Red Tape Reduction Act of 2025

This bill simplifies tax reporting for businesses using third-party payment platforms (like Venmo or PayPal). It reinstates a $10,000 annual transaction value threshold and a 50-transaction limit for reporting payments to the IRS, meaning businesses only need to report payments that exceed either threshold. It also extends this rule to backup withholding requirements and adds an exception: if a business was already reporting payments in the previous year, they don’t need to report again this year unless their transaction volume changes significantly. The bill directly affects businesses and payment processors handling third-party network transactions, reducing administrative burdens for smaller transactions.