IRS would track all bank transactions over $600 under Biden plan

[Dos Equis]

Whiskey Tango Foxtrot.  Somebody let them know this ain't China or North Korea.   

IRS would track all bank transactions over $600 under Biden plan; Businesses revolt
by Casey Harper, The Center Square
September 27, 2021

A major component of President Joe Biden’s plan to raise revenue to pay for his trillions of dollars in new federal spending is now under fire from trade associations across the country.

The Biden administration has made clear its plan to beef up IRS auditing by expanding the agency’s funding and power. Biden’s latest proposal would require banks to turn over to the Internal Revenue Service bank account information for all accounts holding more than $600.

In a sharp pushback against the proposal, more than 40 trade associations, some of which represent entire industries or economic sectors, signed a letter to U.S. House Speaker Nancy Pelosi, D-Calif., and Minority Leader Kevin McCarthy, R-Calif., raising the alarm about the plan.

The letter, which includes the support of several banking coalitions, calls on Congress to reject that requirement, saying it violates customer privacy and would create an incredibly expensive and elaborate reporting requirement for the banks.


“While the stated goal of this vast data collection is to uncover tax dodging by the wealthy, this proposal is not remotely targeted to that purpose or that population,” the letter said. “In addition to the significant privacy concerns, it would create tremendous liability for all affected parties by requiring the collection of financial information for nearly every American without proper explanation of how the IRS will store, protect, and use this enormous trove of personal financial information. We believe that this program is costly for all parties, not fit for purpose, and loaded with potential for unintended and serious negative consequences.”

The groups argue it would target "almost every American" and question whether the IRS could keep that information secure from hackers and bad actors.

“The undersigned associations representing a cross-section of financial and business interests write to express our strong opposition to a proposal under consideration as part of the reconciliation package that would establish an expansive new tax information reporting regime that would directly impact almost every American and small business with an account at a financial institution," the letter said. "This proposal would create significant operational and reputational challenges for financial institutions, increase tax preparation costs for individuals and small businesses, and create serious financial privacy concerns. We urge members to oppose any efforts to advance this ill-advised new reporting regime."

Some reports indicate that Democrats hope to raise the $600 threshold, but that has not yet materialized.

Biden proposed giving an extra $80 billion to the IRS earlier this year for auditing, saying the agency would more than make back those funds. House Democrats’ have so far indicated they plan to fulfill that request.

“There’s a 99 percent compliance rate on wages – because wage earners get their earnings reported to the IRS,” a fact sheet says that was handed out by the White House to lawmakers to sell them on the plan. “But the super wealthy who get their income from unreported sources are able to hide their income and avoid paying the tax they owe. In fact, each year the top 1 percent chooses not to pay more than $160 billion in taxes.”

Republicans on the House Ways and Means Committee have scheduled a virtual roundtable Wednesday entitled, “Weaponization of the IRS: A Sordid History and the Need for Taxpayer Protections” to discuss these concerns.

“The meeting will highlight the efforts of congressional Democrats to nearly double the size of the IRS with a massive funding increase while doing nothing to address the weaponization of the IRS, including the massive, criminal leak of taxpayer information to ProPublica in June of this year,” Texas Republican Rep. Kevin Brady’s office said.

This isn’t the only business community criticism to be levied at the $3.5 trillion bill in recent days.

The U.S. Chamber of Commerce officially condemned the bill this week, calling it an “existential threat” to the economy.

“This reconciliation bill is effectively 100 bills in one representing every big government idea that’s never been able to pass in Congress,” U.S. Chamber of Commerce President and CEO Suzanne Clark said. “The bill is an existential threat to America’s fragile economic recovery and future prosperity. We will not find durable or practical solutions in one massive bill that is equivalent to more than twice the combined budgets of all 50 states. The success of the bipartisan infrastructure negotiations provides a much better model for how Congress should proceed in addressing America’s problems.”

https://www.washingtonexaminer.com/politics/irs-would-track-all-bank-transactions-over-600-under-biden-plan-businesses-revolt

[IroNat]

All accounts with balances exceeding $600.

