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Red Tape Reduction Act of 2025
To amend the Internal Revenue Code of 1986 to modify the exception for de minimis payments by third party settlement organizations.
Summary
This bill modifies Internal Revenue Code reporting requirements for third-party settlement organizations such as payment processors. The bill reinstates an exception requiring these organizations to report payments to the IRS only if they exceed $10,000 or involve more than 50 transactions in a calendar year, reversing recent reductions in the reporting threshold. The bill also applies this same exception to backup withholding rules, meaning withholding is required only when aggregate transactions exceed both the $10,000 dollar amount and 50-transaction thresholds, with an exception if the payee had reportable transactions in the prior year. The changes are effective for transactions settled after December 31, 2024, and calendar years beginning after that date.
AI-generated plain-language summary of the bill text — neutral, and may be imperfect. See the full text below for the exact wording.
Sponsor (1)
- Sen. Cassidy, Bill [R-LA] (R-LA)
1 cosponsor
Money behind the sponsor
Top reported contributors to Bill Cassidy’s campaign committee (2024 cycle) — who funds the bill’s sponsor, not a claim about this bill. Data from FEC.
- ANDREESSEN HOROWITZ $59,100
- GENERAL ATLANTIC $37,700
- WELSH CARSON ANDERSON & STOWE $33,870
- OCHSNER HEALTH SYSTEM $33,250
- RA CAPITAL MANAGEMENT $30,200
Organizations whose employees gave the most — itemized individual contributions grouped by the donor’s reported employer (FEC Schedule A). Full finance for Bill Cassidy → · Outside spending →
Actions (2)
- Apr 10, 2025 Read twice and referred to the Committee on Finance. · senate
- Apr 10, 2025 Introduced in Senate
Similar bills (6)
Bills with similar text or summary — includes reintroductions across Congresses. Ranked by semantic similarity of the bill text (computed locally); a neutral discovery aid, not a claim the bills are duplicates.
Full text
IN THE SENATE OF THE UNITED STATES
April 10, 2025
Mr. Cassidy (for himself and Ms. Hassan) introduced the following bill; which was read twice and referred to the Committee on Finance
A BILL
To amend the Internal Revenue Code of 1986 to modify the exception for de minimis payments by third party settlement organizations.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the “Red Tape Reduction Act of 2025”.
SEC. 2. REINSTATEMENT OF EXCEPTION FOR DE MINIMIS PAYMENTS AS IN EFFECT PRIOR TO ENACTMENT OF AMERICAN RESCUE PLAN ACT.
(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 $10,000, or
“(2) the aggregate number of such transactions exceeds 50.”.
(b) Effective Date.—The amendment made by this section shall apply to transactions settled after December 31, 2024.
SEC. 3. APPLICATION OF DE MINIMIS RULE FOR THIRD PARTY NETWORK TRANSACTIONS TO BACKUP WITHHOLDING.
(a) In General.—Section 3406(b) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:
“(8) Other reportable payments include payments in settlement of third party network transactions only where aggregate transactions exceed reporting threshold for the calendar year.—
“(A) In general.—Any payment in settlement of a third party network transaction required to be shown on a return required under section 6050W which is made during any calendar year shall be treated as a reportable payment only if—
“(i) the aggregate number of transactions with respect to the participating payee during such calendar year exceeds the number of transactions specified in section 6050W(e)(2), and
“(ii) the aggregate amount of transactions with respect to the participating payee during such calendar year exceeds the dollar amount specified in section 6050W(e)(1) at the time of such payment.
“(B) Exception if third party network transactions made in prior year were reportable.—Subparagraph (A) shall not apply with respect to payments to any participating payee during any calendar year if one or more payments in settlement of third party network transactions made by the payor to the participating payee during the preceding calendar year were reportable payments.”.
(b) Effective Date.—The amendments made by this section shall apply to calendar years beginning after December 31, 2024. <all>
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