What's stopping someone from not reporting income that is under the threshold for receiving a 1099-NEC?
With the new threshold for receiving a 1099-NEC form being $2000, I'm wondering what's stopping someone from just not reporting that income if they don't meet that amount (besides morality, I suppose).
That's a big leap from the previous $600 limit, and I can think of a few scenarios where someone might have been over the previous threshold, but not the new one. And if the company never sends the IRS a 1099-NEC reporting that payment, and they also never send the non-employee one, then I guess I'm not really understanding how the IRS would know you were paid that money.
I understand that all income must be reported. I'm not suggesting someone should commit tax fraud. I'm just curious if this is really as much of an honor system as it seems like.