American Families Plan impact
#2
Join Date: Mar 2009
Posts: 2,295
That provision was in the already passed COVID relief/stimulus bill (the bill with $1400 checks) not the upcoming/proposed "Families Plan"
#4
Join Date: Apr 2008
Location: MSP
Programs: Delta SkyMiles GM/United Mileage Plus/Hilton Honors
Posts: 166
Especially since there was a recent article in the WSJ (IIRC) that said the IRS will be leaning on banks to provide funds flow data as a way to crack down on income evasion. However, they stated that would require a law from Congress, so doubt that would happen unless the pass the revenue portion on reconciliation. Doubt they will have the votes for the spending package even with reconciliation, but they might be able to split it up.
#5
Join Date: Dec 2010
Programs: Hilton Diamond, Marriott Titanium, Radisson Gold, Hyatt Globalist, M life Gold, IHG Spire
Posts: 918
#6
Join Date: Sep 2019
Posts: 317
It's pointless to discuss this now. This provision of the proposed bill may not be in the final bill, may not be in it in the present form--and the bill itself may not become law. Anyway, since we all pay our taxes and do not cheat in any way (why, that would be illegal!) we've got nothing to worry about.
#7
Join Date: Jun 2011
Posts: 3,528
#8
Join Date: Jul 2014
Location: JRF
Programs: AA Gold, Marriott Platinum, Hilton Diamond, National Executive Elite
Posts: 1,784
Dementia Joe is coming after YOU
Groups push back against Biden’s plan to grant IRS access to your bank account (and PayPal) transaction data
The proposals could be ruled unconstitutional.- By Ken Macon
- Posted 9:12 am
Banking industry officials and other financial services firms are bracing for a long fight over a bill that will require banks to share consumer account information with the Internal Revenue Service to boost federal tax revenue.
This notion originally gained traction this spring within the American Families Planby the Biden administration. But bankers and even some consumer groups have slammed it as a compliance concern and a privacy issue. Financial institutions already provide the IRS with large quantities of data.
As part of the 3.5 trillion dollar budget reconciliation package proposed by the Biden administration, legislators are considering this invasive proposal as an income source to fund the massive budget.
https://reclaimthenet.org/biden-plan...oop-bank-data/
#9
Original Member
Join Date: May 1998
Posts: 1,139
When the IRS audits an individual tax return, they ask for an explanation of all deposits. Unexplained deposits can theoretically be classified as income.
Personally, I prefer to mail money orders directly to the credit card companies, but granted that can increase the likelihood of shutdowns.
Now most auditors will be reasonable, and if you explain the process to them and show a few prepaid cards and money order slips to them, they will just cross the bank account analysis off the list. They have a lot of audits to complete in very little time.
But the concern is the one in a thousand jerk who wants to prove out that every money order deposit came from manufactured spending. It can be done, but would be a huge hassle.
That is why most manufactured spenders who do bank deposits would prefer not to get audited. And most won't. The current SAR system used by banks is primarily accessed by the IRS Criminal Investigation division, which is a lot more concerned with finding true criminal activity than crossing off thousands of little numbers during an audit. The Flyertalk reports of the few visits by IRS CID have not been worrisome.
But if any new reporting system starts generating more civil audits as a result of large bank deposits that don't appear on an income tax return, we might (not necessarily will) start hearing reports of hassle-filled IRS audits.
#10
Join Date: Jul 2014
Location: JRF
Programs: AA Gold, Marriott Platinum, Hilton Diamond, National Executive Elite
Posts: 1,784
Democrats face growing storm over IRS reporting provision
BY NAOMI JAGODA - 10/16/21 12:00 PM EDT
Democrats are facing a firestorm of criticism over a proposal to increase the amount of bank account information reported to the IRS, posing a challenge as they craft their wide-ranging social spending bill.
The proposal is a top priority of the Biden administration, which argues it will help the IRS go after wealthy tax cheats.
But it has come under a barrage of attacks from banks and Republicans, who say it raises significant privacy concerns. Financial institutions have been mobilizing their customers to speak out against the proposal to lawmakers.
Congressional Democrats are expected to make changes to the administration’s initial proposal, but are generally supportive of the idea. The increasing attacks on the proposal has prompted lawmakers and administration officials to go on the defensive.
https://thehill.com/policy/finance/5...ting-provision
Democrats are facing a firestorm of criticism over a proposal to increase the amount of bank account information reported to the IRS, posing a challenge as they craft their wide-ranging social spending bill.
The proposal is a top priority of the Biden administration, which argues it will help the IRS go after wealthy tax cheats.
But it has come under a barrage of attacks from banks and Republicans, who say it raises significant privacy concerns. Financial institutions have been mobilizing their customers to speak out against the proposal to lawmakers.
