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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsTreasury defends plan to track most bank accounts
The Treasury is defending its proposal to track banking information for nearly all Americans, after pushback from the finance industry and Congressional Republicans made the proposal a subject of heated debate in Congress.
A senior Treasury official told CBS News that tracking a small amount of information for nearly every bank account in the U.S. would help the IRS spot high-income people who are skipping out on taxes. Tracking the information would also provide additional verification that low-income workers are meeting their obligations.
The Treasury's proposal has been criticized for a cutoff that appears exceedingly low just $600 in a bank account, or a single $600 purchase, would be enough to trigger disclosure, according to an initial plan released in May. It now seems likely that number will rise to $10,000. But the financial industry claims that small business owners and independent contractors would be caught in a "dragnet" of surveillance rather than the wealthy.
"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 American Bankers Association and a coalition of business groups wrote last month.
https://www.msn.com/en-us/money/markets/treasury-defends-plan-to-track-most-bank-accounts/ar-AAPwWsa
JT45242
(2,290 posts)It is almost farcical that the $9999 amounts flowing in and out of less scrupulous banks (I'm looking at you Deutschbank) do not get flagged.
But $600 is much too low. Maybe flag anything starting at $5,000.
There can be a middle groung here.
I am upper middle class -- at $600 my paychecks and my house payment would get flagged every month. That is probably true of most people in the US who make at least $11/hour.
But I've probably only had 5 things of $5k come in or out of my account in my adult life -- big severance pay, small inheritance, down payment on a house, etc.
Tribetime
(4,702 posts)Amishman
(5,559 posts)I'm pretty annoyed this has a chance of being implemented.
localroger
(3,630 posts)So the existence of your account, but not every transaction, would be recorded if your balance was over the threshold, and every individual transaction over the threshold would be reported. If they raise the threshold to 10K, which they seem to be thinking of doing, it would be similar to the existing Cash Transaction Reporting (CTR) requirement except that it would require reporting non-cash transactions too. If they want this the threshold needs to be high enough not to catch every goddamn paycheck and house payment a typical middle-class person makes.
Tribetime
(4,702 posts)Which I think is ridiculous
localroger
(3,630 posts)I hear that as "bank accounts (with balances) over $threshold," not "bank accounts (the sum of all of whose transactions for $interval) are over $threshold." But I suppose it could technically be either and we're not really getting it from the source.
Tribetime
(4,702 posts)Didn't leave me with a easy feeling like he was trying to dodge answers
fescuerescue
(4,448 posts)We gotta look at anyone who spends more than $600 a year.
sounds legit.
Patton French
(777 posts)dragonlady
(3,577 posts)I was sceptical about the plan but this provides some clarity:
https://www.politifact.com/factchecks/2021/oct/15/bryan-steil/irs-reform-proposal-would-not-require-banks-hand-o/
Wounded Bear
(58,706 posts)wish I could rec this post.
You might consider posting this as a stand-alone thread.
SWBTATTReg
(22,166 posts)etc., already paid the taxes on it, etc. and they see this big dollar amount, and then you'll have to defend yourselves again and again and again for large dollar amounts that could be due to inheritances, stock/asset sales, etc., all already taken care of via capital gains transactions on the appropriate tax forms from years / decades ago?! I think that this is definitely overreach. Especially w/ the threshold set so low, $600 dollars...even w/ $10000 it's too low. They're right, it's a dragnet and there are other ways to gain insight into those skipping their fair share of taxes. E.g., start by examining the Panama Papers and other unauthorized releases of tax information from this disclosures, etc., first.
Also, isn't this a unauthorized intrusion into the lives of Americans, via a violation of the 4th Amendment:
The Fourth Amendment to the United States Constitution is part of the Bill of Rights. It prohibits unreasonable searches and seizures. In addition, it sets requirements for issuing warrants: warrants must be issued by a judge or magistrate, justified by probable cause, supported by oath or affirmation, and must particularly describe the place to be searched and the persons or things to be seized.
They also have rewards on those who fail to fail properly, I think, w/ 10% of the recovered proceeds as an award.
