"Tax Bomb Awaits Reselling 'Taylor Swift Tickets'... US IRS Says 'We're Watching Closely'"

Taylor Swift, Lionel Messi, and Others Resale Controversy
National Tax Service: "People Profiting from Resale Will Be Taxed"

The U.S. Internal Revenue Service (IRS) has started cracking down on the practice of reselling high-priced concert tickets, known as 'resell.' Going forward, the agency plans to identify such sellers and impose taxes on them.

The Wall Street Journal (WSJ) reported on the 22nd (local time) that "the IRS will identify individuals who resell tickets for concerts and other events priced over $600 (approximately 800,000 KRW) on online platforms for profit and collect taxes accordingly."

The related law was originally scheduled to take effect for the 2022 tax year. The IRS temporarily suspended its implementation until 2023 but has stated that there will be no further extensions.

Taylor Swift performing on the 'Eras Tour'
[Image source=Captured from Taylor Swift's official Twitter]

This measure comes amid ongoing controversies surrounding ticket sales for major events in the U.S., such as pop star Taylor Swift's concerts and soccer player Lionel Messi's matches. The increase in scalpers profiting from resales is having a significant negative impact on the related industries.

Because tickets for popular concerts or games are so hard to obtain, many buyers purchase them at a premium price from other fans with the intention of making a profit. Fans who really want to attend the events often have no choice but to buy these tickets reluctantly.

As a result, the average price for Swift's 'Eras Tour' concerts reaches $1,095 (approximately 1.5 million KRW). Seats with good views can be traded for thousands of dollars. After Messi joined the U.S. professional soccer Major League Soccer (MLS), tickets for his team Inter Miami's games jumped from the original $30 to $255 (about 350,000 KRW).

According to the ticket platform StubHub, ticket resales surged notably this year. For the 'Eras Tour,' 'fan sellers'?individuals who are not professional ticket sellers?accounted for about 70% of all orders. This is double the usual rate.

Lionel Messi playing in Major League Soccer (MLS), the professional soccer league in the United States.
[Photo by Yonhap News]

Under the new law effective from the 2023 tax year, ticket sales platforms such as StubHub and Ticketmaster must provide the IRS with information about sellers. This is part of the American Rescue Plan Act (ARP Act) led by Democrats in early 2021 in response to COVID-19.

Previously, these platforms only submitted tax reporting forms '1099-K' for sellers with more than 200 transactions or total sales exceeding $20,000 (approximately 27 million KRW) per year.

However, going forward, the threshold will be drastically lowered to a total of $600 regardless of the number of transactions. The reporting requirement will be based on the sales price, not the seller's profit. Tax collection will only occur if the seller resells the ticket at a price higher than the purchase price and makes a profit.

The IRS estimates that it will receive about 44 million reports next year under the new law, which is four times the 11.1 million reports in 2021.

This content was produced with the assistance of AI translation services.