TEFRA (Tax Equity and Fiscal Responsibility Act) of 1982

Early in U.S. commercial barter history, some “exchange clubs” openly attracted members by telling them that barter was a way of getting around taxes. It was these types of organizations that were giving barter a bad reputation. The IRTA felt that one of the most valuable efforts that could be put forth on behalf of the barter industry in the U.S. was to raise the perception of barter by becoming legally recognized by the government as a viable form of commerce. The IRTA led this effort starting in 1979 and TEFRA was signed into law by President Reagan in 1982.

The main point of TEFRA was that it recognized commercial barter exchanges in the United States as third-party record keepers, similar to accountants and banks.

The TEFRA Act also paved the way for the requirement by commercial trade exchanges in the U.S. to provide the Internal Revenue Service (IRS) annually with the barter income of their members. This is done on form 1099B.