PayPal, eBay Gear Up for 1099-K Headaches While Chasing a Fix

E-commerce giants like eBay Inc. and Venmo are preparing to send a flood of additional forms to taxpayers while still holding out hope that lawmakers and the IRS will act fast to help avoid the inevitable resulting confusion.

Millions more people selling online will receive a tax form for their business transactions beginning in January, the first step toward implementing a 2021 law that drastically lowered the threshold for these companies to report to the IRS information about users receiving over $600 in revenue a year. The previous threshold was $20,000 and 200 transactions.

While the new threshold doesn’t ...