Anybody with half a brain knows not to deposit under the table money to leave a trail for the IRS so this is a waste of time.

This is why they want to go to a cashless economy...to prevent tax evasion.

So, if you approve of people cheating on their taxes then a cashless economy will not be for you.

Do you approve of tax evasion/cheating?

"Biden’s latest proposal would require banks to turn over to the Internal Revenue Service bank account information for all accounts holding more than $600."

[OzmO]

This seems like it's being billed as something as a way to tax the wealthy.  I don't see that happening.  They don't audit the superrich very often.  Its just another way to spend a bunch of money.  I also think you will see a bunch of people not put a lot of money in the bank.  Would that cause a rise in crime?

If they really wanted to tax the rich they could a lot more.   

This is likely a way to squeeze more out of the middle class.   

[IroNat]

Is this leading to the idea of a wealth tax...a tax on assets in addition to a tax on income?

That was an idea of that annoying female Senator law professor who ran for Prez.

[IRON CROSS]

In Australia they track + $ 10K transactions , but not $ 9999 ones 

[SOMEPARTS]

Like they already don't. 

When it comes to information they have access to all of it.

[IroNat]

In Australia they track + $ 10K transactions , but not $ 9999 ones 

They have been doing it in the U.S. for many years.  Supposedly to track drug money.

[SOMEPARTS]

They have been doing it in the U.S. for many years.  Supposedly to track drug money.

Patriot Act allowed far more than most realize. Now it's all bets off. They have unlimted access and storage.

[Dos Equis]

In Australia they track + $ 10K transactions , but not $ 9999 ones 

You only have to do a Currency Transaction Report for amounts of $10k or more, but the banks still report some transactions less than that amount.

But $600?  That's crazy.  Big Brother on the sauce.   

[IroNat]

The headline said "transactions" but the article said "balances".

[Dos Equis]

The headline said "transactions" but the article said "balances".

Good point.  I think it applies to both.  Here is an excerpt from the IRS Commissioner's Congressional testimony:

"This requirement would apply to all business and personal accounts from financial institutions, including bank, loan, and investment accounts, with the exception of accounts below a low de minimis gross flow threshold of $600 or fair market value of $600."

https://www.finance.senate.gov/imo/media/doc/2021%20Final%20CPR%20testimony%20SFC%20BUDGET%20060821%20-1.pdf

[IroNat]

Good point.  I think it applies to both.  Here is an excerpt from the IRS Commissioner's Congressional testimony:

"This requirement would apply to all business and personal accounts from financial institutions, including bank, loan, and investment accounts, with the exception of accounts below a low de minimis gross flow threshold of $600 or fair market value of $600."

https://www.finance.senate.gov/imo/media/doc/2021%20Final%20CPR%20testimony%20SFC%20BUDGET%20060821%20-1.pdf

This is what it says (my interpretation):

The IRS will have access to the transaction info of all accounts $600 and above.

What is even more intrusive is the reporting of all purchases made via these accounts.  It sounds like this may also include credit card purchases and investment/mutual fund accounts.

Likely this info will be collected and stored for future analysis if needed during an investigation.

