Banks and credit cards routinely hand your transaction info over to the gov.
New players like venmo weren’t thinking about doing that.
Hence the legislation.
Different data and regulations. Previously these platforms only reported large transaction players - businesses that likely reported the income anyway. But you could sneak by with $15k a year on PayPal without getting flagged. Now, you get a 1099 report and have to declare it - likely without having a clue what your cost basis was.
It’s actually very poorly thought out for many reasons since it isn’t necessarily a lot of money. Maybe you sold some old jeans or split dinner etc and over the course of the year it’s $1000. Nobody is thinking about keeping receipts for $60 in gas money to take a friend to the airport. And nobody really wants to have to keep a set of books for everything they do in life. Going to cause a lot of grief and pushback, and maybe that will be enough to change the regulations again.