SB 1375, the “Stop the Nosy Obsession with Online Payments Act of 2025” or “SNOOP Act of 2025,” would roll back a reporting change made by the American Rescue Plan Act for third-party settlement organizations and payment networks. Under current law, platforms that process payments for users can be required to issue tax information returns for relatively small amounts; this bill would restore the prior de minimis threshold, under which reporting is required only when a participating payee has more than $20,000 in gross payments and more than 200 transactions in a calendar year.
The bill also amends the Internal Revenue Code’s backup withholding rules so that payments in settlement of third-party network transactions are treated as reportable payments only when the same reporting thresholds are exceeded. It further includes a retroactive-style effective date for the reporting change, treating it as if it had been included in the American Rescue Plan Act, and applies the withholding-related amendment to calendar years beginning after December 31, 2024.
Impact
If enacted, SB 1375 would narrow federal information-reporting obligations for payment apps, online marketplaces, and other third-party settlement organizations, reducing the number of users whose transactions must be reported to the IRS. It would also limit related backup withholding treatment for these transactions, affecting how payors and platforms administer tax compliance. The bill would amend sections 6050W and 3406 of the Internal Revenue Code and would effectively restore the pre-ARPA reporting threshold for third-party network transactions.
Sentiment
The bill’s title and structure suggest a strongly pro-taxpayer, anti-surveillance posture, reflecting concern about expanded IRS reporting of online payments. Because there were no committee transcripts or recorded votes provided, there is no direct evidence of debate or bipartisan support in the available record. The measure appears to be framed as a rollback of what supporters likely view as overly broad reporting requirements.
Contention
The main point of contention is the scope of IRS reporting for digital payment platforms and whether the lower reporting threshold adopted under the American Rescue Plan should remain in place. Supporters of the bill are likely to argue that the current rules are intrusive and burdensome for ordinary users and platforms, while opponents would likely emphasize tax compliance, enforcement, and reducing underreporting of income. The backup withholding provision may also draw attention because it ties withholding obligations to the same reporting threshold, potentially affecting platform administration and taxpayer privacy.
Saving Gig Economy Taxpayers Act This bill modifies requirements for third party settlement organizations to eliminate their reporting requirement with respect to the transactions of their participating payees unless they have earned more than $20,000 on more than 200 separate transactions in an applicable tax period. A third party settlement organization is the central organization that has the contractual obligation to make payments to participating payees (generally, a merchant or business) in a third party payment network. This reverses a provision in the American Rescue Plan Act of 2021 that lowered the reporting threshold to $600 with no minimum on the number of transactions.