>

"This proposal would create a comprehensive financial account information
reporting regime. Financial institutions would report data on financial
accounts in an information return. The annual return will report gross inflows
and outflows with a breakdown for physical cash, transactions with a foreign
account, and transfers to and from another account with the same owner.
This requirement would apply to all business and personal accounts from
financial institutions, including bank, loan, and investment accounts, with
the exception of accounts below a low de minimis gross flow threshold of
$600 or fair market value of $600. Other accounts with characteristics
similar to financial institution accounts will be covered under this information
reporting regime.  In particular, payment settlement entities would collect
Taxpayer Identification Numbers (TINs) and file a revised Form 1099-K
expanded to all payee accounts (subject to the same de minimis threshold),
reporting not only gross receipts but also gross purchases, physical cash,
as well as payments to and from foreign accounts, and transfer inflows and
outflows. Similar reporting requirements would apply to crypto asset
exchanges and custodians. Separately, reporting requirements would apply
in cases in which taxpayers buy crypto assets from one broker and then
transfer them to another broker, and businesses that receive crypto assets
in transactions with a fair market value of more than $10,000 would have to
report such transactions. The Secretary would be given broad authority to
issue regulations necessary to implement this proposal. The proposal would
be effective for tax years beginning after December 31, 2022."

[Dos Equis]

This is what it says (my interpretation):

The IRS will have access to the transaction info of all accounts $600 and above.

What is even more intrusive is the reporting of all purchases made via these accounts.  It sounds like this may also include credit card purchases and investment/mutual fund accounts.

Likely this info will be collected and stored for future analysis if needed during an investigation.

>

"This proposal would create a comprehensive financial account information
reporting regime. Financial institutions would report data on financial
accounts in an information return. The annual return will report gross inflows
and outflows with a breakdown for physical cash, transactions with a foreign
account, and transfers to and from another account with the same owner.
This requirement would apply to all business and personal accounts from
financial institutions, including bank, loan, and investment accounts, with
the exception of accounts below a low de minimis gross flow threshold of
$600 or fair market value of $600. Other accounts with characteristics
similar to financial institution accounts will be covered under this information
reporting regime.  In particular, payment settlement entities would collect
Taxpayer Identification Numbers (TINs) and file a revised Form 1099-K
expanded to all payee accounts (subject to the same de minimis threshold),
reporting not only gross receipts but also gross purchases, physical cash,
as well as payments to and from foreign accounts, and transfer inflows and
outflows. Similar reporting requirements would apply to crypto asset
exchanges and custodians. Separately, reporting requirements would apply
in cases in which taxpayers buy crypto assets from one broker and then
transfer them to another broker, and businesses that receive crypto assets
in transactions with a fair market value of more than $10,000 would have to
report such transactions. The Secretary would be given broad authority to
issue regulations necessary to implement this proposal. The proposal would
be effective for tax years beginning after December 31, 2022."

I don't see how anyone can support this kind of intrusive government overreach. 

[IroNat]

I don't see how anyone can support this kind of intrusive government overreach. 

All possible thanks to tech.

Pretty soon they'll be logging your toilet flushes.

[residue]

All possible thanks to tech.

Pretty soon they'll be logging your toilet flushes.

sooner than you think
https://www.irishtimes.com/life-and-style/homes-and-property/interiors/alexa-analyse-my-bowel-movement-will-every-home-soon-have-a-smart-toilet-1.4681838

[chaos]

$600 to tax the rich? LMAO

[Moontrane]

sooner than you think
https://www.irishtimes.com/life-and-style/homes-and-property/interiors/alexa-analyse-my-bowel-movement-will-every-home-soon-have-a-smart-toilet-1.4681838

In order to differentiate between users, Izen developed a scanner that can recognise the physical characteristics of whoever is sitting on the toilet – or, in the words of the researchers, “the distinctive features of their anoderm” (the skin of the anal canal). Apparently, your “analprint”, like your fingerprints, is unique.

[Primemuscle]

Whiskey Tango Foxtrot.  Somebody let them know this ain't China or North Korea.   

IRS would track all bank transactions over $600 under Biden plan; Businesses revolt
by Casey Harper, The Center Square
September 27, 2021

A major component of President Joe Biden’s plan to raise revenue to pay for his trillions of dollars in new federal spending is now under fire from trade associations across the country.

The Biden administration has made clear its plan to beef up IRS auditing by expanding the agency’s funding and power. Biden’s latest proposal would require banks to turn over to the Internal Revenue Service bank account information for all accounts holding more than $600.

