The Internal Revenue Service IRS has introduced a new legislation aimed at clamping down on ticket scalpers who have profited more than $600 from reselling tickets for high-demand events such as those featuring Beyoncé and Taylor Swift.
Under this new IRS regulation, companies like Ticketmaster and StubHub are now required to report any customers who have sold over $600 worth of resale tickets in the year 2023. Previously, companies were mandated to issue a 1099-K form to users who had earned more than $20,000 through 200 or more transactions within a year.
New IRS Reporting Rules and the Impact on Ticket Resales
The IRS stated in a press release, “Payment apps and online marketplaces are mandated to file a Form 1099-K if the gross payments for goods and services exceed $600. This $600 reporting threshold has been in effect since the tax year 2023, and there have been no alterations to what qualifies as income or how taxes are calculated.
This updated law, a part of the American Rescue Plan Act, mandates sellers to pay taxes on their profits generated from ticket resales.
This development comes in response to the frustration of fans who were left dismayed when tickets for Beyoncé’s Renaissance tour and Taylor Swift’s Eras tour were swiftly acquired by scalpers. The resale prices for Swift’s tour on StubHub averaged a staggering $1,095, while Beyoncé’s tickets reached heights of up to $900. Similarly, for Drake and 21 Savage’s It’s All A Blur tour, ticket resale prices surged past $800.
Swift’s tour in particular brought widespread attention to the issue of exorbitant ticket resale prices. During the presale, fans encountered difficulties with Ticketmaster’s website, which prevented them from purchasing tickets. When the issue was finally resolved, the only available tickets were the expensive resale options.
Expressing her frustration on Instagram, Swift stated, “I’m not going to make excuses for anyone because we asked them, multiple times, if they could handle this kind of demand and we were assured they could.”
Ticketmaster attributed the issue to the activities of bots, and for the Renaissance tour, the company implemented a tiered system for ticket purchases. Additionally, due to the rapid sellout of many shows, more dates were added to the world tour.
Travis Scott faced a similar situation when tickets for his Circus Maximus Tour sold out within minutes. In response, he added 11 new tour dates, including second performances in cities like Dallas and Atlanta, to accommodate the overwhelming demand.