Treasury defends plan to track most bank accounts

[Yo_Mama_Been_Loggin]

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]

1. $600 is too small but $10K is too big

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]

2. What I understood it was $600 total deposits for the whole year

[Amishman]

4. it is, which is absurd and should be completely unacceptable

I'm pretty annoyed this has a chance of being implemented.

[localroger]

6. No, it was whole account and individual transactions

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]

8. I understand they're going to take the total amount of money you took in as to what you spent out if

Which I think is ridiculous

[localroger]

14. The phrase I've seen is "bank accounts over $threshold."

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]

16. I watched Lawrence O'Donnell last night and the spokesperson

Didn't leave me with a easy feeling like he was trying to dodge answers

[fescuerescue]

3. To catch billionaire tax cheats

We gotta look at anyone who spends more than $600 a year.

sounds legit.

[Patton French]

5. There's really no good way to sell this.. (n/t)

[dragonlady]

7. This sheds some light on what it is really about

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]

34. Good summary. Thanks for linking that...

wish I could rec this post.

You might consider posting this as a stand-alone thread.

[SWBTATTReg]

9. So now if one has worked hard their whole lives, saved loads of cash, and/or sold off assets,

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]

10. I don't have enough info. With my investment banker I have a checking and savings account

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]

11. It's ridiculous

...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]

12. $600 is just plain stupid. You'd think treasury had better things to do with their time.

[leftyladyfrommo]

13. They would have to hire 10,000 more employees. nt

[sarcasmo]

26. Exactly, and that is why the 600 dollar amount is a joke.

[lagomorph777]

15. Hey, Joe Manchin, we actually want you to weigh in on this one.

This is fucking suicide. WTF is Treasury thinking? Does Pres. Biden know about this?

[Binkie The Clown]

17. So I would be tracked because I bought a new computer last month?

That's bullshit. I moved some money from savings and bought a new computer. How is that even remotely suspicious?

[lagomorph777]

20. If you're doing weird shit like that, you might even be making house payments.

So, yeah, you should be scrutinized.

[madville]

22. Or just transfer $601+ from your savings to checking

And then back everyday.

[andym]

18. Billionaires don't have to use conventional bank accounts

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]

19. As it stands at the moment I do not support this

Crack down on offshore accounts and assets.

I don't want my account to be tracked by anyone. Government included.

[MissB]

21. Man I spend some coin

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.

It’ll 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]

23. Pelosi said it's staying in the bill

But that the amount was open to negotiation.

[tritsofme]

24. The CBO must score it as savings

They are desperate for any “pay-fors” that don’t raise taxes on people making less than $400k.

[lagomorph777]

27. It'll cost more than it saves, but all the "savings" will come from

low/moderate income voters.

Idiocracy for sure.

[Ex Lurker]

35. She must be tired of being Speaker

because this is how you lose your majority.

[sarcasmo]

25. The Treasury doesn't have enough employees to track every 600+ transaction, LMFAO.

[madville]

28. They want to add tens of billions to the IRS budget in these bills

With the theory that extra money spent will recoup more money in unpaid taxes. Unlikely IMO.

[Tribetime]

29. It sounds like they're keeping it in

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]

30. I foresee stressful, time consuming, life sucking disasters for millions of working folks

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.

"Banks would add just a bit of additional data to information that they already supply to taxpayers and the IRS: how much money went into the account over the course of the year, and how much came out."

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]

31. $600 or $6000, they get all the information, and then what?

[WhiskeyGrinder]

32. This is an absolutely shit policy. Absolute hot garbage.

[mathematic]

33. How would small business owners and contractors be "caught" if they're paying their taxes?

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.