Basically, in 2022 a law went into effect that forces P2P services like PayPal, Venmo, Apple Pay and Cashapp to start issuing 1099-K forms for anyone that receives more than $600/year. It would be really hard for the IRS to enforce such a huge change (tons of people hit this threshold) so they are slowly working towards the $600 target. 2024 taxes that we are about to file only hit the threshold for $5k but next year’s taxes it will lower (this current year). What this means is if you receive 1099-K’s you have to prove what is not considered taxable. The IRS is trying to force people to claim things as income tax like flipping and reselling furniture. The burden falls on the tax filer to prove it was not a taxable transaction. Paying someone back for something is not taxable, but if in a year, AJ pays Jonathon back for $400 worth of things on PayPal and I pay him back for $250 on PayPal. Now Jonathon gets a 1099-K and has to prove those transactions were not taxable. Some people believe it’s unconstitutional for the IRS to break a federal law (only enforcing the law on $5k instead of $600) so their is a movement to get rid of it but it still stands.

TLDR, use Zelle if you want to prevent additional tax forms and work (and possibly save your self from unjust taxation if you do not have adequate proof/receipts)