The Biden administration has faced backlash from small-business owners who called the new I.R.S. reporting requirements confusing and onerous.
For the second time in a year, the Internal Revenue Service is delaying enforcement of a contentious tax policy that would require users of digital wallets and e-commerce platforms to start reporting small transactions to the tax collection agency.
The I.R.S. said on Tuesday that it would slowly phase in the new policy, which would require individuals and small businesses to report digital transactions of as little as $600 to the federal government.
The new reporting requirement was supposed to take effect late last year, but the Biden administration abruptly postponed it following pressure from lobbyists and backlash from users of services such as Venmo, PayPal, Cash App, StubHub and Etsy.
The head of the Internal Revenue Service said the decision to delay the rule again stemmed from concern of higher tax bills among those who used digital wallets.