COLUMBUS, Ohio — How much money do you have in your bank account? Depending on your answer, under proposed tax reform from President Joe Biden, all your transactions would be reported to the IRS.
This proposed plan is raising privacy concerns.
10TV viewer Richard Lundell sent us this question: "Recently I have noticed some rumors floating around that the Biden Administration is trying to pass legislation to force all financial institutions to report financial transactions of $600 or more to the IRS. Is there any truth to these rumors?"
Our sources are testimony from the IRS Commissioner to the Senate Finance Committee, as well as President Joe Biden's spending plan for fiscal year 2022.
THE ANSWER: Yes, under President Biden's proposed legislation the IRS would have more information on financial accounts with more than $600
Here’s what we found:
Back on April 28, 2021, the Biden Administration announced the American Families Plan.
In it -- tax reform.
Fast-forward now to June 8, 2021, the IRS Commissioner testifies before the senate finance committee on the IRS budget, which includes details of the tax reform proposal as part of the president's spending plan for fiscal year 2022.
According to that testimony -- the plan aims to quote "improve tax administration and provide the IRS with a blueprint to address various facets of the tax gap."
Here's where we found the answer to Richard's question.
Under the proposed legislation, “[f]inancial 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.”
The measure, if approved, would begin in 2023.
So we can verify: yes, under President Biden's proposed legislation the IRS would have more information on financial accounts with more than $600.
Again it is a proposal -- and as it makes its way through congress, a lot could change.
There has already been some pushback to the plan.
According to a tweet from Rep. Brett Guthrie (R-KY), on Monday U.S. Representatives from nine states, not including Ohio, sent a letter strongly opposing this proposal to Speaker Nancy Pelosi, the IRS Commissioner, and others writing in part, the plan would "infringe on the privacy of millions of Americans."
We reached out to the IRS and a spokesperson responded: "We never comment on proposed or pending legislation."
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