Renowned singer Beyoncé has taken legal action against the Internal Revenue Service (IRS), contesting a $3 million tax deficiency imposed on her for alleged underpayment on her 2018 and 2019 tax returns. The dispute encompasses additional taxes and penalties asserted by the IRS, amounting to substantial sums.
Beyoncé’s petition to challenge the IRS claims asserts that the agency erred in disallowing significant deductions, particularly disputing the disqualification of a charitable contribution carryover from 2018. Originally scheduled for May, the trial addressing the matter has been postponed, with the parties instructed to file a status report or proposed stipulated decision by July 5, 2024.
According to documents signed by Judge Maurice B. Foley, the IRS contends that Beyoncé owes an additional $805,000 in taxes and $161,000 in penalties for the tax year 2018. For 2019, the IRS claims additional taxes of $1.4 million along with $288,000 in penalties. Interest will continue to accrue on these amounts until the debt is resolved, as detailed in Beyoncé’s petition filed last April.
In addition to Beyoncé’s legal battle, individuals receiving income exceeding $600 from settlement organizations such as Venmo or Ticketmaster are now subject to a new tax reporting requirement. Implemented under the American Rescue Plan Act, this change eliminates the previous threshold of over $20,000 in earnings and 200 transactions annually, obliging anyone with income above $600 to report it to the IRS.
The IRS anticipates a surge in the issuance of 1099-K forms due to this regulatory adjustment, projecting approximately 44 million forms for the 2023 tax year. Efforts to raise the reporting threshold back to $20,000 through legislative measures are underway in Congress, though progress remains pending on this front.