Congressional Democrats are expected to make changes to the administration’s initial proposal, but are generally supportive of the idea. The increasing attacks on the proposal has prompted lawmakers and administration officials to go on the defensive.
https://thehill.com/policy/finance/5...ting-provision
#11
Join Date: Mar 2005
Programs: Continental Onepass, Hilton, Marriott, USAir and now UA
Posts: 6,438
We could spend our life worrying about proposed legislation that can adversely impact our lives.
However, in the vast majority of cases, either the bills never get passed, or if they do, have been altered to such a degree that our original concerns have been either eliminated or muted.
Stupid laws are suggested by both sides of the aisle. If one actually has a chance of succeeding, that is when I start to write letters.
Otherwise, it is just more noise in my life that gets filtered out by my brain
However, in the vast majority of cases, either the bills never get passed, or if they do, have been altered to such a degree that our original concerns have been either eliminated or muted.
Stupid laws are suggested by both sides of the aisle. If one actually has a chance of succeeding, that is when I start to write letters.
Otherwise, it is just more noise in my life that gets filtered out by my brain
#12
Join Date: Jan 2016
Posts: 369
I'm afraid that folks are getting worked-up over nothing.
There are two different issues:
1) Under the 'American Rescue Plan Act', which Congress passed in March, there is a provision that requires cash apps like Square, Venmo, PayPal, and Zelle to file information reports on COMMERCIAL TRANSACTIONS over $600. This law goes into effect Jan. 1. Previously, such cash apps were only required to report commercial transactions over $20,000 for accounts with at least 200 separate payments in a calendar year. The new $600 threshold aligns with other long-standing reporting requirements, like businesses who pay outside contractors more than $600 in a year are required to issue a 1099-NEC to the contractor.
2) A separate administration PROPOSAL involves traditional bank accounts. If implemented, it would require financial institutions to report the total amount of deposits and withdrawals from most BUSINESS bank accounts that exceed $600, although during a presser by the Speaker of the House, she mentioned that threshold may end up being higher.
As part of a statement by the Treasury Department, they stated the proposal would NOT track withdrawals, deposits or transactions in bank accounts, or transactions or payments made on cash apps by INDIVIDUALS.
There are two different issues:
1) Under the 'American Rescue Plan Act', which Congress passed in March, there is a provision that requires cash apps like Square, Venmo, PayPal, and Zelle to file information reports on COMMERCIAL TRANSACTIONS over $600. This law goes into effect Jan. 1. Previously, such cash apps were only required to report commercial transactions over $20,000 for accounts with at least 200 separate payments in a calendar year. The new $600 threshold aligns with other long-standing reporting requirements, like businesses who pay outside contractors more than $600 in a year are required to issue a 1099-NEC to the contractor.
2) A separate administration PROPOSAL involves traditional bank accounts. If implemented, it would require financial institutions to report the total amount of deposits and withdrawals from most BUSINESS bank accounts that exceed $600, although during a presser by the Speaker of the House, she mentioned that threshold may end up being higher.
As part of a statement by the Treasury Department, they stated the proposal would NOT track withdrawals, deposits or transactions in bank accounts, or transactions or payments made on cash apps by INDIVIDUALS.
#13
Original Member
Join Date: May 1998
Posts: 1,139
Here is the latest proposal, which would seem to include many MS transactions such as depositing money orders in excess of $10,000 a year, or opening bank accounts / Certificates of Deposit in large amounts.
https://www.marketwatch.com/story/bi...?siteid=yhoof2
https://www.marketwatch.com/story/bi...?siteid=yhoof2
#14
Join Date: Jan 2016
Posts: 369
U.S. Senate Finance Committee Chairman Ron Wyden said the new $10,000 IRS reporting threshold was chosen after consultations with the U.S. Treasury because it is a level frequently used in other bank reporting requirements.
The proposal does not identify individual transactions, but gross annual inflows or outflows to help the IRS identify where wealthy taxpayers who do not rely on regular "W2" wage income may be hiding opaque source of business or investment income.
"This is about wealthy business owners at the tippy top of the top. That's where the unpaid taxes are," he told reporters on a conference call.
The Treasury estimates that the cost of tax evasion among the top 1% of taxpayers exceeds $160 billion annually, part of a "tax gap" between taxes owed and those collected estimated at more than $7 trillion over a decade.
The proposal does not identify individual transactions, but gross annual inflows or outflows to help the IRS identify where wealthy taxpayers who do not rely on regular "W2" wage income may be hiding opaque source of business or investment income.
"This is about wealthy business owners at the tippy top of the top. That's where the unpaid taxes are," he told reporters on a conference call.
The Treasury estimates that the cost of tax evasion among the top 1% of taxpayers exceeds $160 billion annually, part of a "tax gap" between taxes owed and those collected estimated at more than $7 trillion over a decade.
#15
Join Date: Oct 2021
Posts: 3
Bank shutdowns
The bigger issue with this is not the IRS but the banks. Does a bank want to have to worry about reporting documents and potential money laundering if you are showing $20k in money order deposits a year and no long term balance for them to make money off each month.