The New IRS Rule on Ticketmaster Scalping: What You Need to Know

Ticket scalping has long been a contentious issue in the live entertainment industry. While some see it as a free-market practice, others argue that it unfairly inflates ticket prices and deprives genuine fans of the chance to see their favorite artists. Amid this ongoing debate, the Internal Revenue Service (IRS) has introduced a new rule that could significantly impact the ticket resale market. This article delves into the details of this new IRS rule and its implications for both ticket resellers and consumers.

The New Rule

According to the Washington Examiner, the IRS will now collect data from sellers on ticketing platforms like Ticketmaster and StubHub who sell more than $600 worth of event tickets. These sellers will have to fill out a 1099-K form, and the IRS will determine which resellers made profits to declare it as taxable income. Those who resold their tickets at a loss will not be allowed to deduct that loss.

Key Points:

• The $600 threshold is new and was introduced under the American Rescue Plan by President Joe Biden.
• Previously, the IRS only monitored reselling data of those who had over 200 transactions and boasted profits of over $20,000.
• The new threshold aligns with gig work platforms like DoorDash, Uber, and Amazon, regardless of the number of transactions a reseller completes.

Implications for Resellers

The new rule aims to bring more transparency and accountability to the ticket resale market. Resellers will now have to be more cautious about their activities, as they will be under the IRS’s radar once they cross the $600 threshold. This could deter casual scalpers but may not have a significant impact on professional ticket brokers.

Implications for Consumers

For consumers, the new rule could be a double-edged sword. On one hand, it may discourage scalping, leading to more tickets being available at face value. On the other hand, the added tax burden on resellers could be passed on to consumers in the form of higher ticket prices.

Controversies and Criticisms

The new rule has not been without its critics. Some argue that it is a form of government overreach, while others believe it may not effectively curb scalping. A bill is currently in the House Ways and Means Committee attempting to restore the old 1099-K threshold of $20,000, which would also apply to gig work (source).

The new IRS rule on ticket scalping is a significant development that could reshape the ticket resale market. While it aims to bring more transparency, its effectiveness in curbing scalping and its impact on consumers remains to be seen. As the rule is relatively new, its long-term implications are still unclear, and it will be interesting to see how it plays out in the coming months.

Disclaimer: This article is for informational purposes only and does not constitute legal or financial advice.