In a sharp pushback against the proposal, more than 40 trade associations, some of which represent entire industries or economic sectors, signed a letter to U.S. House Speaker Nancy Pelosi, D-Calif., and Minority Leader Kevin McCarthy, R-Calif., raising the alarm about the plan.

The letter, which includes the support of several banking coalitions, calls on Congress to reject that requirement, saying it violates customer privacy and would create an incredibly expensive and elaborate reporting requirement for the banks.


“While the stated goal of this vast data collection is to uncover tax dodging by the wealthy, this proposal is not remotely targeted to that purpose or that population,” the letter said. “In addition to the significant privacy concerns, it would create tremendous liability for all affected parties by requiring the collection of financial information for nearly every American without proper explanation of how the IRS will store, protect, and use this enormous trove of personal financial information. We believe that this program is costly for all parties, not fit for purpose, and loaded with potential for unintended and serious negative consequences.”

The groups argue it would target "almost every American" and question whether the IRS could keep that information secure from hackers and bad actors.

“The undersigned associations representing a cross-section of financial and business interests write to express our strong opposition to a proposal under consideration as part of the reconciliation package that would establish an expansive new tax information reporting regime that would directly impact almost every American and small business with an account at a financial institution," the letter said. "This proposal would create significant operational and reputational challenges for financial institutions, increase tax preparation costs for individuals and small businesses, and create serious financial privacy concerns. We urge members to oppose any efforts to advance this ill-advised new reporting regime."

Some reports indicate that Democrats hope to raise the $600 threshold, but that has not yet materialized.

Biden proposed giving an extra $80 billion to the IRS earlier this year for auditing, saying the agency would more than make back those funds. House Democrats’ have so far indicated they plan to fulfill that request.

“There’s a 99 percent compliance rate on wages – because wage earners get their earnings reported to the IRS,” a fact sheet says that was handed out by the White House to lawmakers to sell them on the plan. “But the super wealthy who get their income from unreported sources are able to hide their income and avoid paying the tax they owe. In fact, each year the top 1 percent chooses not to pay more than $160 billion in taxes.”

Republicans on the House Ways and Means Committee have scheduled a virtual roundtable Wednesday entitled, “Weaponization of the IRS: A Sordid History and the Need for Taxpayer Protections” to discuss these concerns.

“The meeting will highlight the efforts of congressional Democrats to nearly double the size of the IRS with a massive funding increase while doing nothing to address the weaponization of the IRS, including the massive, criminal leak of taxpayer information to ProPublica in June of this year,” Texas Republican Rep. Kevin Brady’s office said.

This isn’t the only business community criticism to be levied at the $3.5 trillion bill in recent days.

The U.S. Chamber of Commerce officially condemned the bill this week, calling it an “existential threat” to the economy.

“This reconciliation bill is effectively 100 bills in one representing every big government idea that’s never been able to pass in Congress,” U.S. Chamber of Commerce President and CEO Suzanne Clark said. “The bill is an existential threat to America’s fragile economic recovery and future prosperity. We will not find durable or practical solutions in one massive bill that is equivalent to more than twice the combined budgets of all 50 states. The success of the bipartisan infrastructure negotiations provides a much better model for how Congress should proceed in addressing America’s problems.”

https://www.washingtonexaminer.com/politics/irs-would-track-all-bank-transactions-over-600-under-biden-plan-businesses-revolt

Are they talking about checking, savings or investment accounts? Regardless, I guess I'll need an 'off shore' account. Are you sure it isn't $600,000 or $6 million?

When I bought lunch the other day at Panda Express a sign on the front door looking for job applicants read that they pay over $20. per hour for well-qualified applicants. If they pay their employees every two weeks, as I suspect they do and an employee has their paycheck direct deposited....well, that person is screwed if they cheat on their taxes....and who doesn't? Mostly, just the folks who take the standard deduction. 

