The IRS has proposed updates to its regulations governing when third-party settlement organizations (TPSOs)—such as PayPal, eBay, and Venmo—must apply backup withholding. These changes are intended to align the regulations with amendments made under the One Big Beautiful Bill Act.
Under the proposed rules, TPSOs generally would not be required to perform backup withholding on payments settled through third-party payment networks unless, in a calendar year, a payee’s gross amount of reportable payment transactions exceeds $20,000 and the number of transactions exceeds 200.
The proposed regulations are open for public comment and requests for a public hearing through March 10, 2026. Have questions? The Cg Team can help. © 2026