Red Tape Reduction Act of 2025

S. 1425, the Red Tape Reduction Act of 2025, would amend the Internal Revenue Code to modify tax reporting requirements for third-party settlement organizations like payment processors. Specifically, the bill would reinstate an exception for de minimis payments that existed before the American Rescue Plan Act, which had expanded reporting requirements. If enacted, the bill would change the threshold at which third-party payment processors must report transaction information to the IRS, potentially reducing paperwork and compliance burdens for these organizations and the businesses that use their services. The bill is currently in committee and has not yet been voted on by the full Senate.