One more thought. The IRS is woefully understaffed, so audits are extremely rare these days unless there is something glaringly off with a person's taxes. Pretty much, unless you announce that you are a tax objector who refuses to pay taxes, they leave you alone.

[SOMEPARTS]

Are they talking about checking, savings or investment accounts? Regardless, I guess I'll need an 'off shore' account. Are you sure it isn't $600,000 or $6 million?

When I bought lunch the other day at Panda Express a sign on the front door looking for job applicants read that they pay over $20. per hour for well-qualified applicants. If they pay their employees every two weeks, as I suspect they do and an employee has their paycheck direct deposited....well, that person is screwed if they cheat on their taxes....and who doesn't? Mostly, just the folks who take the standard deduction. 

One more thought. The IRS is woefully understaffed, so audits are extremely rare these days unless there is something glaringly off with a person's taxes. Pretty much, unless you announce that you are a tax objector who refuses to pay taxes, they leave you alone.

Biden is trying to double the IRS wokeforce. Amazing how little those that voted for these very things know about them.

[Howard]

I don't see how anyone can support this kind of intrusive government overreach.

Most getbiggers won't be effected as 600 is a good $595 over their max transaction.

[Dos Equis]

Are they talking about checking, savings or investment accounts? Regardless, I guess I'll need an 'off shore' account. Are you sure it isn't $600,000 or $6 million?

When I bought lunch the other day at Panda Express a sign on the front door looking for job applicants read that they pay over $20. per hour for well-qualified applicants. If they pay their employees every two weeks, as I suspect they do and an employee has their paycheck direct deposited....well, that person is screwed if they cheat on their taxes....and who doesn't? Mostly, just the folks who take the standard deduction. 

One more thought. The IRS is woefully understaffed, so audits are extremely rare these days unless there is something glaringly off with a person's taxes. Pretty much, unless you announce that you are a tax objector who refuses to pay taxes, they leave you alone.

I'm sure the IRS Commissioner said $600.  I quoted and linked his comments. 

[IroNat]

Are they talking about checking, savings or investment accounts? Regardless, I guess I'll need an 'off shore' account. Are you sure it isn't $600,000 or $6 million?

When I bought lunch the other day at Panda Express a sign on the front door looking for job applicants read that they pay over $20. per hour for well-qualified applicants. If they pay their employees every two weeks, as I suspect they do and an employee has their paycheck direct deposited....well, that person is screwed if they cheat on their taxes....and who doesn't? Mostly, just the folks who take the standard deduction. 

One more thought. The IRS is woefully understaffed, so audits are extremely rare these days unless there is something glaringly off with a person's taxes. Pretty much, unless you announce that you are a tax objector who refuses to pay taxes, they leave you alone.

That is income reported as wages on a W-2.  The IRS has had wage info like that info for many decades.  Under-reporting W-2 income would be a moron move.

The type of unreported income they are looking for is from self-employed people or those paid as independent contractors, i.e., non W-2 reported income.

It would be foolish to deposit unreported income into a bank and leave a trail for the IRS.  That type of money goes into the mattress and is spent as cash.

The IRS primarily looks for two things: under-reported income and over-stated expenses.

Robbing a bank and then going on a spending spree flashing cash is a no-no.  The money should be hidden away for a length time and even then only spent sparingly and cautiously.

[Dos Equis]

 

Yellen defends IRS rule requiring banks to report all transactions over $600
By Callie Patteson
October 5, 2021

Treasury Secretary Janet Yellen is defending a Biden administration proposal that would require banks to report data to the Internal Revenue Service on transactions over $600, calling the collection of information “routine,” after taking heat for the idea that is widely seen as an unprecedented invasion of privacy.

During an interview on CNBC’s “Squawk Box” on Tuesday, Yellen was pressed on whether the IRS has the “wherewithal” to collect more information about taxpayers and bank accounts including cash flows, something many Republicans have called invasive.

