IRS Signals a Coming Crackdown on Gig Workers

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

Federal District Court Judge Dolly Gee in California approved the agency’s request, known as a John Doe summons, which seeks information about a group of individuals not already identified by name or other means by the government. The subpoenas seek information about those who received $5,000 or more for answering questions on the JustAnswer platform in any one year from 2017 to 2020.

“The gig economy has grown in recent years, and with it, concerns for tax compliance issues have grown,” said David Hubbert, deputy attorney general at the Justice Department. Press release. “This John Doe summons shows that working with the IRS we will use all the tools available to us to ensure that US taxpayers, regardless of their income, are accurately reporting and paying their taxes. Those who choose to be at the forefront of the gig economy must be aware of and comply with all their tax obligations.”

JustAnswer did not immediately respond to a request for comment.

Due to the decentralized and varied nature of work, precise information about gig workers is difficult to obtain. but survey Among workers, it has been found that many participants in the gig economy earn less than the minimum wage in the state in which they work.

While the DOJ and IRS have not indicated that they are seeking John Doe subpoenas for other platforms, the press release name-checks other gig-working platforms, including Airbnb, Uber, Lyft, DoorDash and Etsy.

In November, the IRS issued new guidelines Directs gig work platforms to report information to the agency about taxpayers who earn more than $5,000 in 2024, more than $2,500 in 2025 and more than $600 in 2026 and beyond.

Previously, gig platforms were only required to report information to the IRS for those who earned more than $20,000 and completed at least 200 transactions. The new thresholds are designed to make it harder for gig workers to avoid paying taxes on their income.

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