The IRS has proposed updates to the regulations for when certain third-party settlement organizations (TPSOs), such as PayPal, eBay and Venmo, must perform backup withholding. The updates are needed to comply with changes under the One Big Beautiful Bill Act. The proposed regulations clarify that TPSOs generally aren’t required to perform backup withholding on payments settled through third-party payment networks unless the gross amount of reportable payment transactions to a payee exceeds $20,000 and the number of transactions exceeds 200 in a calendar year. The proposed regulations are open to comments and requests for a public hearing until March 10, 2026. Have questions? We can help.
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