“Well, of course they do,” Yellen said. “Right now, on every bank account that earns more than $10 a year in interest, the banks report the interest earned to the IRS. That’s part of the information base that includes W2’s and reports on dividends in other income that taxpayers earned. So collection of information is routine.”

Yellen cited the “enormous tax gap” in the US as the reason behind the proposed tax hikes and information collecting, blaming the gap on places where information on income “can be hidden.”

Treasury Secretary Janet Yellen defended President Joe Biden's plan to have banks inform the IRS of transactions that are $600 or more as simply "routine."

“It’s just a few pieces of information about individual bank accounts, nothing at the transaction level that would violate privacy,” the secretary said.

The collected information would ostensibly help the Treasury Department determine which high-income wealthy individuals may be concealing transactions and income, and “these would be helpful indicators of where it would make sense for auditing to occur,” she added.

“So, it is not reporting of individual transactions or anything of the like. And it would be a simple thing for banks and other payment providers to provide along with the other information they’re already providing.”

Under the proposal, banks would be required to turn over aggregate inflow and outflow numbers annually to the IRS and would cover bank accounts with at least $600 or at least $600 worth of transactions, according to the Wall Street Journal.

The proposal has been slammed by Republicans as an invasion of privacy. Last week, Sen. Cynthia Lummis (R-Wyo.) slammed the Treasury secretary during a Senate Banking, Housing, and Urban Development Committee hearing, asking if she was aware of “how unnecessary this regulatory burden is?”

“Do you distrust the American people so much that you need to know when they bought a couch? Or a cow?” the Republican senator asked.

“There are obvious privacy concerns for all Americans here and this represents a dramatic new regulatory burden for community banks and credit unions in Wyoming and elsewhere,” Lummis added.

“Bank customers are not subjects to the federal government. Banks do not work for the IRS.”

Yellen defended the plan, telling the senator, “Banks already report directly to the IRS the interest that they pay on accounts when it exceeds $10, and this is not a proposal to provide detailed transaction-level data by banks to the IRS.”

“Well, $600 threshold is not usually where you’re going to find the massive amount of tax revenue you think Americans are cheating you out of,” Lummis fired back.

‘Do you need to know when they bought a couch?’ Senator rips Yellen over Biden IRS plan
“That’s correct,” Yellen admitted, “but it’s important to have comprehensive information so that individuals can’t game the system and have multiple accounts.”

Several states have also expressed concern over the proposal, including Nebraska, which slammed the information collection as a violation of Americans’ constitutional right to privacy and said the costs associated with banks, credit companies and other financial institutions complying with the requirement would be passed on to consumers.

“This could lead to a tremendous invasion of privacy the likes of which our country has never seen. Millions of law-abiding Americans would suddenly have their bank accounts opened to federal investigators for no more reason than buying a refrigerator. This is simply unconscionable. To make matters worse, under this proposal, saving for college could put an American family on the IRS’s radar, costs that most likely will be passed on to the public,” Nebraska state Treasurer John Murante sai​d in the statement released last month.​​

https://nypost.com/2021/10/05/janet-yellen-defends-bidens-irs-proposal/

[MCWAY]

Government employees dodge taxes all the time.

In the military, a lot of people re-enlist overseas in combat theater, so they get ALL of their re-enlistment bonus (along with tax-free pay, imminent danger pay).

Plus your overall salary is called Entitlements, which is broken up into pay and allowances. Pay is taxed; but allowances (i.e. housing and food) are not.

And, as many of you know, it doesn't matter where you're physically stationed. It matters where your home of record is. I know firsthand. Even though I was stationed in places with state/commonwealth income tax, I didn't pay any of it because my home of record is Florida.

Dollars to donuts, politicians have a similar set up (especially in DC).

[Soul Crusher]

Greedy As F liberals love this.  They don't make real money from real jobs and love the idea of stealing others' $$$$