Does the IRS really pay rewards for turning in tax cheaters? Yes. Under the IRS Whistleblower program, those that turn in tax cheats are eligible for rewards based on the amount of unpaid collected taxes.
in2herbs
(2,947 posts)but it does not carry the FDIC insurance that federally licensed banks carry. It carries an equivalent, but not the same. My query: will the feds be tracking banking information on deposits, etc., that are not connected to federal banks??? If they're not going to I can see a lot of people with investments moving their money to investment checking/savings accounts bc you can also pay your bills on-line through this system.
Ritabert
(669 posts)...it's not going to catch the big tax cheats who have tax attorneys working for them. It will seriously inconvenience everybody else. Drop it like a hot potato.
Vinca
(50,303 posts)leftyladyfrommo
(18,870 posts)sarcasmo
(23,968 posts)lagomorph777
(30,613 posts)This is fucking suicide. WTF is Treasury thinking? Does Pres. Biden know about this?
Binkie The Clown
(7,911 posts)That's bullshit. I moved some money from savings and bought a new computer. How is that even remotely suspicious?
lagomorph777
(30,613 posts)So, yeah, you should be scrutinized.
madville
(7,412 posts)And then back everyday.
andym
(5,445 posts)they won't be caught by these rules. Rather, the rules will end up targeting people who sell things on Ebay or Craiglist is my guess.
berniesandersmittens
(11,345 posts)Crack down on offshore accounts and assets.
I don't want my account to be tracked by anyone. Government included.
MissB
(15,812 posts)When doing remodeling. Dh and I act as a general so yeah, we spend some larger amounts when doing a project.
In august we took a week vacation (just to another state, but a hotel and lots of take out were involved). He left for the vacation before I did, driving and camping and golfing with a buddy of his, including hitting a multi day outdoor concert.
When we returned, he headed off for a week long bike trip. Every couple of days he parked himself in a hotel. Even with campgrounds and take out and groceries, he still spent a fair amount of money.
The multiple trips ended up on his credit card this month. It was sizeable. We pay off our credit cards each month.
Itll be pretty boring if they track it tho. We remodel or vacation, rarely buying furniture or other stuff. Just a weird way to try to catch tax cheats! Normal banking for some folks means some larger amounts going into and out of the account each month. Add in that we are both engineers late in career so we are at the top of our earning potential.
There must be a better way.
madville
(7,412 posts)But that the amount was open to negotiation.
tritsofme
(17,399 posts)They are desperate for any pay-fors that dont raise taxes on people making less than $400k.
lagomorph777
(30,613 posts)low/moderate income voters.
Idiocracy for sure.
Ex Lurker
(3,816 posts)because this is how you lose your majority.
sarcasmo
(23,968 posts)madville
(7,412 posts)With the theory that extra money spent will recoup more money in unpaid taxes. Unlikely IMO.
Tribetime
(4,702 posts)I've heard them talking last night about not raising taxes on anybody making under 400,000 and that was the same thing they said when they were going to track everybody's bank account. I think it's all thanks to cinema they need to have money coming from somewhere that she cut off she should be locked up is another reason we're not going to get any medical benefits and prescription drugs and
Roisin Ni Fiachra
(2,574 posts)who will be audited unnecessarily, and be forced to prove what they spent their money on.
$10,000 in a bank account is not a lot of money. This figure does not indicate that the legislation is intended to target the wealthy whatsoever. As usual, the wealthy will find a loophole, and the non-wealthy will suffer.
Golly gee, is that all?
This should not give anyone a warm and fuzzy comfortably numb. Can't believe I actually agree with banksters and business groups for the first time in my life.
dalton99a
(81,570 posts)WhiskeyGrinder
(22,431 posts)mathematic
(1,439 posts)Can everybody please read between the lines here?
This plan is intended to catch tax cheats. Many small business owners and independent contractors cheat on their taxes because they're small enough to get away with it. If you think people should pay their taxes then what's the problem if these people get "caught"? They're SUPPOSED to be paying taxes. If you don't think they should be paying taxes, I don't know what to say.
This is not a proposal to catch wealthy tax cheats. This is a proposal to catch tax cheats. If you make $100k a year as an independent contractor or small business but you're only paying taxes on $50k because you've figured out a way to mask your income you are a tax cheat. I don't care that you're not wealthy, you have to pay taxes on all your income.