IRS Bank Reporting Rule Not Included in $1.75 Trillion Bill
Update: Looks like the proposed bank reporting rule was not included in the $1.75 trillion dollar budget reconciliation bill. The framework unveiled today by the White House only suggests vastly improved enforcement of existing tax laws by investments in the IRS.
See original article below:
The White House has pledged to go after corporations and wealthy individuals who are not “paying their fair share” in taxes. Part of that plan was to monitor personal and business accounts with more than $600 of activity. According to the Treasury, the reports would allow auditors to identify discrepancies between declared income going into the bank and deposits and investigate irregularities.
But that could actually affect small business and individuals more than large corporations. If you use cash apps like Venmo, Zelle, and PayPal, and receive more than $600 a year, it could apply to you too. Currently, these apps are required to send tax forms to users with totals over $20,000 or if they have 200 separate transactions within a calendar year.
The plan saw opposition with claims of invasion of privacy and government overreach. Now the White House will put forward a much more limited plan for the Internal Revenue Service, NY Times reports. Under the new plan, banks would only be required to provide data on accounts with total annual deposits or withdrawals worth more than $10,000, rather than the $600 threshold that was initially proposed. Additionally, the reporting requirement would not apply to payroll deposits for wage and salary earners or to beneficiaries of federal programs such as Social Security.
The administration has said the IRS will not monitor specific customer transactions but would instead use the bank account information to spot discrepancies between what individuals report on their tax returns and what their bank accounts show.