.
Money around this bill
1 lobbying clients named this bill on 1 disclosure filings across 1 quarter, Jun 2026 to Jun 2026. Those filings disclosed $920,000 in lobbying spend. A filing names 19 bills on average, so that figure is what each filing reported, not a share belonging to this bill.
More lobbying clients named this bill than 0% of bills with at least one filing.
Bill Hagerty, the sponsor, reported $1,618,141 in PAC receipts in the 2026 cycle.
- Sanofi Us Services Inc — $920,000 on 1 filing
Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.
How this was measured
Analysis — Quorum's AI read the bill text published by Congress.gov (2,413 characters) on Aug 12, 2026. Section numbers in the findings refer to that text, linked below; transparency and hidden-provision scores are compared against the median of 16,222 analysed bills.
Status and sponsors — Congress.gov's bill record — actions, committee referrals and cosponsors — loaded nightly. The timeline shows status changes, not every procedural action.
Money — Senate Lobbying Disclosure Act filings whose specific-issue field names this bill for quarters ending Jun 2026 to Jun 2026. A filing's amount is reported whole beside the median number of bills a filing names; it is never divided across them. PAC receipts are FEC-reported contributions to the sponsor's candidate committee in the 2026 cycle.
As of — lobbying records through Jul 20, 2026 · page rendered 2026-10-20.
“Congress quietly rolls back IRS income reporting for payment processors” QuorumCivic. https://share.quorumcivic.app/bill/119/s1375 Report an error
The week in bills
One email, Sunday: what Congress passed, what it changed, and who paid.
One link arrives to confirm the address. It is used for this email and nothing else, and every issue carries an unsubscribe link.