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Treasury Department DEFENDS plan to let the IRS snoop on bills over $600

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The Treasury Department defended the IRS’s proposal, generating widespread pushback to track data on accounts over $600 in flow, arguing that congressional dialogue about it was marred by “misinformation.”

“Opponents have advanced the pernicious myth that banks must report all transactions made by individual customers to the IRS,” Natasha Sarin, deputy assistant secretary for economic policy, wrote in a statement. blog post on the Treasury website.

Instead, banks would transfer the total inflows and outflows of an account.

“Banks would add just a little extra data to information they already provide to taxpayers and the IRS: how much money went into the account over the year and how much came out,” she said.

“Opponents have advanced the pernicious myth that banks will have to report all transactions made by individual customers to the IRS,” wrote Natasha Sarin, deputy assistant secretary for economic policy.

Republicans have said the proposal is tantamount to making the Biden administration peer at Americans’ everyday purchases.

sen. Cynthia Lummis, R-Wyo., Early Treasury Sec. Janet Yellen last month: ‘Do you wait so much for the American people that you need to know when they buy a sofa? Or a cow?’

“I want to be able to tell cowboys in Wyoming that if they make a payment on their pickup truck or buy a saddle for their horse, they won’t have an IRS agent for the ride,” Republican Senator John of Wyoming said. said Barrasso last week.

IRS chief Charles Rettig has said the US misses out on $1 trillion in unpaid taxes every year.

Sarin claimed the check rate would not increase for someone earning less than $400,000 “compared to years past.”

“The pending financial reporting proposals do not contain information about specific transactions or what taxpayers are buying,” Sarin continued. “The IRS will not receive any information and will not have any ability to track specific transactions under this proposal.”

Community bankers are sounding the alarm over the tax bill that would require banks to hand over transaction data on accounts with net inflows and outflows of more than $600.

In an effort to raise cash to pay for part of the $3.5 trillion Build Back Better plan, Democrats proposed requiring banks to limit the total inflow and outflow of transactions on virtually all accounts — checks, checks, savings, loans, investments – handing over to the IRS, leading account owners to flood their local institutions with calls raising privacy concerns.

Paul Merski, executive vice president of congressional relations and strategy for the Independent Community Bankers Association, told DailyMail.com that the proposal could cause the amount of under- or under-banking in the US to take a nosedive.

“Many of the unbanked people have recently come from other countries where they may have escaped a dictatorship-type government and don’t trust the government for good reason, and this would drive more people out of the banking system,” he said.

“We’re concerned that all this information going to the IRS is an invasion of privacy,” Merski said. “This is information that the IRS cannot demand from individuals themselves, so they use third parties and use banks as a kind of police force for the IRS.”

According to an ICBA-Morning Consult poll, more than two-thirds of voters are against the proposal and only 22% support it.

The banking industry has campaigned against the proposal because of the huge costs it would impose on community banks.

But Treasury Secretary Janet Yellen insisted on Tuesday that there was much unwarranted panic.

“Does this mean the government is trying to peep into our wallets?” CBS’s Norah O’Donnell asked Yellen in an interview. “Want to view $600 transactions?”

Yellen replied, “Absolutely not.

“I think this proposal has been seriously mischaracterized. The proposal does not include reporting of any individual’s transactions.’

“I think this proposal has been seriously mischaracterized.  The proposal does not include reporting of any individual's transactions,

“I think this proposal has been seriously mischaracterized. The proposal does not include reporting of any individual’s transactions,” Treasury Sec Janet Yellen said

Community bankers are sounding the alarm over tax bill that would require banks to hand over transaction data on accounts with net inflows and outflows of more than $600

Community bankers are sounding the alarm over tax bill that would require banks to hand over transaction data on accounts with net inflows and outflows of more than $600

The proposal would instead allow the IRS to see how much money had flown into an account and how much had flown out, and such information would trigger an audit if the IRS found it suspicious.

The proposal would instead allow the IRS to see how much money had flown into an account and how much had flown out, and such information would trigger an audit if the IRS found it suspicious.

The proposal would instead allow the IRS to see how much money had flown into an account and how much had flown out, and such information would trigger an audit if the IRS found it suspicious.

Yellen insisted the move was designed to reduce under-reporting of income by high net worth individuals, in an effort to evade taxes.

“The big picture is, look, we have a tax gap estimated at $7 trillion over the next ten years,” she said.

Namely, a shortfall in the amount the IRS collects as a result of individuals’ failure to report the income they have earned.

But Merski said the proposal would affect everyone.

“This is a broad dragnet profiling everyone’s bills and not targeting millionaires, the rich at all,” he said.

“It’s a common reporting requirement for pretty much everyone’s account, so it’s going to cause the IRS to have a lot of false positives and false audits from people that only flow into their accounts.” It will trip more people with their taxes because all this data is being dumped into the IRS,” Merski said.

Lawmakers are discussing the required disclosure level of $10,000 rather than $600, but Merski said it means little change as many bills flow so much between mortgages, bills and paychecks.

He argued that the IRS cannot process the data. “They’re already having a hard time processing tax returns,” Merski said, pointing to the $35 million backlog of unprocessed tax returns.

“This general profiling of individuals will not lead to any productive use at the IRS,” Merski added. ‘The Tax and Customs Administration is already receiving enormous amounts of information.

Banks are already disclosing information about transactions over $10,000 and any transactions they deem suspicious, in order to prevent money laundering. They also hand over data on interest accruing customer accounts. “If they don’t get the tax fraud successfully with this, it’s just assuming everyone is a tax fraud,” Merski said.

He said the IRS already has a poor track record of keeping taxpayers’ data private and secure.

GOP states of West Virginia, Arkansas, Nebraska and Missouri have already told DailyMail.com they will not defy the proposal.

According to the Office of Tax Analysis, this action against undisclosed revenue is expected to bring in $463 billion over the next decade.

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