Someone tried to tip the valet in my garage with Venmo once. It turned into a near 20-minute ordeal with half a dozen people backed up behind her waiting to get their cars.
As a double advantage, it ensures the workers tips are 1099-K'd when their venmo hits $600 aggregate and they can't weasel out of the social contract of paying up for muh roads.
This is, as far as I know, only true if you use the business "mode" in venmo. I certainly take in a lot more than $600 in aggregate per year via venmo (passthrough rent), and don't get a 1099-k.
Slight correction: it is true if the sender marked that payment as for "goods and services" on the confirmation screen[0]. When you are about to make a venmo transaction, there is a toggle for it. Afaik, it is fully up to the sender.
1) That makes sense because the $600 threshold has never existed before. The first time this will ever be reported at this threshold is this year. According to Secretary Yellen the threshold was lowered to $600 because people earning that much are high-income billionares that need held accountable.
2) In non-business "mode" it's still not your choice if the sender tags it as 'goods or service.'
3) Customers and Workers may be wary to potentially violate ToS by defrauding Venmo and/or the IRS by falsely tagging a transaction that there is an easily electronically auditable record of. Venmo ToS explains your account may be terminated and funds 'held' if you do this, and tons of random people sending you money on a regular schedule is easily identifiable as not 'friends and family.' This is far easier to trace than someone spending putting $200 in singles in a drawer at the end of the night and spending $20 x 10 at the grocery store.
4) Your 'pass-through' rent situation is far less falsely identifiable as goods and services income. 2000x people sending $5 over a year is far more identifiable to a computer than the exact same few people sending you $1k a month or whatever. A very large number (high hundreds to thousands) of nodes sending small amounts over the course of the year easily 'sniffs out' someone providing goods/services and can be bet on to be found out by Venmo compliance sooner or later.
