Cash, Zelle and 1099-K: what the IRS actually sees

Zelle doesn't send a 1099-K

It's a bank-to-bank transfer, not a payment platform like PayPal, Venmo or Stripe. You won't get a form from Zelle, but that doesn't make the income invisible.

PayPal, Venmo, Stripe: the threshold is high again

The 2025 law restored the old threshold: a 1099-K is required when you receive more than $20,000 and more than 200 payments in a year. Below that there's no form, but the income is still taxable.

Where the IRS sees the money

In an examination they review your bank statements in full. Every unexplained deposit is treated as income until you prove otherwise.

Cash

Your bank reports every cash deposit over $10,000. Splitting deposits to stay under the threshold is a separate violation, even if the money itself is clean.

What isn't income

Transfers from relatives, loan repayments, splitting a restaurant bill. But if everything runs through the same account as your business, separating it during an examination will be hard.