The bevy of changes to the tax code will give most taxpayers at least some relief. But because Congress didn’t address a common loophole that creates headaches for people who earn money from gigs booked through companies like Esty, Uber, Task Rabbit and Airbnb, most of these taxpayers will struggle to figure out their tax bills without receiving any tax information forms.

It didn’t have to be this way.

Congress knew it had a golden opportunity to ease this burden for millions of Americans but lawmakers didn’t bother. I’m certain about that because I’ve conducted extensive research and testified before IRS and congressional committees on gig workers’ tax travails.

Missing paperwork

To get a sense of how big this problem is I surveyed 518 self-employed taxpayers, 22 percent of whom whom earned money in the gig economy – meaning that they were making a living or supplementing their day jobs through companies that connect customers who need goods and services with people who can provide them via apps.

I found that many if not most of them had trouble dealing with their taxes. Some 43 percent didn’t know what they would owe the IRS for this income and were not setting aside enough money to pay their taxes. About 61 percent didn’t get any IRS reporting forms from the company through which they booked gigs, such as a 1099.

Many first-time gig workers, being used to having their employers withhold taxes from their paychecks, may not realize they owe any tax on this income at all. Indeed, almost 47 percent of the people who took part in my study and earned money in the gig economy weren’t aware of the deductions or credits they could claim to lower their tax bill.

As a result, workers like these may wind up paying more in taxes than they should, when and if the IRS catches up with them.

High threshold

Why don’t most of these taxpayers get 1099s?

Like all businesses, the companies, in what is sometimes called the “sharing economy,” must issue these forms to their independent contractors who earn at least US$600 in a single year. But the government doesn’t mandate this paperwork for earnings tied to payments made with credit or debit cards. For that income, the threshold for mandatory 1099s jumps from $600 to $20,000. In addition, these workers must have been paid for at least 200 transactions during the year.

Because most gig workers get paid with credit and debit cards or apps linked to those accounts, they get snared in this loophole. An overwhelming majority – 88 percent – of the ones I surveyed earned less than $15,000 from this kind of work. Other studies have found that at least 85 percent of gig workers make less than $500 per month.

To be sure, some platform companies choose to embrace lower thresholds. For example, Lyft now has a policy to send all drivers who earn at least $600 from rides a 1099.

And a few states, including Massachussetts and Vermont, have mandated this approach for all platforms.

But not all companies are moving in the right direction.

Until this year, Uber had always sent every driver a 1099. But the ride-share company recently told its drivers not to expect this paperwork unless they make more than $20,000 and have 200 transactions from trips booked through the company’s app.

And while this was always how companies like Airbnb and TaskRabbit operated, it can create costly hassles for workers who may not be able to afford an accountant and struggle to comply with the IRS’ rules.

Anyone who doesn’t get forms indicating how much taxable income they earned risks underpaying. IRS data show that 63 percent of the taxpayers who are not subject to withholding by their employers or don’t get 1099s misreport income, often unintentionally.

When quarterly or annual errors surface, unsuspecting delinquent taxpayers may incur penalties and owe interest. They also miss out on claiming the deductions and credits they may have otherwise been entitled to, which would have cut their tax bill. Often, taxpayers may not realize that they owe taxes on income for work that doesn’t generate any IRS paperwork.

That can prove costly. Although Americans who don’t pay their taxes can avoid punishment if they owe less than $1,000, the IRS charges as much as 4 percent in interest every quarter on the amount others underpay as a penalty.

The gig economy’s growth may help explain why the number of penalties the IRS levied between 2007 and 2016 spiked from 7.5 million to nearly 10 million without a big crackdown.

Missed opportunity

After testifying at that 2016 hearing, I worked with congressional staff to address some of these problems. Among other things, a bipartisan bill we developed would require businesses – including platforms like Uber, Airbnb and Etsy – to issue 1099s to all independent contractors who earn at least $1,500 in a calendar year through their apps and websites – regardless of how they are paid.

I initially got the impression that Congress would solve this problem with the new tax law. Among other things, Sen. John Thune, a South Dakota Republican, pushed for an across-the-board $1,000 reporting threshold for 1099s.

However, Thune’s fix was bundled with other changes that created procedural problems in the Senate. That kept the 1099 reporting changes out of the new tax law.

To be sure, the new tax law does make some changes that benefit independent contractors.

Along with lower tax rates, the new pass-through deduction could help many low-income and middle-class self-employed service providers, including those in the gig economy earning money by driving cars and running errands. They may be able to deduct up to 20 percent of their business income if they earn less than $157,500 (or $315,000 for married couples).

But Congress could have made simple changes that would have eased the compliance burdens for gig workers, something the IRS’ own taxpayer advocate has said should be a high priority.

By neglecting to do so, lawmakers let this problem fester.

Caroline Bruckner received funding from Boston College Center for Retirement Research to study how the tax compliance challenges of the gig economy could impact Social Security.